86.1270. Retirement plan deemed qualified plan under federal law--board to administer plan as a qualified plan--vesting of benefits--distributions--definitions.

MISSOURI STATUTES AND CODES

86.1270. Retirement plan deemed qualified plan under federal law--board to administer plan as a qualified plan--vesting of benefits--distributions--definitions.

Retirement plan deemed qualified plan under federal law--board toadminister plan as a qualified plan--vesting ofbenefits--distributions--definitions.

86.1270. 1. A retirement plan under sections 86.900 to 86.1280 is aqualified plan under the provisions of applicable federal law. Thebenefits and conditions of a retirement plan under sections 86.900 to86.1280 shall always be adjusted to ensure that the tax-exempt status ismaintained.

2. The retirement board shall administer the retirement system in amanner as to retain at all times qualified status under Section 401(a) ofthe Internal Revenue Code.

3. The retirement board shall hold in trust the assets of theretirement system for the exclusive benefit of the members and theirbeneficiaries and for defraying reasonable administrative expenses of thesystem. No part of such assets shall, at any time prior to thesatisfaction of all liabilities with respect to members and theirbeneficiaries, be used for or diverted to any purpose other than suchexclusive benefit or to any purpose inconsistent with sections 86.900 to86.1280.

4. A member's benefit shall be one hundred percent vested andnonforfeitable upon the member's attainment of normal retirement age, whichshall be the earlier of:

(1) Completion of twenty-five years of service;

(2) Age sixty if the member has completed at least ten years ofcreditable service;

(3) Age seventy without regard to years of service; or

(4) To the extent funded, upon the termination of the systemestablished under sections 86.900 to 86.1280 or any partial terminationwhich affects the members or any complete discontinuance of contributionsby the city to the system.

Amounts representing forfeited nonvested benefits of terminated membersshall not be used to increase benefits payable from the system but may beused to reduce contributions for future plan years.

5. Distribution of benefits shall begin not later than April first ofthe year following the later of the calendar year during which the memberbecomes seventy and one-half years of age or the calendar year in which themember retires, and shall otherwise conform to Section 401(a)(9) of theInternal Revenue Code.

6. A member or beneficiary of a member shall not accrue a serviceretirement annuity, disability retirement annuity, death benefit, whetherdeath occurs in the line of duty or otherwise, or any other benefit undersections 86.900 to 86.1280 in excess of the benefit limits applicable tothe fund under Section 415 of the Internal Revenue Code. The retirementboard shall reduce the amount of any benefit that exceeds those limits bythe amount of the excess. If the total benefits under the retirementsystem and the benefits and contributions to which any member is entitledunder any other qualified plan or plans maintained by the board of policecommissioners that employs the member would otherwise exceed the applicablelimits under Section 415 of the Internal Revenue Code, the benefits themember would otherwise receive from the retirement system shall be reducedto the extent necessary to enable the benefits to comply with Section 415of the Internal Revenue Code.

7. The total salary taken into account for any purpose for any memberof the retirement system shall not exceed two hundred thousand dollars peryear, subject to periodic adjustments in accordance with guidelinesprovided by the United States Secretary of the Treasury, and shall notexceed such other limits as may be applicable at any given time underSection 401(a)(17) of the Internal Revenue Code.

8. If the amount of any benefit is to be determined on the basis ofactuarial assumptions that are not otherwise specifically set forth forthat purpose in sections 86.900 to 86.1280, the actuarial assumptions to beused are those earnings and mortality assumptions being used on the date ofthe determination by the retirement system's actuary and approved by theretirement board. The actuarial assumptions being used at any particulartime shall be attached as an addendum to a copy of the retirement system'sstatute that is maintained by the retirement board and shall be treated forall purposes as a part of sections 86.900 to 86.1280. The actuarialassumptions may be changed by the retirement system's actuary annually ifapproved by the retirement board, but a change in actuarial assumptionsshall not result in any decrease in benefits accrued as of the effectivedate of the change.

9. Any member or beneficiary who is entitled to receive anydistribution that is an eligible rollover distribution, as defined bySection 402(c)(4) of the Internal Revenue Code, is entitled to have thatdistribution transferred directly to another eligible retirement plan ofthe member's or beneficiary's choice upon providing direction to thesecretary of this retirement system regarding the transfer in accordancewith procedures established by the retirement board.

10. For all distributions made after December 31, 2001:

(1) For the purposes of subsection 9 of this section, an eligibleretirement plan shall also mean an annuity contract described in Section403(b) of the Internal Revenue Code and an eligible plan under Section457(b) of the Internal Revenue Code which is maintained by the state,political subdivision of a state, or any agency or instrumentality of astate or political subdivision of a state and which agrees to separatelyaccount for amounts transferred into such plan from the retirement system.The definition of eligible retirement plan shall also apply in the case ofa distribution to a surviving spouse or to a spouse or former spouse who isthe alternate payee under a qualified domestic relations order, as definedin Section 414(p) of the Internal Revenue Code; and

(2) For purposes of subsection 9 of this section, a portion of adistribution shall not fail to be an eligible rollover distribution merelybecause the portion consists of after-tax employee contributions which arenot includable in gross income. However, such portion may be paid only toan individual retirement account or annuity described in Section 408(a) or408(b) of the Internal Revenue Code, or to a qualified defined contributionplan described in Section 401(a) or 403(a) of the Internal Revenue Codethat agrees to separately account for amounts so transferred, includingseparately accounting for the portion of such distribution that isincludable in gross income and the portion of such distribution that is notso includable.