54562-1:n:03/31/2003:RMK/mfp LRS2003-1583




HB692
By Representative Knight
RFD Montgomery County Legislation
Rd 1 06-MAY-03


A BILL
TO BE ENTITLED
AN ACT

To amend Sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, and 14 of Act 756 of the 1975 Special Session (Acts 1975, p. 1528), as amended, to provide further for the Employees' Retirement System of the City of Montgomery by changing the retirement age and creditable service requirements and formula for benefits for certain employees who become members of the system on or after October 1, 2003; to provide for an option for existing members on October 1, 2003, to either continue under the present system or begin participation under a new plan; to provide further for the administration of the system by increasing the membership of the Board of Trustees of the system; to redefine certain terms; and to provide further for certain creditable service and benefits under the system.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. Sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, and 14 of Act 756 of the 1975 Special Session (Acts 1975, p. 1528), as amended, are amended to read as follows:

"Section 1. Definitions. The following words and phrases as used in this act, unless a different meaning is plainly required by the context, shall have the following meanings:

"(1) "System" shall mean the Employees’ Retirement System of the City of Montgomery, as defined in Section 2 of this act.

"(2) "City" shall mean the City of Montgomery, Alabama, with respect to its employees, and any board or boards of the city now existing or hereafter created and duly authorized by the council to participate in the system with respect to its employees.

"(3) "Council" shall mean the duly elected Council Members of the City (hereinafter sometimes referred to as Councilors).

"(4) "Board" shall mean the board of trustees of the system provided for in Section 5(B) of this act to administer the system, but shall not include the investment trustee.

"(5) "Medical Board" shall mean the board of physicians provided for in Section 5(D) of this act.

"(6) "Employee" shall mean any regular and permanent officer or employee of the city, whether full time or part time, including elected or appointed officials, the Mayor and councilors, and the regular employees of any board or commission, and any person or persons employed by the city and performing the duties of a regular employee in the service of the city and whose compensation is computed on either a monthly or per diem basis, but shall not include anyone who is paid on a fee or commission basis.

"(7) "Member" shall mean any person included in the membership of the system as provided in Section 3 of this act.

"(8) "Service" shall mean service in the employment of and paid for by the city.

"(9) "Membership service" shall mean service as a member for which credit is allowable as provided in Section 4, subsection (1) of this act.

"(10) "Creditable service" shall mean total membership service plus any prior service verified by the board pursuant to Section 4, subsection (2).

"(11) "Retirement allowance" shall mean annual payments, payable in monthly installments, continuing to the last payment prior to death.

"(12) "Beneficiary" shall mean any person in receipt of a retirement allowance or other benefit as provided by the system.

"(13) "Accumulated contributions" shall mean the sum of the balance to a member’s credit in the annuity savings account as of December 31, 1968, plus all the amounts deducted thereafter from his compensation and credited to his individual account.

"(14) "Earnable compensation" shall mean the full rate of compensation that would be payable to a member if he worked the full normal working time. Earnable compensation shall not include overtime pay. In cases where compensation includes maintenance, the board shall fix the value of the part of compensation not paid in money. Compensation in excess of $200,000.00 shall be disregarded for all purposes under this act. Such amount shall be adjusted at the same time and in such manner as permitted under Section 415(d) of the Internal Revenue Code.

"(15) "Average final compensation" shall mean the earnable compensation of a member during the highest 12 consecutive months of the 5-year period immediately preceding his retirement date. If at any time prior to or during the 5-year period immediately preceding his retirement date, he served in a part-time capacity, average final compensation will be determined as pursuant to Section 6, subsection (f).

"(16) "Equivalent actuarial value" shall mean equal value when computed at regular interest on the basis of the tables last adopted by the board.

"(17) "Operative date" shall mean the date the system began operation as provided in Section 2 of this act.

"(18) "Investment Trustee" shall mean each of such banks or other recognized advisory service or services that the board of trustees selects. Each investment trustee shall have the powers and duties prescribed by Section 5(A). The board of trustees may terminate the services of any investment trustee upon thirty (30) days’ written notice to such trustee, and each trustee may likewise terminate its services upon thirty (30) days’ written notice to the board. After receipt of such notice by either party the investment trustee concerned shall make an accounting within forty-five (45) days of the receipt of said notice.

"(19) The masculine pronoun shall include the feminine pronoun.

"Section 2. Name and Operative Date.

"A retirement system is hereby established and placed under the management of the board of trustees and the investment trustee, respectively of the system for the purpose of providing retirement allowances and other benefits under the provisions of this act for employees of the City of Montgomery. The system shall be a continuation of the retirement system established under Ordinance No. 16-59, as amended prior to the effective date of this act, as the Employees’ Retirement System of the City of Montgomery, under which name all of its business shall continue to be transacted, all of its funds shall continue to be invested, all warrants for money shall continue to be drawn and all payments made, and all of its cash and securities and other property shall continue to be held as hereinafter provided. The operative date of the system shall continue to be the first day of June, 1959.

"Section 3. Membership.

"(1) Any person who is a member of the retirement system under Ordinance No. 36-61, as subsequently amended, at the time of the adoption of this act shall be a member of the system and in addition any person becoming an employee thereafter shall become a member of the system as a condition of his employment. Any employee who is elected as a member of the council and who is a member of the system at the time of such election may elect to terminate his membership in the system at the time of his election by filing with the board on a form prescribed by the board a notice of his election to terminate his membership in the system, and a duly executed waive of all prospective benefits which would otherwise inure to him as a member, such notice to be filed not later than the day on which he assumes his duties as a member of the city council. Any person who is elected as a member of the city council and who is not a member at the time of his election shall become a member unless he elects in the manner set forth above not to become a member, and, if he has formerly served as an elected commissioner for a time which is insufficient for him to have secured a vested benefit, he may pay into the system such amount as he would have been required to pay into the system had he become a member when first eligible to do so during such prior term, and upon such payment, if any, shall receive credit for such prior service as if it had been creditable service.

"(2) The board may, in its discretion and under such rules as it may prescribe, accept as members any class of persons the service of the city whose compensation is paid other than on a monthly basis, or who are serving on a temporary basis, and it may also, in its discretion, make optional with person in any such class their individual entrance into membership. Any such person shall be entitled to credit only for service rendered as a member, except that notwithstanding other provisions of this act to the contrary, under such rules as the board may adopt, continuous service preceding the date of membership of such a member during which he was not eligible to become a member may be credited, provided contributions for such service are made by the member and by the city.

"(3) Any employee whose membership in the system is contingent on his own election and who elects not to become a member may thereafter apply for and be admitted to membership, but no such employee shall receive credit for service prior to such date, except as provided under subsection (1) of this section.

