§ 18-11-28 — Service, disability, and survivor pensions - Formulation of optional plan

With the consent of the governing body of the city involved, and in substitution for a pension
payment schedule, disability pension provision, and survivor pension provision provided in
sections 18-11-15, 18-11-16, 18-11-17, and 18-11-26, a firefighters relief association may adopt
a monthly service pension plan, disability pension for members, and pensions for survivors of
deceased members of the association as provided in this section.
1. Normal retirement date. Normal retirement date for a service pension is the first day of
the month coincident with or next following the member's attainment of age fifty-five
and the completion of ten years of service.
2. Service pensions. A member retiring on or after the member's retirement date is
entitled to receive a monthly benefit beginning following the member's actual
retirement and continuing for the member's lifetime as specified in subsection 7. The
benefit amount is equal to two and fifty hundredths percent of average final
compensation, times years of service, up to a maximum of seventy-five percent.
3. Termination benefits. If a member terminates the member's employment as a
firefighter, either voluntarily or by discharge, and is not eligible for any other benefits,
the member is entitled to the following:
a. Nonvested termination. If the member has less than ten years of credited service
upon termination, the member is entitled to a refund of the member's
accumulated contributions, payable in a single lump sum payment. Any benefits
already received by the member from the association must be deducted from this
payment. Upon return of the member's accumulated contributions, all of the
member's rights and benefits under the plan are forfeited and terminated. Upon
any re-employment, a firefighter may not receive credit for years or completed
months of service for which the firefighter has withdrawn the firefighter's
accumulated contributions from the plan, unless the firefighter repays into the
plan the contributions the firefighter has withdrawn, with interest, as determined
by the board, within ninety days after the firefighter's re-employment. A member
may voluntarily leave the member's accumulated contributions in the plan for a
period of five years after leaving the employ of the department pending the
possibility of being re-employed as a firefighter, without losing credit for the time
that the member was a member of the plan. If a member who is not vested is not
re-employed as a firefighter with the department within five years, the member's
accumulated contributions must be returned. During this period, the member is
not entitled to any benefits under subsection 4 or 5.
b. Vested termination. If the member has ten or more years of service upon
termination, the member is entitled to a monthly retirement benefit, determined in
the same manner as a service pension, and based upon the member's service
and the applicable pay in effect at the time of termination. The monthly benefit
amount commences upon application by the member, at the member's normal
retirement age. Alternatively, upon the member's request, the member's
accumulated contributions must be returned to the member. Following payment
under such election, neither the member nor the member's beneficiaries or estate
is entitled to any future benefit payments from the fund.
4. Disability pensions.
a. Eligibility. An active member who becomes disabled before the member's normal
retirement date is eligible to receive a disability pension.
b. The disability benefit is determined as follows:
(1) Benefit amount. The monthly benefit under the disability pension equals ten
percent times the member's years of credited service, up to a maximum of

fifty percent times the monthly salary of a top paid firefighter for the year that
the first benefit is paid, reduced as described in this paragraph. When a
member eligible to receive a disability pension attains the member's normal
retirement date, the member's monthly benefit equals the greater of the
disability pension after adjustment for other income or the service pension. If
the service pension is greater, the disability benefit must cease and the
member must be treated in all respects as a service pensioner.
(2) Adjusted for other income before age sixty-five. The disability pension
amount must be reduced by one dollar for every "excess dollar". "Excess
dollar" is the sum of earned income plus payments by the association, plus
other insurance payments, less the salary of a top paid firefighter on
January thirty-first of the year that the excess dollar amount is determined.
This reduction must be redetermined each year. For purposes of this
provision, earned income is all income reported or reportable for federal
income tax purposes, excluding passive income, but including wages,
salary, commissions, and similar pay from any gainful work, including
partnership profits when applicable. For purposes of this provision, passive
income is interest, rent, receipts, inheritance payments, private disability
insurance, or other payments not related to wages. Other insurance
payments received by a disabled member of the association for disability
must be included in the excess dollar calculation without any reduction for
taxes or other miscellaneous payments. For purposes of this provision,
insurance includes disability benefits provided by the city or under workers'
compensation or similar legislation, as well as primary and dependent
disability benefits provided under social security. Any lump sum payment
attributable to wages or insurance payments received by the member will be
prorated over the period of time for which the payment is intended to provide
benefits.
(3) Adjustment for other income ceases after age sixty-five. The "excess dollar"
becomes zero and the association no longer has the right nor the
responsibility to determine the excess dollar calculation for that disabled
member of the association.
c. Determination of benefit amount by board. Every disabled member of the
association who disagrees with the findings of the association with regard to the
benefit calculation may have the calculation determined by an independent third
party in an arbitration process, the results of which are final. The association has
the right and responsibility to all active members to determine the excess dollar
calculation for each disabled member of the association. Any attempt to
fraudulently receive benefits under this section by misrepresenting a physical
condition or withholding information affecting benefit payments may be cause for
dismissal from the association and immediate suspension of all benefit payments,
current or future.
d. Application for benefit. All applications for pensions must be made on forms
furnished by the association. Applicants shall answer all questions under oath
and furnish such evidence as the board requests. Should any doubt arise in
regard to the existence of disability, the matter must be referred to three
physicians, one to be chosen by the applicant, one to be chosen by the board,
and the two physicians so selected shall choose a third physician. In such case,
the three physicians thus chosen shall examine the applicant and report to the
board.
e. Suspension of disability pension pending proof of income. A disabled member
shall provide proof of earned income to the association by April fifteenth each
year. The proof provided must be in the form of earned income reported to the
internal revenue service. If a disabled member is unable to provide proof of
earned income by April fifteenth each year, the excess dollar amount is presumed
sufficient to reduce the disability pension to zero dollars until the association

