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HomeMy WebLinkAboutResolutions - 1990.04.05 - 16845Miscellaneous Resolution # 90075 April 5, 1990 BY: PERSONNEL COMMITTEE - John P. Calandro, Chairperson IN RE: RESTATEMENT AND AMENDMENT OF RETIREMENT SYSTEM RULES TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS Mr. Chairperson, Ladies and Gentlemen: WHEREAS your Oakland County Retirement Commission recently directed a thorough review and updating of Retirement System Rules as a result of various tax and law changes and in order to develop rule language more understandable by employees; and WHEREAS your Retirement Commission has reviewed the proposed amended and restated rules and recomliends approval of the amended and restated rules as attached; and WHEREAS no material changes other than those required by law are being recommended and there will be no additional financial impact on the County as a result of implementing the proposed changes; NOW THEREFORE BE IT RESOLVED that the amended and restated Oakland County Retirement System Rules as attached are hereby adopted. Mr. Chairperson, on behalf of the Personnel Committee, I move the adoption of the foregoing resolution. PERSONNEL COMMITTEE Resolution # 90075 April 5, 1990 Moved by Law supported by Bishop the resolution be adopted. AYES: Ferrens, Gosling, Huntoon, Jensen, Johnson, R. Kuhn, S. Kuhn, Law, Luxon,'McCulloch, McPherson, Moffitt, Oaks, Olsen, Pappageorge, Pernick, Price, Rewold, Skarritt, Wolf, Aaron, Bishop, Caddell, Chester, Crake. (25) NAYS: None. (0) A sufficient majority having voted therefor, the resolution was adopted. STATE OF MICHIGAN) COUNTY OF OAKLAND I, Lynn D. Allen, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on April.5 , 1990 with the original record thereof now remaining in my office. In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at Pontiac, Michigan this 5 .th day April 199J) OAKLAND COUNTY EMPLOYEES RETIREMENT SYSTEM RESTATED RESOLUTION FEBRUARY, 1990 GABRIEL, ROEDER., SMITH & COMPANY 8 9 11 12 13 10 Index to the Oakland County Employees Retirement System Restated Resolution Subject Section' Accounting Assets not segregated 59 Employer contributions 56 Interest credits 60 Investment income 57 Member contributions 54 Expense reserve 58 Reserve for pension payments 55 Actuarial Funding 51 Administration Annual report 46 Appeal of denied claim for benefits 40 Application for benefits 37 Correction of errors 63 Internal Revenue Code qualification 64 Investments 47 Retirement Commission Administrative authority 41 Composition 42 Compensation 49 Employment of services 45 Investment authority 47 Meetings 44 Officers 45 Prohibited actions 48 Quorum 44 Records 44 Tables 50 Term of office 43 Vacancy 43 Voting 44 Pensions: commencement & termination 39 Pensions: payment 38 Setoff 62 Subrogation 62 Credited Service Earning Forfeiture of Intervening military service Non-Intervening military service Reciprocal system Reinstatement Disability Benefits Amount of pension 25 Duty incurred 26 Eligibility 24 Limitations on amount of pension 27 Re-examination 28 Suspension of pension 28 Termination of pension 28 Member Contributions Amount of 52 Interest credited 60 Refund on termination of employment 53 Membership in Retirement Plan Eligibility 4 Excluded positions 5 Termination 6 Vested termination 7 Miscellaneous Provisions Benefit groups - amount 16 Benefit groups - composition 14 Benefit groups - eligibility 15 Benefits not assignable 61 Compensation: definition of 3 Final average compensation: definition of 3 Fraud 65 Headings 68 Payment options available 23 Post retirement increases 35 Repeal 67 Severability 66 Normal Retirement Benefits Age and service requirements 18 Amount of pension 19 Conditions 17 Effect of re-employment 22 Maximum 20 Vested former members 21 Survivor Benefits Automatic - amount 30 Automatic - composition 29 Duty incurred 33 Elective - amount 32 Elective - composition 31 Non-duplication 34 Retired member 23 Refund of contributions - active member 53 Refund of contributions - retired member 36 2/90 February, 1990 A RESOLUTION AMENDING AND RESTATING THE OAKLAND COUNTY EMPLOYEES' RETIREMENT SYSTEM RESOLUTION TO INCORPORATE ACCUMULATED CHANGES, REMOVE OBSOLETE MATERIAL, AND TO CONFORM TO APPLICABLE PROVISIONS OF STATE AND FEDERAL LAW. THE COUNTY OF OAKLAND RESOLVES: That the Oakland County Employees Retirement System resolution is hereby amended and restated in its entirety to read as follows: Retirement System Effective Date; Continuation; Purpose. Section 1. The Oakland County Employees Retirement System es- tablished effective January 1, 1946 under authority of Section 12a of Act No. 156, Public Acts of 1851, as amended, is continued for the purpose of providing retirement income to qualifying employees and former employees, and survivor income to their qualifying beneficiaries. The Retirement System does not provide health insurance. Short Title; Application; Effective Date of Restatement. Section 