"(4) It shall be the duty of the city’s Finance Department, and the corresponding department of the city’s Water Works and Sanitary Sewer Board, and Airport Authority, to submit to the board a statement showing the name, title, compensation, duties, date of birth and length of service of each member, and such information regarding other employees as the board may require, and on the basis thereof the board shall classify each member in one of the following groups:

"Group I. General municipal employees.

"Group I-A Airport Employees.

"Group II. Members of the Fire Department and the Police Department of the city, trained in firefighting or police work and actively engaged in such work or subject to call for such services.

"Group III. Employees of the City Water Works and of the Sanitary Sewer Board.

"Upon written request, the board shall certify to the member the group in which he is placed and the date of his admission to membership therein. When the duties of a member so require, the board may classify him in another group and shall certify to him the group to which he has been reclassified, except that no member having 15 or more years of service in one class may be so reclassified.

"(5) Should any member be absent from service more than five consecutive years, or should he withdraw his accumulated contributions or die or retire under the provision of this act, he shall thereupon cease to be a member. Provided, however, that when an employee has withdrawn his accumulated contributions and is again employed by the city within thirty days and again becomes a member of the system within said time, the board may in its discretion allow such employee to repay such accumulated contributions as he has previously withdrawn, and reinstate the prior service previously verified by the board.

"(6) Notwithstanding any other provision of this act, any employee who was eligible to become a member as of the operative date, June 1, 1959, who elected not to become a member as of the said date may thereafter become a member if he or she has remained continuously in the employment of the city in the interim, by making written application to the board and paying to the system an amount equal to the accumulated contributions which would have been creditable to his account as of the date on which he becomes a member, had he elected to become a member as of the operative date. Upon such application and payment in full such person shall become a member and shall be credited with all service with which he would have been credited had he become a member as of the operative date. Such amount when deposited in the system shall become a part of the member’s accumulated contributions.

"Section 4. Service Creditable.

"(1) Each member shall receive membership service credit for all service rendered while a member of the system since he became a member, or since he last became a member in the event of a break in his membership, on account of which contributions are made by the member.

"(2) Each member who last became an employee prior to the operative date shall file a detailed statement of all service rendered by him prior to such date for which he claims credit, and of such other facts as the board may require for the proper operation of the system. The board shall fix and determine by appropriate rules and regulations how much service in any year is equivalent to a year of service, but in no case shall more than one year of service be creditable for all service in one calendar year, nor shall the board allow credit as service for any period of more than one month’s duration during which the employee was absent without pay. The board shall verify, as soon as practicable after the filing of such statements of service, the service therein claimed. When membership ceases other than by retirement, prior service previously verified shall be forfeited, and should the employee again become a member he shall enter the system as an employee not entitled to prior service, subject to the provision of subsections (1) and (5) of Section 3 of this act.

"(3) Creditable service at retirement on which the retirement allowance of a member shall be based shall consist of his total membership service plus any prior service verified by the board pursuant to subsection (2) above.

"(4) Anything in this act to the contrary notwithstanding, credit for any period of absence due to compulsory service in the armed forces of the United States shall be allowed as service credit as if such service had been service as an employee of the city, provided the employee returns to city service within ninety days after becoming entitled to an honorable discharge from the armed forces or within ninety days after hospitalization continuing after discharge for a period of not more than one year; and, provided further that the employee contributes and pays to the retirement system the employee’s contribution applicable to such period of creditable service. Anything herein to the contrary notwithstanding, credit for military leave shall be granted in compliance with all applicable federal laws, rules and regulations.

"(5) Notwithstanding any other provisions of this act, an active and contributing member with prior employment with the State of Alabama as a state employee or as an employee of the public education system under the State Board of Education or an institution of higher education may purchase up to four years of credible service in the city retirement system for the prior employment if the member claiming the prior employment credit has at least 10 years of contributing membership service credit, exclusive of military service credit, in the city retirement system and the member makes the necessary lump sum payment to the Board of Trustees of the retirement system prior to his or her date of retirement from the active city service in an amount sufficient to cover the full cost of the employer and employee contributions. The member must pay the applicable employee and matching employer percentage rates of compensation he or she earns during the fiscal year in which payment is made or average final compensation, whichever is greater for each year or partial year of service purchased. A member is prohibited from purchasing credit under the aforementioned provisions for any prior service for which he or she has received credit toward a benefit from any other public retirement system except the federal Social Security program. The member has the responsibility of providing a statement from the Retirement Systems of Alabama that the member is not eligible for any state retirement benefits for the prior employment for which he or she is purchasing service credit and for wage statements covering the time period of the service credit being purchased.

"Section 4.1. Membership Reopening: (a) Any employee whose membership in the Employees’ Retirement System of the City of Montgomery was contingent upon his own election and who elected not to become a member, may apply for and be admitted to membership with all prior service credit as otherwise provided for in Act No. 349 of the 1971 Regular Session of the Legislature, as amended or superseded, at any time, provided said employee pays to the Board of Trustees of the Employees’ Retirement System of the City of Montgomery a sum equal to the total contributions which he would have made as a member during his service as an employee from the date of formation of said system, or the date of entry of his employing unit, to the date of his application for membership, plus compound interest of eight per centum on such contributions.

"(b) Any member or any retired member of the Employees’ Retirement System of the City of Montgomery, who at one time worked as a nonmember may receive credit for prior service and for the years worked as a nonmember, provided said member or retired member pays to the Board of Control of the Employees’ Retirement System of the City of Montgomery, a sum equal to the total contributions which he would have made as a member during the period of his employment from the date of formation of said system, or the date of entry of his employing unit, to the date he becomes a member, plus compound interest of eight per centum on such contribution.

"(c) Any member or retired member, who is precluded from restoring creditable service because his account was terminated due to five years absence or because he withdrew his funds and after again becoming a member of the Employees' Retirement System of the City of Montgomery failed to repay such withdrawn contributions plus interest within eight months after having completed five years of contributing membership service, may now receive credit for such terminated or withdrawn creditable service, provided he pays to the Board of Control of the Employees’ Retirement System of the City of Montgomery, a sum equal to the total contributions which he has withdrawn plus compound interest of eight per centum on such contributions from the date of withdrawal.

"Section 4.2. Prior Service Reopening: Any member who was a member of the Employees’ Retirement System and who prior to said date had been ineligible to receive credit for service rendered as an employee prior to the date of formation of said system for reasons other than having been employed as a nonmember, shall be eligible under the provisions of Act No. 349 of the 1971 Regular Session of the Legislature, as amended, to receive credit for all service as an employee rendered by him prior to the date of the establishment of the retirement system, provided such person pays a sum equal to the total contributions which he would have made as a member during the period of his employment from the date of formation of said system, or the date of entry of his employing unit, to the date be becomes a member, plus compound interest of eight per centum on such contribution.

