86.1630. Tax-exempt status of plan to be maintained--assets of system to be held in trust--member benefits vested, when--distribution of benefits. - Missouri Statutes

Tax-exempt status of plan to be maintained--assets of systemto be held in trust--member benefits vested, when--distributionof benefits.

86.1630. 1. A retirement plan under sections 86.1310 to 86.1640 is aqualified plan under the provisions of applicable federal law. Thebenefits and conditions of a retirement plan under sections 86.1310 to86.1640 shall always be adjusted to ensure that the tax-exempt status ismaintained.

2. The retirement board shall administer this retirement system insuch manner as to retain at all times qualified status under Section 401(a)of the 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 86.1310 to86.1640.

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) The attaining of the age of sixty-five or the member's tenthanniversary of employment, whichever is later;

(2) When the total sum of age and years of service equals or exceedseighty; or

(3) To the extent funded, upon the termination of the systemestablished under sections 86.1310 to 86.1640 or any partial terminationwhich affects the member or any complete discontinuance of contributions bythe 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 86.1310 to 86.1640 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 the limits ofthis section by the amount of the excess. If the total benefits under theretirement system and the benefits and contributions to which any member isentitled under any other qualified plan or plans maintained by the board ofpolice commissioners that employs the member would otherwise exceed theapplicable limits under Section 415 of the Internal Revenue Code, thebenefits the member would otherwise receive from the retirement system arereduced to the extent necessary to enable the benefits to comply withSection 415 of 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 may not exceedsuch other limits as may be applicable at any given time under Section401(a)(17) of the Internal Revenue Code.

8. If the amount of any benefit is determined on the basis ofactuarial assumptions that are not specifically set forth for that purposein sections 86.1310 to 86.1640, the actuarial assumptions to be used arethose earnings and mortality assumptions used on the date of thedetermination by the retirement system's actuary and approved by theretirement board. The actuarial assumptions used at any particular timeshall be attached as an addendum to a copy of the retirement system'sstatute maintained by the retirement board and shall be treated for allpurposes as part of sections 86.1310 to 86.1640. The actuarial assumptionsmay be changed by the retirement system's actuary annually if approved bythe retirement board, but a change in actuarial assumptions shall notresult in any decrease in benefits accrued as of the effective date of thechange.

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 the 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 described in Section 403(b) ofthe Internal Revenue Code and an eligible plan under Section 457(b) of theInternal Revenue Code that is maintained by a state, political subdivisionof a state, or any agency or instrumentality of a state or politicalsubdivision of a state and which agrees to separately account for amountstransferred into such plan from the retirement system. The definition foreligible retirement plan shall also apply in the case of a distribution toa surviving spouse or to a spouse or former spouse who is the alternatepayee under a qualified domestic relations order, as defined in Section414(p) of the Internal Revenue Code; and

(2) For the 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.

(L. 2005 H.B. 323)