2. (a). This resolution may be cited as the Oakland County retirement resolution. (b). This restatement will apply to individuals employed by the County on and after the effective date of the restatement. The retirement rights of an individual whose County employment ter- minated before the effective date of this restatement will be governed by the provisions of the retirement system resolution in effect on the date the individual last terminated County employ- ment. (c). This resolution shall become effective immediately upon final passage by the Board of Commissioners of the County of Oakland and approval by the County Pension Plan Committee. Definitions. Section 3. As used in this resolution: (a) "Accumulated member contributions" means the balance in a member's individual account in the reserve for member contribu- tions. (b) "Beneficiary" means an individual who is being paid or who has entitlement to the future payment of a pension on account of a reason other than the individual's membership in the retirement system. (c) "Compensation" means the salary or wages paid in money to an employee for personal services rendered the County while a member of the retirement system. Salary and wages shall include overtime pay; longevity pay; payments in consideration of unused vacation and sick leave to the extent permitted under the member's collective bargaining agreement or the merit system rules. Compen- sation shall not include any remuneration or reimbursement not specifically stated to be included. (d) "County" means Oakland County, State of Michigan, and its various offices, boards and departments, and shall include the Board of County Road Commissioners. (e) "Final average compensation" means the average of the annual compensations paid a member during any 5 consecutive years of credited service producing the highest average, contained within the 10 years of credited service immediately preceding the member's last termination of employment with the County, if the member has at least 5 years of credited service. Final average compensation means the aggregate amount of compensa- tion paid a member divided by the member's years and fraction of a year of credited service if the member has less than 5 years of credited service. (f) "Pension" means a series of equal monthly payments by the retirement system. Payment may be for a temporary period or throughout the future life of a retired member or beneficiary. (g) "Retired member" means an individual who is being paid a pension on account of the individual's membership in the retirement system. (h) "Service" means personal service rendered the County while a member of the retirement system and qualifying military service pursuant to Sections 11 and 12. Membership in Retirement System. Section 4. An individual who is employed by the County, its offices or departments in a permanent position normally requiring 1000 or more hours of work per year shall be a member of the retirement system unless employed in an excluded position enumer- ated in Section 5. In case of doubt the Retirement Commission shall decide who is a member. Excluded Positions. Section 5.Excluded positions are: (a) Positions as employees of the Board of County Road Commis- sioners. (b) Positions which are compensated on a basis not subject to the withholding of Federal income taxes or FICA taxes by the County or to existing fringe benefits provided by the County. (o) Positions filled by temporary employees. (d) Any position held by a retired member, unless that posi- tion is subject to the election process. (e) Any position held by a person who is included by law in any other pension or retirement system by reason of the compensa- tion paid by the County, except the Federal Old Age, Survivors and Disability Insurance program. (f) Positions for which the County nays less than 30 percent of all compensation received by the employee from all governmental units. Termination of Membership. Section 6. An individual shall cease to be a member upon termina- tion of employment by the County, or upon ceasing to be employed in a position normally requiring 1000 or more hours of work per year, or upon becoming employed in an excluded position. Upon re-employ- ment by the County, or transfer into a position that is not exclud- ed, the individual shall again become a member. Vested Termination of Membership. Section 7. A member who ceases to be a member for a reason other than retirement or death, and who has 8 or more years of credited service and leaves on deposit in the retirement system the member's accumulated member contributions shall be a vested former member. Credited Service; Earning of. Section S. Service rendered by a member shall be credited to the member's individual credited service account in accordance with rules the Retirement Commission shall prescribe. A member in a position designated by the County as a part-time position shall receive credit for a fraction of a year. The fraction shall be equal to the