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Ordinance 603 ORDINANCE NO. 603 AN ORDINANCE CREATING A RETIREMENT PROGRAM FOR THE EMPLOYEES OF THE CITY OF GILROY. WHEREAS, the Common Council of the City of Gilroy after adequate consideration and study deems it to be to the best interests of the City of Gilroy and of the employees thereof, that a retirement plan or system for the employees ot said City be adopted under which contri- butions shall be made by the employees and the City of Gilroy which con- tributions shall be utilized to procure from such insurance company, as may be selected by said City, annuities for and to be paid to the employees who may become eligible thereto under the system upon and during their retirement as hereinafter set forth. NOW, THEREFORE, the Common Council of the City of Gilroy does ordain as follows: SECTION 1: CREATION OF THE PLAN A Retirement Plan for the employees of the City of Gilroy is hereby created and established, said Plan contemplates withholding a certain percentage from the employees' compensation and contributions by the City of Gilroy to provide the funds necessary to operate the Plan and establishment of certain past and future service credits from which the employee shall receive upon retirement an annuity, which said fund is to be deposited with an insurance company under an agreement to hold the same and to pay to the employees, retirement payments in accordance with this Plan. SECTION 2: ELIGIBILITY As used in this ordinance the word "employee" shall also include the City Clerk, City Marshal and City Treasurer. Each employee is eligible to enter the plan on January 1 next following completion of the following requirements: a salaried must have completed 6 months continuous service as NY em- ployee of the City of Gilroy must not have attained age 55. This does not apply to those who were employees of the City of Gilroy on original effective date of the Plan. Employees who do not elect to join the Plan when first eligible (a) (b) may do so on the first day of any calendar year thereafter, but must - 1 - 603 T I forfeit all past service credit. SECTION 3.1: NORMAL RETIREMENT DATE The employees Normal Retirement Date is the first day of the calen- dar month comncident with or next following the date when age sixty- five was attained. For an employee who has reached age 60 or over on the affective date of the Plan, his Normal Retirement Date shall be the first day of the month next following the date he completes 5 years in the Plan. SECTION 3.2: EARLY RETIREMENT An employee, upon written request, and with consent of the Common Council, may retire on the first day of any calendar month within the ten year period prior to his Normal Retirement Date on an actuarially reduced income for his vested interest, provided adequate funds have been deposited with the Insurance Company to procure these benefits. SECTION 3.3: LATER RETIREMENT An employee, upon written request, and with consent of the Common Council, may be allowed to post pone his retirement under mutually agreed conditions. The employee's retirement income will be the same amount as if he had retired at the Normal Retirement Date but no fur- ther contributions will be made by the employeeo SECTION 4.1: RETIREMENT BENEFIT The amount of retirement income available to each employee on the Normal Retirement Date, for as long as he shall live after retire- ment shallbe the sum of the Future Service Credits and Past Service Credits as herein defined: (a) Future Service Credits - During each subsequent year after the effective date of this Plan, each employee shall be cre- dited with a monthly amount of future service annuity equal to one (1%) percent of the employee's monthly salary. Past Service Credits - For service to the City of Gilroy prior to the effective date of this Plan and provided the em- ployee received continuous wages, each employee shall be cre- dited with a monthly amount of past service annuity equal to 3/4 of l% of the employee's monthly compensation as of the effective date of this plan multiplied by the number of years of continuous service prior to the effective date of the Plan as determined by the Common Council. (b) SECTION 4.2: NORMAL FORM OF ANNUITY Upon retirement a certificate shall be issued by the Insurance Company stating the monthly annuity payments that will be paid during - 2 - the lifetime of the employee~ The monthly payments shall commence on retirement date and shall cease with the last monthly payment immedi- ately prior 'to the employees de~th. Upon death of the employee sub- sequent to the retirement date, there will be paid to -the employee's beneficiary a death benefit in an amount equal to the excess, if any, of the employee's contributions together with interest over the total of the annuity payments purchased with the employee's contributions and interest which have been paid to th~ employee. SECTION 4.3: OPTIONAL FORMS OF ANNUITY The employee may elect one of the following options instead of the normal form of annuity, provided written request is made to the Insurance Company prior to the retirement date. The Insurance Company shall issue a certificate