§ 36-8-20. Internal Revenue Code qualification.
(a) Intent. It is intended that the retirement system satisfy the requirements of § 401(a) of the Internal Revenue Code of 1986 as amended from time to time, 26 U.S.C. § 401 (hereinafter referred to as the "codeâ€�), in form and operation, to the extent that
those requirements apply to a governmental plan described in § 414(d) of the code,
26 U.S.C. § 414. To this end, the following provisions shall be applicable, administered, and interpreted
in a manner consistent with maintaining the tax qualification of the retirement system,
and shall supersede any conflicting provisions of chapters 8 — 10 of this title, of
chapter 16 of title 16, or of chapter 21 of title 45.
(b) Exclusive benefit. All funds of the retirement systems shall be held in one or more trusts, in one or
more custodial accounts treated as trusts in accordance with § 401(f) of the code,
or in a combination thereof. Under any trust or custodial account, it shall be impossible
at any time prior to the satisfaction of all liabilities with respect to employees
and their beneficiaries, for any part of the corpus or income to be used for, or diverted
to, purposes other than the payment of retirement allowances and other pension benefits
to employees and their beneficiaries. However, this requirement shall not prohibit:
(1) the return of a contribution within six (6) months after the executive director
determines that the contribution was made by a mistake of fact; or (2) the payment
of expenses of the retirement system in accordance with applicable law.
(c) Vesting on plan termination. In the event of the termination (within the meaning of the code) of the retirement
system, the accrued benefits of eligible employees shall become fully and immediately
vested but only to the extent those benefits are already funded.
(d) Forfeitures. Credits forfeited by an employee pursuant to § 36-10-8, § 16-16-31, or § 45-21-28 shall not be applied to increase the benefits of any other employee.
(e) Required distributions. Distributions shall begin to be made not later than the employee's required beginning
date as defined under § 401(a)(9) of the code and shall be made in accordance with
all other requirements of that code section.
(f) Limitation on benefits. Benefits shall not be payable to the extent that they exceed the limitations imposed
by § 415 of the code, 26 U.S.C. § 415, as adjusted from time to time pursuant to § 415(d) of the code. In no event shall
the member receive a retirement benefit in any year that exceeds the limitations set
forth in § 415(b).
(g) Limitation on compensation. Benefits and contributions shall not be computed with reference to any compensation
that exceeds the maximum dollar amount permitted by § 401(a)(17) of the code as adjusted
for increases in the cost-of-living. This provision shall take effect July 1, 1994,
and shall apply only with respect to an employee who first becomes a member of the
retirement system on or after that date.
(h) Actuarial determination. Whenever the amount of any employee's benefit is to be determined on the basis of
actuarial assumptions done by a professional actuary, those assumptions shall be specified
by resolution of the retirement board.
(i) Direct rollovers. Any individual withdrawing any distribution from the retirement system which constitutes
an "eligible rollover distributionâ€� within the meaning of § 402(c) of the code, 26 U.S.C. § 402, may elect, in the time and manner prescribed by the retirement board and after receipt
of proper notice, to have any portion of the distribution paid directly to another
plan that is qualified under § 401(a) or 403(a), 26 U.S.C. § 403(a), of the code, or to an individual retirement account or annuity described in § 408(a)
or (b) of the code, 26 U.S.C. § 408, in a direct rollover.