receives adequate information to accurately determine the excess dollar amount.
The association shall pay a disabled member the disability pension amount that
was suspended, up to twelve months, in one lump sum once earned income
information is received and the association accurately determines the amount
owed to the disabled member.
5. Optional forms of payment.
a. Normal form of benefit. For a member married at retirement, the normal form of
payment of the service pension or deferred vested pension is a monthly payment
for the member's lifetime, with fifty percent of this amount payable to the
member's surviving spouse. For a member who is not married at retirement, the
normal form of payment is a monthly payment for the member's lifetime, with no
survivor payments, but actuarially adjusted as described in subdivision b as if the
member were married to a spouse of the same age.
b. Optional forms of benefits. In place of the normal form of benefit provided in
subdivision a, a member may elect to receive an actuarially equivalent benefit,
based on the factors provided in subsection 8, in one of the following optional
forms of payment:
(1) Life annuity. A monthly benefit payable for the member's lifetime only, with
no survivor benefits payable.
(2) Certain and life annuity. A monthly benefit payable for the member's lifetime,
but with one hundred twenty payments guaranteed. If the member dies
before receiving one hundred twenty payments, monthly payments will be
made to the member's designated beneficiary or estate until one hundred
twenty payments have been paid.
(3) Joint and survivor annuity. A monthly benefit payable for the member's life,
plus payments equal to seventy-five percent or one hundred percent of this
benefit amount to the member's spouse following the member's death.
Under this option, the surviving spouse is the member's spouse at the time
of retirement. If the spouse dies before the member, no benefits will be paid
to a survivor following the member's death.
c. Benefit selection. A member may select one of the optional forms of payment in
subdivision b during the ninety days prior to the member's actual retirement, or
upon attaining normal retirement age, on a form provided by the board. The
selection may be changed at any time before cashing or depositing the first
retirement payment. Consent of the member's spouse is not required to select or
change an optional benefit form. A member may change the beneficiary
designated under the certain and life payment form at any time prior to the
member's death by filing a new selection form with the board. The beneficiary's
consent is not required. If a member dies after having completed and filed a
selection form with the board, but before actually retiring, the board shall direct
that payments be made as if the member had retired on the member's date of
death and had selected the optional payment indicated in the member's form. If a
member dies after reaching normal retirement age without having completed a
selection form, the board shall direct that payments be made as if the member
had retired on the member's date of death, and had selected the joint and one
hundred percent survivor optional payment form if the member was married on
the member's date of death, or the certain and life form if the member was not
married. If the member's spouse dies after the member has filed forms with the
board selecting a joint and survivor benefit form, but before cashing or depositing
the first retirement payment, and if the member does not file a revised selection
form, the board shall direct that payments be made under subdivision a, providing
for payments to a member who is not married at retirement.
6. Preretirement death benefits.
a. Surviving spouse benefits. If a vested active or vested deferred member dies
before retirement, a pension in the sum of fifty percent of the amount of the
disability pension, or if greater, fifty percent of the deferred vested pension, the