number of regular hours worked during the year divided by the number of full-time hours for the year. In no case shall - more than one year of credited service be credited on account of all service rendered by a member in any one calendar year. - less than ten days of service in a calendar month be credited as a month of service. - less than ten months of service in a calendar year be credited as a year of service. Credited Service; Forfeiture of. Section 9. Credited service shall be forfeited if an individual ceases to be a member and does not qualify as a vested former member. Credited service shall be forfeited if an individual receives a refund of accumulated member contributions. Credited Service; Reinstatement of. Section 10. A member may have forfeited credited service restored upon satisfaction of each of the following conditions: (a) The retirement system is paid the total amount of accumu- lated member contributions previously withdrawn plus compound interest from the dates of withdrawal to the dates of repayment at rates stipulated by the Retirement Commission; (b) The repayment is initiated and completed within the time periods established by the Retirement Commission. (c) The member was re-employed in a County position involving membership in the retirement system within 3 years of the member's last termination of membership. Intervening Military Service; Conditions for Credited Service. Section 11. A member who leaves the employ of the County to enter any armed service of the United States during any period of compul- sory military service shall be entitled to credited service for periods of active duty lasting 30 or more days, if each of the following conditions are satisfied: (a) The individual is re-employed by the County within 1 year from and after the date of termination of active duty; (b) The individual becomes a member and pays the retirement system the total amount of accumulated member contributions pre- viously withdrawn, plus compound interest from the dates of with- drawal to the dates of repayment; • (c) No more than 5 years of credited service shall be granted on account of all military service of the member; (d) Credited service shall not be granted for periods of military service which are or could be used for obtaining or increasing a benefit from another retirement system. Non-intervening Military Service; Conditions for Credited Service. Section 12. A member who has served in any armed service of the United States shall be entitled to credited service for periods of active duty lasting 30 or more days, if each of the following conditions are satisfied: (a) The member has at least 10 years of credited service, not including any credited service acquired for intervening military service under the provisions of Section 11; (b) The member pays the retirement system 5% of the member's annual, full-time rate of compensation at time of payment multi- plied by the period of service being claimed; (c) Armed service credited a member under this paragraph shall not exceed the smaller of two (2) years and the difference between five (5) years and the intervening armed service credited the member under Section 11; (d) Credited service shall not be granted for periods of military service which are or could be used for obtaining or increasing a benefit from another retirement system; (e) The member entered the armed service before June 1, 1980 or entered during a time of war or emergency condition on or after June 1, 1980; (f) The member elects to purchase the service and contributes the required amount to the retirement system within one (1) year of the member's eligibility date. The eligibility date for County employees whose employment is not subject to collective bargaining is January 1, 1989. The purchase of non-intervening military service will apply to a County employee whose employment is subject to collective bargaining only if included in the applicable bar- gaining agreement. If included, the eligibility date will be as specified in the agreement. Reciprocal Retirement System. Section 13. The retirement system is a reciprocal retirement system under the provisions of Act 88, Public Acts of 1961, as amended. Benefit groups; Composition of. Section 14. The following benefit groups are designated for the purpose of determining benefit eligibility conditions, benefit amounts, and member contribution rates: (a) Benefit group general - option A. All members not in- cluded in benefit group Sheriff's Department whose employment agreements with the County indicate that they are option A employees. (b) Benefit group general - option B. All members not in- cluded in benefit group Sheriff's Department whose employment agreements with the County indicate that they are option B employees. (c) Benefit group Sheriff's Department. All members employed in the Sheriff's Department who are covered by a bargaining agree- ment between the County and the Oakland County Deputy Sheriffs Association or the Command