"Section 4.3. Contributions Required: Any law or part of law relating to the payment of interest on contributions as a prerequisite to the granting of credit for withdrawn, terminated or nonmembership service under the Employees’ Retirement System notwithstanding, any eligible employee, member or retired member who claims such service shall pay into the retirement system in addition to the contributions required, interest of eight per centum, compounded annually, on such contributions, as a prerequisite to the granting of said service credit.

"Section 4.4. Employer Cost: Anything in this act to the contrary notwithstanding, the employer cost for the granting of any service credit granted under the provisions of this act shall become the continuing liability of the employer for whom such service was rendered.

"Section 5. Administration.

"A. Investment Trustee.

"Each investment trustee shall be a state or federally chartered bank with not less than $500,000,000 in assets, bonded for not less than the amount of the board’s assets held from time to time, and shall have the following powers and duties (but no other):

"(1) To retain inventoried assets delivered to it by the board so long as such retention appears advisable, including the right to retain investments previously made in its stock, if any, by the board.

"(2) To sell, exchange, assign, transfer and convey any security or property, real or personal (whether in the original inventory or acquired by purchase or otherwise), at public or private sale, at such time and price and upon such terms and conditions (including credit) as it may determine.

"(3) To invest and reinvest in such stocks, bonds, and other securities and properties as it may deem advisable, including preferred stocks, common stocks, debentures, and unsecured obligations, undivided interests, interests in investment trusts, mutual funds, legal and discretionary common trust funds, and leases and property either inside or outside of Alabama.

"(4) To register and carry any property in its own name or in the name of its nominee or to hold it unregistered but without thereby increasing or decreasing its liability as fiduciary.

"(5) To vote in person or by proxy any stock or securities held and to grant such proxies and powers of attorney to such person or persons as it may deem proper. The board shall have the power to vote in person or by proxy any stock in each investment trustee.

"(6) To consent to and participate in any plan for the liquidation, reorganization, consolidation or merger of any corporation, any stock or security of which is held.

"(7) To receive reasonable compensation for its services either out of the fund administered by each investment trustee or from the board, the amount or method of computation and payment to be agreed upon between the board and each investment trustee.

"(8) To receive funds or appropriations from the board or from the city to be held and administered hereunder, and to have custody of all investments delivered to it, subject to the directions of the board.

"(9) To pay to the board on duly-authorized vouchers such funds as may be required to make current monthly payments of retirement allowances and expenses.

"(10) To invest and manage all assets delivered to the trustee by the board and/or city in a professional and prudent manner and exercising due care.

"The powers and duties of each investment trustee shall apply from and after its selection by the board and delivery of assets to it, and no investment trustee shall have any duties in reference to or any liabilities for any acts or failures to act which occurred prior thereto.

"B. Board of Trustees.

"(1) Except for the powers and duties prescribed for the investment trustee, the general administration and the responsibility for the proper operation of the system and for making effective the provisions of this act are hereby vested in the board of trustees of the system.

"(2) The board shall consist of seven trustees, as follows:

"(a) The Mayor of the City of Montgomery shall be ex officio.

"(b) Four trustees, to be appointed by the city council from the membership, one who is an employee in the Police Department, one who is an employee in the Fire Department, one who is classified as a general municipal employee and one who is an employee of the City Water Works or the Sanitary Sewer Board. The first four trustees so appointed shall be appointed for terms of one, two, three and four years, respectively. The terms of office of succeeding trustees so appointed shall be four years.

"(c) Two trustees, to be appointed by the city council, both who may or may not be members. The first two trustees so appointed shall be appointed for terms of one and two years, respectively. The terms of office of succeeding trustees so appointed shall be two years.

"(d) Effective October 1, 2003, the board shall consist of twelve trustees, as follows: (i) the Mayor of the City of Montgomery, ex officio; (ii) nine trustees who shall be appointed by the Montgomery City Council, one of whom shall be a member employee in the Police Department, one of whom shall be a member employee in the Fire Department, one of whom shall be a member employee classified as a general municipal employee, four of whom may be either active or retired members of the retirement system, and two of whom may or may not be members of the system; (iii) one trustee, to be appointed by the governing board of the Airport Authority, who must be an employee of the Airport Authority; and (iv) one trustee, to be appointed by the City Water Works and Sanitary Sewer Board, who must be an employee of the City Water Works and Sanitary Sewer Board. The new trustees initially appointed by the Airport Authority and the City Water Works and Sanitary Sewer Board shall be appointed for an initial term of one year each, such initial terms to expire, however, no later than December 31, 2004. Thereafter, their respective successors appointed by said boards shall serve for terms of four years each. All previously appointed trustees serving on October 1, 2003, shall continue to serve until the expiration of their then respective current terms, and thereafter their successors shall be appointed for four-year terms, except that the immediate successors to those previously appointed trustees who are serving two-year terms, shall be appointed for and serve for terms of three years each; and, thereafter, the terms of office of all subsequent trustees so appointed shall be four years.

"(3) If a vacancy occurs in the office of a trustee, the vacancy shall be filled for the unexpired term in the same manner as the office was previously filled.

"(4) The trustees as such shall serve without compensation.

"(5) Each trustee shall, within ten days after his appointment, take an oath of office.

"(6) Each trustee shall be entitled to one vote in the board. Six concurring votes shall be necessary for a decision by the trustees at any meeting of the board, and six trustees shall constitute a quorum of the board.

"(7) Subject to the limitations of this act, the board shall, from time to time, establish rules and regulations for the administration of the system and for the transaction of its business, including uniform standards for determining who are employees within the meaning of this act.

"(8) The board shall elect from its membership a chairman and a vice chairman, and shall appoint a secretary who may or may not be a member of the board. The board may employ personnel for secretarial and other service as shall be required.

"(9) The board shall keep in convenient form such data as shall be necessary for actuarial valuation of the system and for checking the experience of the system.

"(10) The board shall keep a record of all of its proceedings, which shall be open to public inspection. It shall submit to the council, annually, a report showing the fiscal transactions of the system for the preceding year, the amount of the accumulated cash and securities of the system, and the last balance sheet indicating the financial condition of the system as shown by an actuarial valuation of the assets and liabilities of the system.

"C. Legal Adviser

"The City Attorney, or his designee, shall be the legal adviser of the board.

"D. Medical Board

"The board shall designate a Medical Board of one, two or three physicians who are not eligible to participate in the system. The Medical Board shall arrange for and pass upon all medical examinations required under the provisions of this act, shall investigate all essential statements and certificates by or on behalf of a member in connection with application for disability retirement, and shall report in writing to the board its conclusions and recommendations upon all the matters referred to it

"E. Duties of Actuary

"(1) The board shall designate an actuary who shall be the technical adviser of the board on matters regarding the operation of the system and who shall perform such other duties as are required in connection therewith.