stating the amount of retirement the em- ployee shall receive. (a) Contingent Annuitant Option - This option provides that the employee shall receive a reduced monthly pension commencing at the retirement date and continuing throughout the employ- ee's lifetime, with the condition that should the employee die, payments will be continued to a contingent annuitant who will have been designated by the employee prior to the retirement date. The amount of this reduced pension will be determined on the basis of the ages of both the employee and the employee's designated contingent annuitant at the time of retirement. Life Annuity With Payments For Ten Years Certain - If this option is elected the employee will receive a reduced monthly pension commencing at the retirement date with the provision that in the event of the employee's death, prior to having received 120 monthly payments, the beneficiary will continue to receive the same amount of pension benefit every month for the balance of the 120 months dating from the time of the em- ployee's death. This option must be elected at least 3 years prior to the employee's normal retirement date. (b) SECTION 5.1: TERMINATION OF EMPLOYMENT If an employee should terminate employment, and at that time have completed less than ten (10) years of continuous service with the City of Gilroy, no benefit will be available; however in that event, the employee's total deposit plus compound interest at the rate of 2 3/4% per annum compounded annually will be returned to the employee. SECTION 5.2: VESTING PRIVILEGE When an employee terminates employment and has completed ten (10) years or more of continuous service, eight (g) of which were as a participant under the Plan, the employee may elect to purchase a paid- up deferred life annuity under which the employee shall receive monthly annuity payments for life commencing on the Normal Retirement Date. - 3 - The monthly amount of such deferred paid-up life annuity shall be equal to the monthly amount of annuity credited to the employee as of the date of termination of employment, multiplied by the applicable per- centage from the following Vesting Schedule: VESTING SCHEDULE Number of Years of Vested Completed Continuous Service Percentage Less than 10 years b% 10 yea rs but less than 11 years 25 II years but less than 12 years 30 l2 years but less than 13 years 35 l3 years but less than 14 years 40 14 years but less than 15 years 45 15 yea rs but less than 16 years 50 16 years but less than 17 years 55 17 years but less than 19 years 60 19 years but less than 19 years 65 19 years but less than 20 years 70 20 years but not less than 21 years 75 2l years but not less than 22 years gO 22 years but not less than 23 years g5 23 years but not less than 24 years 90 24 years but not less than 25 years 95 25 years or more 100 SECTION 6: DEATH BENEFIT Should an employee die prior to retirement date, the beneficiary will receive the total amount of the employee's deposit plus compound interest at the rate of 2 3/4% per annum compounded annually plus inte- rest from the end of the year in which they were last made until the first of the month in which the employee dies. Should an employee die after retirement but prior to having re- ceived in annuity payment purchased by the employee's deposits the total amount of the employee'S deposits plus interest at the rate of 2 3/4% per annum compounded annually plus interest from the end of the year in which they were last made until the retirement date, then J the employee's beneficiary will receive the balance as a lump sum death benefit. SECTION 7: ASSIGNABLE BENEFITS The retirement benefits may not be assigned, and are not subject to execution garnishmen~, attachment or other legal process of creditors. SECTION g: CONTRIBUTIONS Each employee who elects to participate in the Plan shall con- tribute to the Fund for deposit with the insurance company 3% of this I I compensation, such contribution to be withheld from his compensation payments. The City of Gilroy will contribute for deposit with the insurance company the remainder of the funds necessary to maintain the Retirement Program under the contract to be entered into with the insurance com- pany. SECTION 9: AUTHORIZATION l The City Council is hereby authorized to enter into contractual engagements with such insurance companies or corporations which in their opinion will provide the Retirement Plan andmake the retirement payments and other benefits as established in this ordinance. PASSED and ADOPTED this 1st day of June , 1959, by the following vote: AYES: NOES: ABSENT: COUNCILMEN Pate, Rush, Petersen, Hentworth, Jordan COUNCILMEN None COUNCILMEN GaUo APPROVED: .4,~ ATTEST: ~r~ Clerk's Certificate I, G. B. Carr, the City Clerk of the City of Gilroy do hereby certify that the annex- ed copy of ordinance 603 has been compared by me with, and is a true and correct copy of the whole of such Ordinance duly adopted at and appearing among the official minutes of a re<;ular meeting of the CO'TIffiOn Council of such City of Gilroy, held on the 1st day of June, 1959. ~~ City Clerk of the City of Gilroy, County of Santa Clara, State of California