Officers Association. Benefit Groups; Effect on Retirement Eligibility Section 15. Benefit eligibility conditions shall be those applic- able to the member's benefit group at time of termination of membership. If the member has less than 2 years of credited service under the member's last benefit group, benefit eligibility conditions shall be those applicable to the benefit group under which the member last earned at least 2 years of credited service. Benefit groups; Effect on Pension Amount. Section 16. Pension amounts shall be separately determined for each benefit group for which the member has credited service, using retirement system provisions in effect at time of termination of membership. The amount of a pension under optional form of payment SL (Section 19) is equal to the sum of separate amounts determined in accordance with the benefit formula applicable to each benefit group under which the retiring individual has credited service. The amount of pension attributable to credited service under a particular benefit group is equal to a fraction of the amount of pension determined as if the individual's total credited service in force was under the benefit group. The numerator of the fraction is the individual's credited service under the benefit group. The denominator of the fraction is the individual's total credited service. Normal Retirement; Conditions for. Section 17. An individual may retire with a normal retirement pension upon satisfaction of each of the following requirements: (a) A written application for retirement, in the form pre- scribed by the Retirement Commission, has been filed with the retirement system; (b) Membership is terminated prior to the date of retirement; (c) The individual meets the applicable age and/or service requirements for normal retirement. Noimal Retirement; Age and Service Requirements. Section IS. The age and/or service requirements for noLmal retire- ment are: (a) Benefit group general - option A. The individual has attained age 55 years and has 25 or more years of credited service, or the individual has attained age 60 years and has 8 or more years of credited service. (b) Benefit group general - option B. The individual has attained age 55 years and has 25 or more years of credited service, or the individual has attained age 60 years and has 8 or more years of credited service. (c) Benefit group Sheriff Department. The individual has attained age 50 years and has 25 or more years of credited service with the sheriff department, or the individual has attained age 55 and has 25 or more years of credited service, or the individual has attained age 60 years and has S or more years of credited service. Upon normal retirement as provided in this section an individual shall be paid a pension computed according to Sections 19 and 20. -7- Normal Retirement; Pension Amount. Section 19. The applicable benefit amount under form of payment SL (Straight Life) is computed as follows: (a) Benefit group general - option A. 2 percent (.02) of the member's final average compensation multiplied by years of credited service. (b) Benefit group general - option B. 1.8 percent (.018) of the member's final average compensation multiplied by years of credited service. (c) Benefit group Sheriff Department. 2 percent (.02) of the member's final average compensation multiplied by years of credited service. If the member or vested terminated member has credited service with more than one benefit group, the pension amount shall be computed in accordance with the provisions of Section 16. Normal Retirement; Pension Maximum. Section 20. The maximum amount of a pension financed by County contributions is 75 percent (.75) of an individual's final average compensation. Retirement; Vested Foimer Member. Section 21. (a) A vested former member may retire - upon attainment of age 55 with 25 or more years of credited service. - upon attainment of age 50 with 25 or more years of credited service with the Sheriff's Department. - upon attainment of age 60. (b) Withdrawal of accumulated member contributions and forfei- ture of credited service attributable to a period during which contributions to the retirement system were required by or on behalf of the vested former member shall constitute forfeiture of all rights in and to the portion of the pension attributable to the forfeited credited service. (c) Upon retirement as provided in this section a vested former member shall be paid a pension computed according to the provisions of Sections 19 and 20 as in effect on the date the employee ceased to be a member. Re-employment by County; Effect on Pension Payments. Section 22. If a retired member becomes employed in a position covered by the retirement system, he shall be a member of the System again. If he is employed in a position other than a posi- tion representing an elected office, the retired member shall forfeit 1 monthly pension payment for each calendar month in which the retired member renders any such