member would have been entitled to on the date of death must be paid to the
surviving spouse for the period of the spouse's natural life.
b. Children's benefit. If a vested active or vested deferred member dies before
retirement, a monthly benefit must be paid to the member's surviving children
until age nineteen, or until completion of high school, whichever occurs first. The
benefit amount to be shared among the children is equal to a percentage of the
top paid firefighter's monthly salary on January thirty-first of the year the benefit is
paid. The percentage is determined based on the number of children at the time
of each benefit payment and whether the children's parent is alive. If the
children's surviving parent is alive, the percentage is twenty percent. If no parent
survives, and there is more than one child, the percentage is sixty percent. If
there is no parent and only one child, the percentage is forty percent. Children
who were living while the deceased was on the payroll of the department, or who
were born within nine months after the decedent was withdrawn from the payroll
of the department, are eligible for this benefit.
c. Minimum benefit. When an active member who is not yet vested dies, the
member's beneficiaries designated on forms provided by the pension association
or the member's estate, in case this form has not been filed with the association,
or in case the designated beneficiaries do not exist or cannot be found within six
months of the date of death, shall receive in addition to the funeral benefit, a sum
equal to what the member has contributed to the association, less the amount of
any benefits received by the active member or the member's beneficiaries or
estate.
7. Commencement of benefits.
a. Payment of benefits. Monthly benefit payments must be distributed on the last
day of each month. For service or deferred pensions, the first payment must be
prorated to equal the total monthly benefit earned, times the number of days in
the month following actual retirement, divided by the total number of days in the
month. Benefits payable to the surviving beneficiary of a retired member who had
been receiving payments commence in the month following the retired member's
death. Benefits payable to the surviving spouse or children of a member who dies
before retirement must be similarly prorated based on the date of death of the
active or deferred member. The final monthly benefit paid in the month a retired
member dies, a surviving beneficiary dies, or a surviving beneficiary ceases to be
eligible for benefits must be paid on the last day of the month of death or
termination of eligibility and must equal a full monthly payment with no reduction
or proration.
b. Mandatory commencement of benefits. Notwithstanding any provision in this
section to the contrary, benefits payable under the plan are subject to the
following:
(1) A member's benefits may not commence later than April first of the calendar
year following the later of the calendar year in which the member attains age
seventy and one-half and the calendar year in which the member terminates
employment. If a lump sum death benefit is payable to a deceased
member's beneficiary, the benefit must be paid no later than sixty days
following the member's date of death.
(2) The member's entire interest in the plan must be distributed over the life of
the member or the lives of the member and a designated beneficiary, over a
period not extending beyond the life expectancy of the member or the life
expectancy of the member and designated beneficiary.
(3) When a member dies after distribution of benefits has begun, the remaining
portion of the member's interest must be distributed at least as rapidly as
under the method of distribution prior to the member's death.
(4) When a member dies before distribution of benefits has begun, the entire
interest of the member must be distributed within five years of the member's
death. The five-year payment rules do not apply to any portion of the

member's interest which is payable to a surviving spouse payable over the
life or life expectancy of the spouse and which begins no later than the date
the member would have reached age seventy and one-half.
(5) The benefits payable must meet the minimum distribution incidental benefit
requirements of section 401(a)(9)(G) of the Internal Revenue Code.
8. Actuarial equivalence - optional forms of benefit. To determine the amount of the
monthly payment under the life-only and certain and life optional forms permitted
under subsection 5, multiply the normal monthly benefit amount by the following
factors:
Life-only benefit: 1.043
Certain and life benefit: 1.030
To determine the amount of the monthly payment under the alternative joint and
survivor optional forms permitted under subsection 5, multiply the normal monthly
benefit amount by the following factors based on the difference in age between the
member and the member's spouse, using the member's and spouse's ages as of the
member's and spouse's most recent birthdays.
If the member is the same age as the spouse, use the following factors:
Joint and seventy-five percent survivor: 0.980
Joint and one hundred percent survivor: 0.960
If the spouse is not the same age as the member, use the following factors:
If the If the
Spouse Is Spouse Is
Younger: Joint and Joint and Older: Joint and Joint and
Age Survivor Survivor Age Survivor Survivor
Difference 75% 100% Difference 75% 100%
1 0.979 0.959 1 0.980 0.960
2 0.978 0.957 2 0.981 0.962
3 0.977 0.956 3 0.981 0.964
4 0.976 0.954 4 0.982 0.965
5 0.976 0.952 5 0.983 0.967
6 0.975 0.951 6 0.984 0.969
7 0.974 0.949 7 0.985 0.970
8 0.973 0.948 8 0.986 0.972
9 0.973 0.947 9 0.986 0.973
10 0.972 0.945 10 0.987 0.975
11 0.971 0.944 11 0.988 0.976
12 0.971 0.943 12 0.989 0.978
13 0.970 0.942 13 0.989 0.979
14 0.969 0.940 14 0.990 0.980
15 0.969 0.939 15 0.991 0.982