"(2) The board shall certify from time to time the rates of contribution payable by the city and any other participating employers under the provisions of this act, and shall adopt for the system from time to time such mortality, service and other tables as shall be deemed necessary, and on the basis of such tables and the interest rate adopted by the board for the purpose of determining the city’s and other participating employers’ contributions to the system, the actuary shall make annually an actuarial valuation of the assets and liabilities of the system. At least once in each five-year period the board shall cause an actuarial investigation to be made into the mortality, service and compensation experience of the members and beneficiaries of the system.

"Section 6. Benefits

"(1) Service Retirement Allowance.

"(a) The minimum service retirement age shall be, for a member in Groups I, I-A, or III, the age at which he completes 20 years of creditable service or age 65, whichever occurs first. The minimum service retirement age shall be, for a member in Group II, the age at which he completes 20 years of creditable service or age 62. Any member in service who has attained his minimum service retirement age shall be retired by the board on a service retirement allowance upon his written application setting forth at what time not less than thirty nor more than 60 days next following the execution and filing thereof, he desires to be retired, notwithstanding that during such period of notification he may have separated from service. Such member shall be entitled to such retirement allowance whether he voluntarily separates from service or is dismissed for cause or for any other reason. In the event such member is dismissed for cause or for any other reason he shall be entitled to make application for and receive the retirement allowance hereinabove provided for upon his giving the written notice herein mentioned.

"(b) Any member in service in Groups I, I-A, or III who has attained age seventy-two shall be retired forthwith by the board on a service retirement allowance; provided that upon the request of his department head, approved by the council and the board a member who has attained age seventy-two may be permitted to continue in active service for a period of one year as the result of each such request. However, in no event shall any member be continued in active service after he has attained age seventy-five, except that the compulsory retirement age shall not be applicable to an official elected by vote of the people or to non-merit system employees. Notwithstanding an extension of a member’s service after he has attained age seventy-two, such a member shall be retired by the board on a service retirement allowance upon his written application setting forth at what time not less than thirty nor more than 60 days next following the execution and filing thereof he desires to be retired.

"(c) Any member in service in Group II who has attained age sixty-two shall be retired forthwith by the boards on a service retirement allowance; provided that upon the request of his department head, approved by the council and the board, a member who has attained age sixty-two may be permitted to continue in active service for a period of one year as the result of each such request. However, in no event shall any member be continued in active service after he has attained age sixty-five, except that the compulsory retirement age shall not be applicable to an official elected by vote of the people; provided, that if a Group II member was a member on the effective date of this act and on that date had attained age sixty-five, he may , on application to and with the approval of the board, remain in service for a period not in excess of one year from said effective date. Notwithstanding an extension of a member’s service after he has attained age sixty-two, such a member shall be retired by the board on a service retirement allowance upon his written application setting forth at what time not less than thirty nor more than 90 days next following the execution and filing thereof he desires to be retired.

"(d) The service retirement allowance of a member in Groups I, I-A, or III shall be 2% of his average final compensation multiplied by the number of years of his creditable service not in excess of 20 plus 1% of such compensation for each year of creditable service in excess of 20 years, subject to a maximum of 60% of average final compensation.

"(e) The service retirement allowance of a member in Group II shall be 2 and one half percent of his average final compensation multiplied by the number of years of his creditable service not in excess of 20 years plus 1% of such compensation for each year of creditable service in excess of 20 years, subject to a maximum of 60% of average final compensation.

"(f) The following procedure shall be used in calculating such service for employees who served in both regular part-time capacity and a regular full-time capacity whose average final compensation is based on full time.

"(1) Establish years worked.

"(a) Number of years worked part-time.

"(b) Number of years worked full-time.

"(2) Establish percentage for part-time.

"Number of hours worked per week divided by 40 hours times number of weeks worked per year divided by fifty-two.

"(3) Calculate Benefits.

"Number of part-time years times percentage earned per year as determined by group, times percentage of part-time as determined in item 2 of above times annual compensation. Add this to the retirement allowance calculated for the full-time service.

"EXAMPLE I - Employee with 20 years service (Group II)

"A. Establish years worked full-time and part-time, 13 years part-time at 15 hours a week for 39 weeks, 7 years full-time

"B. Establish percentage for part-time 15 hours divided by 40 hours = .375 x 39 weeks divided by 52 (or .75) = .28.

"C. Calculate Benefits

"13 x .025 = .33 x .28 = .09 x 9,209 = $828.81 7 x .025 = .18 x 9,209 = $1,657.62

"Total annual benefits . . . $ 2,486.43

" divided by 12

"Total monthly benefits. . . $ 207.20

"EXAMPLE II - Employee with 28 years service (Group I)

"A. Establish years worked full-time and part-time 18 years full-time.

"10 years part-time - 20 hours. per week, 39 weeks per year. -40 hours. per week, 13 weeks per year 28 years

"20 years at .02

"8 years at .01

"B. Establish percentage for part-time.

"20 divided by 40 = .50 x (39 divided by 52) or .75 = .38

"40 divided by 40 = 1.00 x (13 divided by 52) or .25 =.25

".63

"C. Calculate Benefits.

"18 years x .02 - .36 x 12,000 = $4,320.00

"2 years x .02 - .04 x .63 = .0252 x 12,000= 302.40

"8 years x .01 = .08 x .63 =.0504 x 12,000= 604.80

"Annual Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,227.20

" divided by 12

"Total Monthly Benefits . . . . . . . . . . . . . . . . . . . . . . $ 435.60

"EXAMPLE III-Employee with 36 years service (Group I)

"23 years 6 months worked 35 hours weekly for 52 weeks a year

"1 year 2 months worked 20 hours weekly for 52 weeks a year

"11 years 4 months worked full time 40 hours weekly

"A. Apply all full-time service to the higher unit benefit multipliers

"11 4/12 x (02) x 19,303.10 = $4,380.01 (a)

"B. Calculate separate part-time percentages for each period of part-time service and apply the higher percentage to the higher unit benefit multiplier.

"Part-time percentages

"35/40 x 52/52 = .875 20/40 x 52/52 = .500

"Application

"(8 8/12) x (.875) x (.02) x (19,303.10) = $2,928.28 (b)

"(14 10/12) x (875) x (.01) x (10,303.10) = $2,505.54 (c)

"1 2/12) x (.500) x (.01) x (19,303.10) = $111.96 (d)

"(a) + (b) + (c) + (d) divided by 12 months = $826.82

"(1.1) Service Retirement Allowance For Employees Becoming Members of the System On or After October 1, 2003.