employment. During such employment the retired member shall earn additional credited service and shall contribute to the retirement system if required as a condition of employment. When a member returns to a retired status a benefit shall be calculated under Section 19 or other applicable section of this Resolution based upon all the member's credited service and salary history. The benefit amount to be paid to the member will be the greater of (i) the amount described in this section and (ii) the amount in effect at the end of the member's last period of retirement. Form of payment of a pension. Section 23. A member may elect to have pension payments made under any one, and only one, of the following forms of payment and name a survivor beneficiary. The election and naming of survivor beneficiary shall be made on a form furnished by and filed with the retirement system prior to the date the first pension payment is made. An election of form of payment may not be changed on or after the date the first pension payment is made. A named survivor beneficiary may not be changed on or after the date the first pension payment is made if form of payment A, B or D is elected. A named survivor beneficiary may be changed or may be more than one person if form of payment SL or C is elected. A named survivor beneficiary must have an insurable interest in the life of the member or vested former member when named. Payment shall be made under form of payment SL if there is not a timely election of another form of payment. The amount of pension under forms of payment A, B, C, D or E shall have the same actuarial present value, computed as of the effective date of the pension, as the amount of pension under form of payment SL. No payments shall be made to a survivor beneficiary under form of payments A, B, C or D if duty death benefits under Section 33 become payable on account of the death of the retired member. Form of Payment SL - Straight Life Pension. The retired member is paid a pension for life under form of payment SL. All payments stop upon the death of the retired member. Form of Payment A - Life Payments with Full Continuation to Sur- vivor Beneficiary. The retired member is paid a reduced pension for life under form of payment A. Upon the death of the retired member during the lifetime of the named survivor beneficiary, the named survivor beneficiary is paid the full amount of reduced pension until death. -9- Form of Payment B - Life Payments with One-Half Continuation to Survivor Beneficiary. The retired member is paid a reduced pension for life under form of payment B. Upon the death of the retired member during the lifetime of the named survivor beneficiary, the named survivor beneficiary is paid one-half the amount of reduced pension until death. Form of Payment C - Life Payments with Ten Years Certain. The retired member is paid a reduced pension for life under form of payment C. Upon the death of the retired member, if the retired member received fewer than 120 monthly pension payments, the named survivor beneficiary is paid the full amount of reduced pension for the remainder of 120 months. If the named survivor beneficiary has died before the retired member, or dies before the 120 months have elapsed, the remaining monthly payments shall be paid to the estate of the last alive of the retired member and the named survivor beneficiary. Form of Payment D - Life Payments with Continuation to Survivor peneficiary with Pop-up. (1) Full Continuation - The retired member is paid a reduced pension for life under form of payment D-1. Upon the death of the retired member during the lifetime of the named survivor beneficiary, the named survivor beneficiary is paid the full amount of reduced pension until death. Should the named survivor benefi- ciary die before the retired member, the retired member's pension shall be recomputed (pop-up) to a straight life pension (form of payment SL). (2) One-Half Continuation - The retired member is paid a reduced pension for life under form of payment D-2. Upon the death of the retired member during the lifetime of the named survivor beneficiary, the named survivor beneficiary is paid one-half the amount of reduced pension until death. Should the named survivor beneficiary die before the retired member, the retired member's pension shall be recomputed (pop-up) to a straight life pension (form of payment SL). Form of Payment E - Life Payments with Social Security Equating. The retired member is paid an increased pension until age 65 and a reduced pension for life thereafter under form of payment E. The increased pension payable until age 65 shall approximate the sum of the reduced pension payable after age 65 and the retiring member's estimated age 65 Social Security primary insurance amount. Form of payment E is available only to members who retire after attaining age 60 and before attaining age 65. All payments stop upon the death of the retired member. Disability Retirement; Conditions