§ 6-250. Limitation on benefits.

(a)

Basic limitation. Notwithstanding any provision of this Act, 1927 Ga. Laws, page 265, as amended, to the contrary, the amount of an officer's or employee's annual retirement benefit, calculated as a single life annuity commencing before age 62 or after age 65, shall not exceed $160,000.00, as adjusted as of the first day of each limitation year to the dollar limitation determined by the Commissioner of Internal Revenue pursuant to regulations issued by the Secretary of the Treasury under the authority granted by section 415(d) of the U.S. Internal Revenue Code (the "Code") (the "maximum permissible dollar amount"). For purposes of this section, the term "limitation year" shall mean the calendar year.

As of each January 1, the dollar limitation as determined by the Commissioner of Internal Revenue for that calendar year will become effective as the maximum permissible dollar amount for that calendar year. The dollar limitation applicable to officers and employees who have commenced distribution of their benefit shall be adjusted annually to reflect any changes to the maximum permissible dollar amount.

Employee contributions treated as employer contributions made pursuant to section 6-37(u) shall be considered a part of the benefit subject to the limitations of this section. Officer or employee contributions for prior service with certain other employers shall be subject to the rules of section 6-94. Employee contributions not made pursuant to section 6-37(u) and not made for credit for prior service with certain other employers shall be converted to an annual benefit amount pursuant to Code section 411(c)(2)(B) and shall be subtracted from the total annual benefit subject to the limitations of this subsection (a), provided that such contributions shall be considered to be a separate defined contribution plan maintained by the City of Atlanta and subject to the limitations of Code section 415(c).

If the form of payment under the act is other than a straight-life annuity (with no ancillary benefits), or if the officer or employee has made mandatory or voluntary contributions or rollover contributions, or if any portion of the payment is attributable to assets transferred to the fund from another qualified plan not maintained by the City of Atlanta, the benefit shall be adjusted so that it is actuarially equivalent to a straight-life annuity with no ancillary benefits. For purposes of adjusting any benefit, the actuarially equivalent amount shall be the greater of: (i) the annual amount of the straight life annuity (if any) payable to the officer or employee under the act commencing at the same annuity starting date as the form of benefit payable to the officer or employee; or (ii) the annual amount of the straight life annuity commencing at the same annuity starting date that has the same actuarial present value as the form of benefit payable to the officer or employee, computed using a five percent interest rate and the applicable mortality table. No actuarial adjustment shall be required to reflect the value of any of the following: (A) that portion of any joint and survivor annuity that constitutes a qualified joint and survivor annuity (as defined in Code section 417); (B) benefits that are not directly related to retirement benefits, such as pre-retirement disability and death benefits, and post-retirement medical benefits; and (C) post-retirement cost-of-living increases made in accordance with Code section 415(d) and the regulations thereunder.

The provisions of this section 6-93 shall be applied in accordance with the rules of Code section 415 and the regulations thereunder, and the relevant provisions of the regulations are incorporated by reference herein. If payments to or on behalf of an officer or employee begin on multiple dates, the rules of this Section 6-93 shall be applied on each such date to the relevant portion of the benefit.

(b)

Exception to basic limitation. If the annual retirement benefit payable to an officer or employee under this act does not exceed $10,000.00 for the limitation year with respect to which a determination is being made or any prior limitation year, and the City of Atlanta has not at any time maintained a defined contribution plan (as determined pursuant to the Code section 415(d) regulations) in which the officer or employee has participated, the limitation otherwise imposed by subsection (a) shall not apply. For purposes of determining whether any officer or employee has ever participated in a defined contribution plan, mandatory employee contributions to any defined benefit plan maintained by the City of Atlanta are not to be treated as a separate defined contribution plan maintained by the City of Atlanta.

(c)

Reduction for fewer than ten years of participation. If an officer or employee has participated under the provisions of this act for fewer than ten years, the maximum permissible dollar amount shall be adjusted by multiplying such limitation by a fraction, the numerator of which is the number of the officer's or employee's years of participation as of such date (and any fraction thereof) and the denominator of which is ten. The foregoing reduction shall not apply to (1) disability retirement benefits received by an officer or employee under this act or (2) death benefits received by an officer's or employee's beneficiary under this act.

(d)

Actuarial adjustment when benefits commence before age 62 or after age 65. If an officer's or employee's annual retirement benefit commences before he attains age 62, the maximum permissible dollar amount for the limitation year shall be reduced so that it is the actuarial equivalent of the maximum permissible dollar amount that would be applicable if the retirement benefit had commenced at age 62.