"(a) The minimum service retirement age for a member in Group II, who becomes a member on or after October 1, 2003, or who under Section 6, subsection 1.1 (d) of this act elects to participate prospectively as one who became a member on or after October 1, 2003, shall be the age at which the member has completed a minimum of 25 years of creditable service, or, attains age 55. The minimum service retirement age of a member in Groups I, I-A, or III, who becomes a member on or after October 1, 2003, or who under Section 6, subsection 1.1(d) of this act elects to participate prospectively as one who became a member on or after October 1, 2003, shall be the age at which he completes 25 years of creditable service or attains age 62.

"(b) The service retirement allowance of a member in Group II, who becomes a member on or after October 1, 2003, or who under Section 6, subsection 1.1(d) of this act elects to participate prospectively as one who became a member on or after October 1, 2003, shall be 2 1/2% of his average final compensation multiplied by the number of years of creditable service, subject to a maximum of 100% of average final compensation.

"(c) The service retirement allowance of a member in Groups I, I-A, or III, who becomes a member on or after October 1, 2003, or who under Section 6, subsection 1.1(d) of this act elects to participate prospectively as one who became a member on or after October 1, 2003, shall be 2% of his average annual final compensation multiplied by the number of years of creditable service subject to a maximum of 100% of average final compensation.

"(d) Participants who are members of the system prior to October 1, 2003, shall be entitled to have their current service retirement allowance frozen and elect to participate prospectively in the new program offered to employees who become members on or after October 1, 2003, provided they have three or more years remaining until they attain the mandatory retirement age for employees who become members on or after October 1, 2003. Members desiring to make such election must file with the board a written election on forms, and pursuant to such rules and regulations, as the board shall promulgate. In order for such election to be effective, it must be filed with the board not later than September 30, 2003, or within thirty (30) days following their effective date of employment, whichever date is later. Members so electing shall earn benefits prospectively for creditable service completed after October 1, 2003, or the first day of the next month following the filing of their election, whichever date is later, on the same basis as employees who become members on or after that date; and, for creditable service completed prior to October 1, 2003, or prior to the first day of the next month following the filing of their election, as the case may be, such electing member shall be entitled at retirement to such benefits for such creditable service based on the retirement allowance formula provided for employees who became members prior to October 1, 2003, and did not elect to participate in the new system.

"(e) Any employee who became a member prior to October 1, 2003, and did not elect to participate prospectively in the retirement system as if he were a post-October 1, 2003 employee, upon the attainment of 25 years of creditable service may elect, during the three-month period immediately next following the attainment of 25 years of creditable service, to participate in the retirement system thereafter and prospectively on the same basis as a post-October 1, 2003 employee. Members desiring to so elect must file with the board a written election on forms, and pursuant to rules and regulations, adopted by the city retirement board, prior to the expiration of the three-month period next following the member’s attainment of 25 years of creditable service. Members who so elect shall be entitled at retirement to a retirement allowance for each year of creditable service in excess of 25 based on the benefit formula applicable to post-October 1, 2003 employees. The retirement allowance for each year of the initial 25 years of creditable service shall be based on the benefit formula applicable to pre-October 1, 2003 employees. Otherwise, an electing member shall thereafter participate in the retirement system on the same basis as if the member were a post-October 1, 2003 employee.

"(1.2) Spousal Benefit

"(a) If any active member, who last became a member prior to October 1, 2003, and who has not made an election under Section 6, subsection 1.1(d) of this act to participate in the retirement system prospectively on the basis of an employee who becomes a member on or after October 1, 2003, and has been credited with 20 or more years of creditable service should die, his surviving spouse, as hereinafter defined, shall be entitled to a death benefit, provided the spouse is the designated beneficiary.

"(b) If any active member, who last became a member on or after October 1, 2003, or, who has made an election under Section 6, subsection 1.1(d) of this act to participate in the retirement system prospectively on the basis of an employee who becomes a member on or after October 1, 2003, and has been credited with 25 or more years of creditable service should die, his surviving spouse, as hereinafter defined, shall be entitled to a death benefit, provided the spouse is the designated beneficiary.

"(c) Surviving Spouse as used in this subsection shall mean the legally married spouse of the member on the date of his death.

"(d) No death benefit shall be payable if the deceased member is not survived by a spouse.

"(e) Such death benefit shall be a monthly income, payable for the life of the surviving spouse equal to the allowance that would have been payable to the member and his surviving spouse if he had retired on the day immediately preceding his death and selected the 50% survivorship option and designated his surviving spouse as beneficiary.

"(f) Notwithstanding the above, and in lieu of the above, the surviving spouse may elect to receive a lump sum payment equal to the member’s contributions at the date of his death.

"(2) Disability Retirement Allowance

"(a) Any member in service who has had 5 years or more of creditable service may be retired for disability upon application of such member to the board and upon recommendation of the head of the division in which the member is employed, provided he meets the following requirements:

"(i) The Medical Board after medical examination of such member shall certify that he is mentally or physically incapacitated for the further performance of duty; that such incapacity is likely to be permanent; and that the member should be retired for physical or mental disability.

"(ii) The disability did not result from service in the armed forces of the United States, chronic alcoholism, addiction to narcotics, intentionally self-inflicted injuries, or injuries received while committing a felony.

"(iii) Except for temporary and/or partial disability workers’ compensation benefits, medical payments and educational or training benefits, he is not receiving and has not received any payments for such disability from the city under workers' compensation or any other type of employer-provided payment for disability payable from the participating employer’s general or self-insured funds; provided, however, that in the event such employee is entitled to any other such benefits from the city or any of its boards he may elect by filing with the board up to the time of the commencement of such benefits, his choice of the two benefits. In the event he chooses not to accept benefits under the system he shall withdraw his accumulated contributions in a lump sum.

"(b) The disability retirement allowance shall be computed as a service retirement allowance on the basis of his average final compensation and creditable service at disability retirement.

"(c) Should such a member become disabled under circumstances which fail to meet the requirements set forth in (i), (ii), and (iii) of subsection (2) (a) above, he may elect in lieu of a return of his accumulated contributions as provided under subsection (4) (a) of this section, to receive a deferred retirement allowance commencing at such time as he would be eligible to receive a service retirement allowance.

"(2.1) Disability Retirement Allowances - Supplemental Provisions

"No member shall be entitled to a deferred disability retirement allowance with less than five years of creditable service; and no member shall be entitled to a disability retirement allowance unless he meets the requirements of (i), (ii), and (iii) of subsection 2, regardless of whether such member is eligible for benefits for total (100%) disability under the federal system guidelines.

"(3) Vesting Retirement Allowance

"(a) Should any member be or have been involuntarily separated from service for any cause other than fault or delinquency on his part after having completed five or more years of creditable service, he may elect in lieu of a return of his accumulated contributions as provided under subsection (4) (a) of this section, to receive a deferred retirement allowance commencing twenty years from the beginning of creditable service with the city or age 50, whichever occurs first. Failure of reelection of a member elected by vote of the people shall not be construed as fault or delinquency on the part of such member.