for. Section 24. The Retirement Commission may retire a member who becomes incapacitated for continued employment by the County if each of the following conditions are met: (a) Application for disability retirement is filed with the Retirement Commission by either the member or the member's Depart- ment Head; (b) The member has 10 or more years of credited service; -10- (c) The member undergoes all medical examinations and tests ordered by the Retirement Commission, and releases to the Retire- ment Commission all medical reports and records requested by the Retirement Commission; (d) The medical director certifies to the Retirement Commis- sion in that (i) the member is mentally or physically totally incapacitated for continued employment by the County, (ii) the incapacity is likely to be permanent and (iii) the member should be retired. The effective date of a disability retirement shall not predate (i) the date of disability, or (ii) the date the member ceases to be paid by the County; (e) If the member does not concur in the opinion of the medical director, a medical committee shall be appointed. The medical committee shall be composed of the medical director, one physician named by the member and one physician named by the other 2 physicians. If the medical committee certifies to the Retirement Commission in writing, by majority opinion, that (i) the member is mentally or physically totally incapacitated for continued employ- ment by the County and (ii) the incapacity is likely to be perma- nent, the majority opinion of the medical committee shall supersede the certification of the medical director. Disability Retirement; Pension Amount; Form of Payment. Section 25. The amount of a disability pension shall be computed in the same manner as a normal retirement pension, based upon the member's credited service and compensations earned until the termination of County employment. Section 20 shall apply. The disability retired member shall have the right to elect form of payment SL, A, B, C or D provided in Section 23. Disability Retirement; Special Provisions if Duty Incurred. Section 26. The following exceptions to the provisions of Sections 24 and 25 shall apply if the Retirement Commission finds that the member's disability is the direct result of the member's perfor- mance of duty as an employee of the County: the requirement of 10 years of credited service shall be waived; credited service shall include years and fraction of a year, if any, between the effective date of the disability pension and the date the member would attain age 60 years; the pension amount shall not be less than 17 percent of the member's final average compensation. Disability Retirement; Limitation on Pension Amount. Section 27. (a) The amount of a disability pension shall not exceed the difference between one hundred percent of the disability retired member's gross annual rate of compensation at date of retirement and the amount of the disability retired member's considered income. -11- (b) A disability retired member's considered income is the annualized sum of the following. amounts: (1) Remuneration for personal services rendered in any gainful employment; (2) Worker's compensation weekly benefits, redemp- tions and settlements on account of the same disability for which retired. If there is a redemption or settlement of the worker's compensation benefit, weekly benefits at the established amount shall be considered to continue until the weekly benefits equal the amount of the redemption or settlement. Thereafter, the member will be considered to have no income from worker's compensation benefits. Worker's compensation benefits for bona fide medical expenses, as determined by the Commission, shall not be considered income; (3) Unemployment insurance or similar payments by reason of the member's County employment. If a disability retired member's•considered income for a year exceeds the member's gross annual rate of compensation at date of retirement, such excess shall be carried forward as considered income for the following year. (c) Application of the limitation shall be to the amount of pension under form of payment SL. The effect of an election of any other form of payment shall be taken into account after application of the provisions of this section. (d) The Retirement Commission shall periodically request substantiated income information from the retired member. Failure to provide the requested information within ninety (90) days of the request shall cause suspension of payment of the pension until the information is received. Disability Retirement; Continuation Subject to Re-examination; Suspension/Termination of Pension. Section 28. (a) At least once each year during the first 5 years following a member's retirement for disability and at least once in every 3 year period thereafter, the Retirement Commission may require a disability retired member to undergo a medical or other re-evaluation by the medical director if the individual