The actuarially equivalent amount shall be equal to the lesser of (A) the maximum permissible dollar amount multiplied by the ratio of the annual retirement benefit payable under the act at the time payments are scheduled to commence, without regard to the limits of this section 6-93, to the annual retirement benefit commencing at age 62, without regard to the limits of this section 6-93, and (B) the actuarially equivalent amount using a five percent interest rate and the applicable mortality table. To the extent that benefits will not be forfeited upon the death of the officer or employee, the mortality decrement shall be ignored for purposes of determining any reduction in the dollar limitation. If any benefits are forfeited upon death the full mortality decrement shall be taken into account. If an officer's or employee's annual retirement benefit commences after age 65, the maximum permissible dollar amount for the limitation year shall be increased so that it is the actuarial equivalent of the maximum permissible dollar amount at age 65. The actuarially equivalent amount shall be equal to the lesser of: (A) the maximum permissible dollar amount multiplied by the ratio of the annual retirement benefit under the act at the time payments are scheduled to commence, disregarding accruals after age 65 and without regard to the limits of this section 6-93, to the annual retirement benefit commencing at age 65, without regard to the limits of this section 6-93, and (B) the actuarially equivalent amount determined using a five percent interest rate and the applicable mortality table.

Notwithstanding the foregoing, the maximum permissible dollar amount shall not be reduced by reason of the commencement of annual retirement benefits before age 62 for (1) any full-time officer or employee with at least 15 years of full-time service with any police or fire department that is organized and operated by the City of Atlanta, (2) disability retirement benefits paid to an officer or employee pursuant to this act or (3) a death benefit paid to a beneficiary pursuant to this act.

(e)

Applicable mortality table. On or after January 1, 2008, "applicable mortality table" shall mean the mortality table specified by the Secretary of the Treasury pursuant to Code section 417(e)(3)(B). Before January 1, 2008, "applicable mortality table" shall mean the mortality table prescribed by Revenue Ruling 2001-62, 2001-2 C.B. 632 or any successor revenue ruling, notice or other guidance provided by the Commissioner of Internal Revenue that establishes a replacement mortality table pursuant to Code section 415(b)(2)(E)(v).

(f)

Preservation of old law benefits. In the case of an officer or employee who participated in one or more defined benefit plans of the City of Atlanta as of the first day of the first limitation year beginning after December 31, 1994, the application of the limitations of this section shall not cause the maximum permissible benefit for such officer or employee under all such defined benefit plans to be less than the officer's or employee's RPA '94 Old-Law Benefit.

For officers or employees with RPA '94 Old-Law Benefits, for purposes of determining whether an officer's or employee's benefit exceeds the limitations of this section after December 31, 1999 (the "RPA '94 Freeze Date"), an officer's or employee's total annual benefit under the act calculated as a straight life annuity shall be determined, and this benefit shall not exceed the maximum permissible dollar amount applicable to the officer or employee. Where an officer's or employee's benefit must be adjusted to an actuarially equivalent straight life annuity, such adjustment shall be calculated as provided under subsection (a) above.

In no event shall an officer or employee receive less than the officer's or employee's RPA '94 Old-Law Benefit. For purposes of determining that an officer or employee receives no less than the officer's or employee's RPA '94 Old-Law Benefit, the limitation applicable to the officer's or employee's RPA '94 Old-Law Benefit ("Old-Law Limitation") shall be determined, and the officer or employee shall receive the RPA '94 Old-Law Benefit to the extent it does not exceed such old-law limitation. Before January 1, 2000 (the "final implementation date"), adjustments to the old-law limitation for benefits that commence before age 62 or after age 65 shall be calculated as provided under Code section 415(b)(2)(E) and the terms of the act as in effect on December 7, 1994. On or after the final implementation date, adjustments to the old law limitation for commencement of benefits before age 62 or after age 65 shall be calculated as provided in subsection (d) above. In no event, however, may an officer's or employee's old-law benefit exceed the officer's or employee's old-law benefit as of the RPA '94 Freeze Date.

For the purposes of this subsection, the term "RPA '94 Old-Law Benefit" shall mean the officer's or employee's accrued benefit under the terms of the act as of the RPA '94 Freeze Date, for the annuity starting date and optional form and taking into account the limitations of Code section 415 as in effect on December 7, 1994, including the participation requirements under Code section 415(b)(5). In determining the amount of an officer's or employee's RPA Old-Law Benefit, the following shall be disregarded: (1) any ordinance or amendment to the act increasing benefits adopted after the RPA '94 Freeze Date, and (2) any cost-of-living adjustments that become effective under Code section 415(d) after the RPA '94 Freeze Date.

If, at any date after the RPA '94 Freeze Date, the officer's or employee's total benefit under the act, before the application of Code section 415, is less than the officer's or employee's old-law benefit, the RPA '94 Old-Law Benefit will be reduced to a benefit equal to the officer's or employee's total benefit.

The use of a different interest rate and mortality table may not increase an officer's or employee's RPA '94 Old-Law Benefit to an amount greater than such benefit as of the RPA '94 Freeze Date.

(Ord. No. 2004-84, § III(3), 11-16-04; Ord. No. 2004-89, § 3, 12-10-04; Ord. No. 2010-69(10-O-1895), § 1, 12-15-10)

Note— Section 11 of Ord. No. 2004-89 provided for an effective date for this section of Jan. 1, 2002.