"(a)(1) Anything herein to the contrary notwithstanding, any member separating from service after August 11, 1993, after having completed ten or more years of creditable service, may elect in lieu of a return of his accumulated contributions as provided under subsection 4(a) of Section 6, to receive a deferred retirement allowance commencing at the age of 65 for a member in Groups I, I-A, and III, or the age of 62 for a member in Group II; or if a member in Group II became a member on or after October 1, 2003, or elected under subsection 1.1(d) of Section 6 of this act, to participate in the retirement system prospectively on the basis of an employee who became a member on or after October 1, 2003, he may elect in lieu of a return of his accumulated contributions as provided under subsection 4(a) of Section 6, to receive a deferred retirement allowance commencing at the age of 55. Any member who separates from service without completing ten years of creditable service or qualifying for a disability retirement allowance shall not receive any vesting retirement allowance and shall only be entitled to receive the amount of his accumulated contributions under the provisions of subsection (4)(b) of Section 6.

"(b) The vesting retirement allowance shall be computed as a service retirement allowance on the basis of the members’ average final compensation and creditable service at the time of separation from service.

"(c) Notwithstanding the foregoing the member may at any time prior to the commencement of his vesting retirement allowance revoke such election and receive in lieu of all benefits the amount of his accumulated contributions. In the event of the death prior to the commencement of the vesting retirement allowance of a member who has made the election provided for herein, the amount of his accumulated contributions shall be paid under the provisions of subsection (4)(b) of this section in lieu of any other benefit provided for in this section.

"(4) Return of Contributions

"(a) Should a member cease to be an employee for any reason other than death or retirement under the provisions of this act, he shall be paid on demand his accumulated contributions.

"(b) Upon the receipt of proof, satisfactory to the board, of the death of a member, his accumulated contributions shall be paid to such person, if any, as he shall have nominated by written designation duly acknowledged and filed with the board if such person survives him, otherwise to the estate of the member.

"(5) Re-Examination of Beneficiaries Retired on Account of Disability.

"(a) The board may at any time and as often as it sees fit, not in excess of once in each 12 months, require any disability beneficiary to undergo a medical examination if he has not yet attained his minimum service retirement age, such examination to be made at the place of residence of such beneficiary, the office of a physician selected by the board, or other place mutually agreed upon. Should any disability beneficiary refuse to submit to such medical examination his retirement allowance may be discontinued by the board until his withdrawal of such refusal, and should his refusal continue for over one year, all his rights in and to that portion of his retirement allowance which is provided by the contributions of the city may be revoked by the board.

"(b) In the event a member retired on a disability retirement allowance secures gainful employment, including employment with the city, paying more than the difference between his retirement allowance and his average final compensation the amount of his retirement allowance shall be reduced to an amount which, together with the amount earnable by him, shall equal the amount of his average final compensation but, in no event, to an amount less than the portion of his allowance provided by his accumulated contributions. Should his earning capacity be later changed, the amount of his retirement allowance may be further modified in like manner. Any member retired on a disability allowance shall advise the board of any gainful employment. The board may make such investigation at any time in reference to any gainful employment of any retired beneficiary, up to the time he attains his minimum service retirement age, and such beneficiary shall answer any question and furnish information, including copies of federal income tax returns, as the board may require. In the event that the member fails or refuses to comply with the board’s request, then his retirement allowance may be discontinued by the board until his withdrawal of such refusal, and should his refusal continue for over one year, all his rights in and to that portion of his retirement allowance which is provided by the contributions of the city may be revoked by the board.

"(6) Restoration of Beneficiaries to Membership

"Should a disability beneficiary be restored to or be in service at a compensation equal to or greater than his average final compensation at retirement, or should any other beneficiary be restored to service, his retirement allowance shall cease, any election of an optional benefit shall become void, he shall again become a member of the system and shall contribute thereafter at the then prevailing rate. An amount equal to the actuarial reserve held for the part of his retirement allowance provided by his contributions shall be credited to him as accumulated contributions. Any creditable service to which he was entitled when he retired shall be restored to him, and upon subsequent retirement his retirement allowance shall be based on his compensation and creditable service before and after the period of prior retirement; provided that if he does not complete three years of creditable service after his restoration to service, the part of his retirement allowance upon subsequent retirement payable with respect to creditable service rendered before the period of his previous retirement shall be equal to his previous retirement allowance with all of the provisions of any option restored, if one was elected, with respect to such part of his retirement allowance.

"(7) Optional Allowances

"Until the date of his retirement and, in the case of a member eligible for a vesting retirement allowance, the date as of which such allowance is to commence, any member may elect to convert the retirement allowance otherwise payable to him into a modified retirement allowance of equivalent actuarial value in accordance with one of the optional forms named below. Such election shall become effective on the member’s retirement date or the date as of which his vesting retirement allowance is to commence, as the case may be.

"Option 1. A reduced retirement allowance payable during the life of the retired member, with the provision that if he dies before he has received in payments of his allowance the amount of his accumulated contributions at the time of his retirement, the balance of such amount shall be paid to such person, if any, as he shall have nominated by written designation duly acknowledged and filed with the board if such person survives him, otherwise to the retired member’s estate; or

"Option 2. A reduced retirement allowance payable during the life of the retired member, with the provision that upon his death his reduced retirement allowance shall be continued throughout the life of and paid to such person as he shall have nominated by written designation duly acknowledged and filed with the board at the time of retirement; or

"Option 3. A reduced retirement allowance payable during the life of the retired member, with the provision that upon his death one-half of his reduced retirement allowance shall be continued throughout the life of and paid to such person as he shall have nominated by written designation duly acknowledged and filed with the board at the time of retirement; or

"Option 4. A reduced retirement allowance payable during the life of the retired member, with the provision that upon his death some other benefit shall be payable, provided that the total value of the allowance during his life and the succeeding benefit shall be computed to be of equivalent actuarial value to the retirement allowance which he would receive without optional modification and provided that the benefit shall be approved by the board.

"(7.1) Anything herein to the contrary notwithstanding, after August 11, 1993, a member may elect to convert the retirement allowance otherwise payable to him into a modified retirement allowance of equivalent actuarial value in accordance with one of the optional forms named in subsection 7 of Section 6 of this act.

"Whenever any member has elected an optional allowance and has nominated his spouse to receive all amounts and benefits payable on or after such member’s death as a result of such election, the member may revoke the election any time after the death of such spouse or the entry of a final judgement and complete divorce from the spouse so nominated. Upon any such revocation the member shall return to the single lifetime only retirement allowance otherwise payable to him. Such revocation shall be effective on the first day of the month following the month in which the revocation is filed with the board and once filed shall be final and irrevocable.