has not attained age 60 years. If the disability retired member refuses to submit to re-evaluation, payment of the pension may be suspended by the Retirement Commission. If the refusal continues for one year, the Retirement Commission may revoke the disability retired mem- ber's rights in and to the disability pension. A disability pension shall be terminated if the medical director reports that the disability retired member is no longer mentally or physically totally incapacitated for continued employment by the County and the Retirement Commission concurs with the report. (b) The membership status of a terminated disability retired member who is returned to County employment shall be governed by the provisions of Sections 4 and 5. Actual credited service at time of disability retirement shall be restored when the member again acquires membership. Credited service shall not be granted for the period of disability retirement unless the member was in receipt of a disability pension on account of a disability arising out of and in the course of County employment. -12- (e) A disability retired member whose benefit has been ter- minated who does not reacquire membership and restoration of credited service shall have actual credited service at time of disability retirement restored if such restoration enables the individual to become a vested former member. Survivor Pension; Conditions for Automatic Pension to Spouse. Section 29. A pension shall be paid for life to the surviving spouse of a deceased member if the following conditions are met: (a) The member was married to the surviving spouse at time of death; and either (b) The member had 10 or more years of credited service and died while an employee of the County; or (c) The member was a vested former member who had 20 or more years of credited service. Survivor Pension; Amount of Automatic Pension to Spouse. Section 30. The amount of the automatic survivor pension shall be computed as if the deceased member had retired the day preceding death with a normal retirement benefit (Sections 17-20) and nominated the spouse as the survivor beneficiary. If the deceased member had 15 or more years of service or had attained age 60, the survivor pension will be calculated as if form of payment A (Sec- tion 23) had been elected. If the deceased member had fewer than 15 years of service and was under age 60, the survivor pension will be calculated as if form of payment B (Section 23) had been elected. The spouse pension shall commence at the time stipulated in Section 39. Upon the death of the spouse, the pension shall terminate. Survivor Pension; Elective Beneficiary; Conditions for Coverage. Section 31. (a) A member may name a contingent survivor benefici- ary for the exclusive purpose of being paid a pension under the provisions of this section. The naming of a contingent survivor beneficiary shall be made on a form provided by and filed with the retirement system. The named contingent survivor beneficiary may be changed or the election revoked at any time. (b) A pension shall be paid to the named contingent survivor beneficiary, for life, if each of the following conditions are met: (1) The member dies while an employee of the County. (2) The member, at time of death, has 25 or more years of credited service; or,. is age 60 years or older and has 10 or more years of credited service.. (3) The named contingent survivor beneficiary is found by the Retirement Commission to have been dependent upon the deceased member for at least 50 percent of the individual's finan- cial support. Survivor Pension; Elective Beneficiary; Amount of Pension. Section 32. The amount of pension paid to the elective beneficiary shall be computed as if the deceased member had retired under the applicable normal retirement provisions (Sections 17 - 20) the day preceding death, elected form of payment A, and named the elective beneficiary as survivor beneficiary. The pension shall terminate upon the death of the elected beneficiary. Survivor Pension; Special Provisions if Duty Incurred. Section 33. In the event a member dies, or disability retired member dies within 3 years of the date of retirement, and the Retirement Commission finds that the death is the direct result of the member's or disability retired member's performance of duty as an employee of the County and if worker's compensation is granted on account of the death arising out of and in the course of County employment, the following provisions shall apply in lieu of Sec- tions 29 through 32: (a) If the member had not retired, the accumulated member contributions shall be refunded in accordance with Section 53; (b) The surviving spouse of the deceased member or retired member shall receive a pension equal to the spouse's weekly worker's compensation converted to an annual basis. The spouse's pension shall begin upon termination of the statutory period for payment of the worker's compensation and shall continue until the earlier of the spouse's