"(8) Preservation of Benefits Accrued Under the System Prior Hereto

"Anything herein contained to the contrary notwithstanding, the retirement allowance payable under the system to a member immediately prior to the effective date of this act, who continued without a break in membership to his retirement date or termination of employment entitling him to a benefit hereunder, shall not be less than the benefit which would otherwise be payable to him under the system as in effect prior to the effective date of this act, based on his creditable service to and his compensation earned prior to paid date.

"(9) The payment of benefits shall begin not later than the 60th day after the close of the calender year in which the latest of the following events occur: (a) the date on which the former employee attains the earlier age of 65 or his minimum service retirement age specified in the Act/Plan; (b) the 10th anniversary of the year in which the employee or former employee became a member of the Plan, or (c) the date the member employee’s employment with the city is terminated.

"(10) The maximum amount payable to a member under the Plan/Act in any calender year when expressed as a straight life annuity commencing at normal retirement age shall equal the lesser of (1) ninety thousand dollars ($90,000), or (2) 100 percent of the member’s 415 Compensation averaged over the three consecutive calender years ,or actual number of calender years for employees who have been employed for less than three consecutive calender years, during which the employee had the greater aggregate 415 Compensation from the employer. The dollar limitations shall be adjusted annually as provided in Section 415(d) of the Internal Revenue Code pursuant to the regulations, effective as of January 1 of each calender year. The limitations, adjustments, definitions, special rules, and other requirements prescribed by this act shall at all times comply with the provisions of Section 415 of the Internal Revenue Code and the regulations thereunder as applicable to government plans, the terms of which are specifically incorporated herein by reference.

"Section 7. Method of Financing.

"All of the assets of the system shall be credited, according to the purpose for which they are held, among three accounts, namely, the Members’ Account, the Accumulation Account and the Expenses Account.

"(1) Members’ Account.

"(a) The Members’ Account shall be the account in which shall be held the accumulated contributions of members.

"(b) The board shall cause to be deducted from the compensation of each member on each and every payroll for each and every payroll period 6% of his earnable compensation. In determining the amount earnable by a member in a payroll period, the board may consider the rate of compensation payable to such member on the first day of a payroll period as continuing throughout the payroll period, and it may omit deduction from compensation of any period less than a full payroll period if an employee was not a member on the first day of the payroll period, and to facilitate the making of deductions it may modify the deduction required of any member by such an amount as shall not exceed one-tenth of one per centum of the annual compensation upon the basis of which such deduction is made.

"(c) The deductions provided for herein shall be made notwithstanding that the minimum compensation provided by law for any member shall be reduced thereby. Every member shall be deemed to consent and agree to the deductions made and provided for herein and shall receipt for his full salary or compensation, and payment of salary or compensation less said deduction shall be a full and complete discharge and acquittance of all claims and demands whatsoever for the services rendered by such person during the period covered by such payment, except as to the benefits provided under this act.

"(d) The proper authority or officer responsible for making up the payroll shall certify to the board the amounts deducted on each and every payroll, and each of such amounts shall be paid into the Members’ Account and credited to the individual account of the member from whose compensation the deduction was made.

"(e) The accumulated contributions of a member paid upon his death or withdrawn by him, as provided in this act, shall be paid from the Members’ Account. Upon the retirement of a member, his accumulated contributions shall be transferred from the Members’ Account to the Accumulation Account.

"(2) Accumulation Account.

"(a) The Accumulation Account shall be the account in which shall be accumulated all contributions made by the city to provide benefits under the system and from which shall be paid all retirement allowances and other benefits under the system, other than those payable from the Members’ Account.

"Regular Contributions by the City

"(b) On account of each member there shall be paid annually into the Accumulation Account a certain percentage of the compensation of each member to be known as the normal contribution, and an additional percentage of his compensation to be known as the accrued liability contribution. The rates per centum of such contribution shall be fixed on the basis of the liabilities of the system as shown by actuarial valuation.

"(c) The normal rates of contribution shall be determined after each actuarial valuation. During the period over which the accrued liability contributions are payable, the normal rates of contribution shall be determined, on the basis of regular interest and the tables last adopted by the board, as the uniform and constant percentages of the compensation of the average new entrant Group I, Group I-A, and Group III or Group II member, as the case may be, which, if contributed on the basis of the prospective compensation of such new entrant throughout his entire period of active service, would be sufficient to provide for the payment of the portion of any retirement allowance or other benefit payable on his account not provided by his own contributions. After the accrued liability contributions have ceased to be payable, the normal contribution rate shall be the rate per centum of the compensation of all members obtained by deducting from the total liabilities of the Accumulation Account the amount of the funds in hand standing to the credit of the Accumulation Account, and dividing the remainder by one per centum of the present value of the future compensations of all members, as computed at regular interest on the basis of the tables last adopted by the board.

"(d) Immediately succeeding the valuation as of December 31, 1968, the accrued liability contribution rates shall be computed as the rate per centum of the total annual compensation of all Group I, Group I-A, and Group III members, or Group II members, as the case may be, which is equivalent to 4 3/4% of the amount of the total liabilities of the Accumulation Account on account of such members and their beneficiaries in excess of the funds in hand held on their account in the Accumulation Account, which is not dischargeable by the aforesaid normal contributions made on account of such members during the remainder of their active service.

"(e) The total amount payable by the city in each year to the Accumulation Account shall be not less than the sum of the rates per centum known as the normal contribution rate and the accrued liability contribution rate, of the total compensation of all members in Groups I, I-A, and III and in Group II, respectively, during the preceding year; provided, however, that the amount of each annual accrued liability contribution shall be at least 3% greater than the preceding annual accrued liability contributions, and that the aggregate payment shall be sufficient, when combined with the amount in the account, to provide the retirement allowances and other benefits payable to members and beneficiaries during the year then current.

"(f) The accrued liability contributions shall be discontinued as soon as the amount of the funds standing to the credit of the Accumulation Account shall equal the present value, as actuarially computed and approved by the board, of the total liabilities of the account on account of all members and beneficiaries less the present value of the normal contributions to be received at the normal rates then in force on account of persons who are at that time members.

"Interest

"(g) All interest and dividends earned on the funds of the system shall be credited to the Accumulation Account.

"(h) Regular interest shall mean interest at the per centum rate or rates compounded annually as shall be determined by the board from time to time.

"Benefits payable from Accumulation Account

"(i) All retirement allowances to beneficiaries, and benefits in lieu thereof, shall be paid from the Accumulation Account.

"(3) Expense Account

"The Expense Account shall be the account from which shall be paid all the expenses necessary in connection with the administration and operation of the system. Persons assigned to and working for the Retirement System shall be employees of the City of Montgomery, and their salaries and other accrued benefits for such employees shall be paid proportionately by the City of Montgomery, the City of Montgomery Airport Authority, and the Montgomery Water Works & Sanitary Sewer Board, based upon each organization’s relative percentage of covered member payroll. All other expenses and costs incurred in connection with the administration and operation of the retirement system, including, but not limited to, the fees and costs paid to the retirement system’s investment trustees and advisors, shall be the sole responsibility of, and shall be paid by, the retirement system itself from its investment income.

"(4) Appropriations

"On or before the first day of June of each year the board shall file with the council its certification of the amount of the appropriation necessary to pay the normal and accrued liability contributions to the retirement fund for the ensuing year, and the amount of appropriation required to cover the expenses necessary in connection with the administration and operation of the system, and such amounts shall be included in the budget, in accordance with legal budget procedure.

"(5) Member Contributions

"(a) Contributions which the board causes pursuant to Section 7(1) to be deducted from the compensations of each member employee and contributed to the member’s account under the Plan/Act shall be treated for purposes of Section 414(h)(2) of the Internal Revenue Code as being paid by the city in lieu of contributions by any such member employee.

"(b) The member employee contributions which are picked up will continue to be designated employee compensation for determining the amount of the contribution to be so picked up; the total amount of the contribution of each member employee to the Employees' Retirement System of the City of Montgomery shall not be reduced by this section; the amount of the retirement allowance of each member shall not be affected by this section, no other changes in the method of computation and transmittal of these picked up employee contributions shall be affected by this section; and the total amount paid to and on behalf of each member employee will not be increased or decreased by this section.

"(c) The procedure whereby the member employees contribution to the Employees’ Retirement System of the City of Montgomery is picked up shall apply equally to each and every such employee who participates in the Employees’ Retirement System of the City of Montgomery; no employee shall be given any option concerning this pick up; and this procedure of pick up shall be mandatory on all member employees.

"(d) Forfeitures, if any, arising from severance of employment, death, or for any other reason, may not be used to increase benefits for employee members or their beneficiaries who would otherwise receive under the Employees’ Retirement System of the City of Montgomery at any time prior to termination of the Employees’ Retirement System of the City of Montgomery or the complete discontinuance of city contributions. Forfeitures, if any, are to be used as soon as possible to reduce subsequent city contributions.

"Section 8. Management of Funds.

"(1) Investments shall be managed by the investment trustee. The board shall otherwise manage the system.

"(2) The board shall designate one of its members, with an appropriate bond, or a bank or trust company, to be the custodian of the funds of the system other than those in the possession of the investment trustee. All payments from such funds of the system shall be made only upon regular vouchers signed by two persons designated by the board, each of whom shall be bonded. A duly attested copy of a resolution of the board designating such persons and bearing upon its face specimen signatures of such persons shall be filed with the custodian as his authority for making payments upon such vouchers. No voucher shall be drawn unless it shall have been previously authorized by resolution of the board. All persons authorized to sign such vouchers shall be bonded in an amount or amounts established by the board from time to time and commensurate with the applicable fiscal responsibilities and risks.

"(3) For the purpose of meeting disbursements for retirement allowances and other payments there shall be kept on deposit available cash in an amount to be determined from time to time by the board. The board shall notify the investment trustee in writing of the amount determined by the board to be desirable. No voucher shall be drawn unless it shall have been previously authorized by resolution of the board.

"(4) Except as otherwise herein provided, no member nor employee of the board, the City of Montgomery Airport Authority, the Montgomery Water Works & Sanitary Sewer Board, or of the City of Montgomery, shall have any direct or indirect interest in the gains or profits of any investment made by the board or the investment trustee, nor as a member of the board receive any pay or emolument for his services. No member nor employee of the board shall, directly or indirectly, for himself or as an agent in any manner use the same, except to make such current and necessary payments as are authorized by the board.

"(5) The board shall cause the accounts and operations of the retirement system to be audited by an independent outside auditor annually, and, an audit of its management practices and procedures every three years, or more often if necessary to maintain security and efficiency.

"Section 9. Member To Elect Between Service Retirement and Other City Payments

"Anything in this act to the contrary notwithstanding, any person who is entitled to receive benefits directly from the city or from the funds of the city or from any board or commission connected with the city, for any disability, shall elect on forms, and in accordance with rules and regulations, adopted by the board between those benefits and the service retirement benefits under this system. In the event such person does not elect to receive a service retirement benefit, then he shall receive no service retirement benefits but shall be entitled to a return of his accumulated contributions.

"Section 10. Return of Contributions

"Wherever in this act provision is made for return of contributions of a member, such return shall be made without payment of interest for the period subsequent to December 31, 1968.

"Section 11. Assignments Prohibited

"The property and funds of the system, the contributions of members deducted from their compensation, the right of a person to a retirement allowance or other benefit, and any other right accrued or accruing to any person under the provisions of this act and the moneys in the accounts created by this act shall not be subject to taxation by the city nor by the State of Alabama, nor be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency law or any other process of law whatsoever to satisfy any debt or liability of any member, and shall be unassignable except as in this act specifically provided.

"Section 12. Protection Against Fraud

"Whoever with intent to deceive shall make any statements or reports required under this act which are untrue, or shall falsify or permit to be falsified any record or records of this system shall be fined not to exceed one thousand dollars, or imprisoned not to exceed six months, or both.

"Section 13. Errors

"Should any change or error in the records result in any member or beneficiary receiving from the system more or less than he would have been entitled to receive had the records been correct, the board shall have the power to correct such error, and as far as practicable, to adjust the payments in such manner that benefits of equivalent actuarial value to the benefit to which such member or beneficiary was correctly entitled shall be paid.

"Section 14. General Conditions

"(1) The board shall have the continuing right and power to amend or supplement this act at any time, which right and power is hereby expressly reserved, but no amendment shall be adopted which will reduce the then accrued benefits of employees or beneficiaries below the extent they are then covered by accumulated reserves, which reserves shall constitute a trust fund for the payment of such benefits, except that any amendment or supplement which would result in additional contributions by the City shall be approved by the Board, the City Council, and the governing body of such participating employer.

"(2) All provisions of any act inconsistent with the provisions of this act are hereby repealed to the extent of such inconsistency.

"(3) If any section or part of any section of this act is declared to be unconstitutional, the remainder of the act shall not thereby be invalidated.

"(4) No amendment or supplement to the Plan shall be effective if it authorizes or permits any part of the Trust Fund, other than such part as is required to pay administrative expenses and taxes if any, to be used for or diverted to any purpose other than for the exclusive benefit of member employees or their beneficiaries or estates, or causes any reduction in the then accrued benefits of member employees of their beneficiaries below the extent they are then covered by accumulated reserves."

Section 2. This act shall become effective October 1, 2003, following its passage and approval by the Governor, or its otherwise becoming law.


Montgomery
Montgomery County
Municipalities
Municipal Officers and Employees
Retirement Systems
Acts Amended