remarriage or death. As used in this section, the term spouse means the person to whom the member or retired member was married at the time the member's or retired member's last employment with the County was terminated; (c) If the deceased member or retired member leaves an unmar- ried child or children under age 18 years, each such child shall receive a pension equal to the child's weekly worker's compensation converted to an annual basis. The child's pension shall begin upon termination of the statutory period for payment of the worker's compensation and shall continue until the earliest of the child's adoption, marriage, attainment of age 18 years or death. If there is no spouse to receive a spouse's pension or the spouse's pension is terminated, each such child's pension shall be increased by an equal share of the spouse's pension; (d) The deceased member's or retired member's parents shall each receive a pension equal to such parent's weekly worker's compensation converted to an annual basis. The parent's pension shall begin upon termination of the statutory period for payment of the parent's worker's compensation and shall continue until the earlier of remarriage or death; -14- (e) In no case shall the sum of the annual benefits provided in paragraphs (b), (c) and (d) of this section exceed the greater of (i) $4,800 and (ii) 2 percent of the deceased member's or retired member's final average compensation multiplied by the member's or retired member's credited service not to exceed 37.5 years. Survivor Pension; Only One Pension Payable. Section 34. No pension payments shall be made under the provisions of Sections 29 and 30 if any pension is or will be paid under the provisions of Sections 31 and 32. No pension payments shall be made under the provisions of Sections 29, 30, 31 and 32 if any pension is or will be paid under the provisions of Section 33. Post-Retirement Benefit Increases Section 35. Each monthly pension which becomes effective on or after January 1, 1969 shall be redetermined each May 1 that is at least 12 full months after the effective date of the pension. The redetermined amount shall be the amount of the pension otherwise payable increased by 1.5 percent for each full year between the effective date of the pension and the date of redetermination. The redetermined amount shall not exceed the amount resulting from multiplying (a) times (b) and dividing the product by (c), where - (a) is the amount of the pension otherwise payable, - (b) is the average of the C. P. I. W for the calendar year immediately preceding the date of the redetermination, and - (c) is the average of the C. P. I. - W for the calendar year immediately preceding the effective date of the pension. The redeteimined amount shall not be less than the amount of the pension otherwise payable. "The amount of the pension otherwise payable" means the monthly amount of pension which would be payable disregarding these provisions redetermining benefit amounts after retirement. "C. P. I. - W" means the Consumer Price Index for Urban Wage Earners and Clerical Workers - United States City Average as determined by the United States Department of Labor and in effect for January 1988. If the C. P. I. - W is restructured after 1988 in a manner materially changing its character, the Retirement Commission, after receiving the advice of the actuary, shall change the application of the C. P. I. - W so that, as far as is practicable, the general effect of using the restructured C. P. I. W shall be similar to the general effect of using the C. P. I. W before restructuring. Guaranteed Minimum Aggregate Payout. Section 36. If all pension payments permanently terminate before there has been paid an aggregate amount equal to the retired member's, deceased member's, or deceased vested former member's accumulated member contributions at time of retirement, the dif- ference between the amount of accumulated member contributions and -15- the aggregate amount of pension payments made shall be paid to such individual or individuals as the former member may have named on a form provided by and filed with the retirement system. If no such named individual survives, the difference shall be paid to the legal representative of the last to survive of the individual who was being paid a pension or the named individuals. Pensions; Application for. Section 37. The date of a member's retirement shall be not less than 30 days nor more than 90 days after the member files with the Retirement Commission, on forms provided by the Board, a written application for retirement. Pensions; Payment of. Section 38. All payments from the retirement system shall be made according to the provisions of law, this resolution and procedures approved by the Retirement Commission. Pensions; Commencement, Duration and Change. Section 39. (a) A normal or disability pension shall commence on the date of the member's or vested former member's retirement. A survivor pension for a member who died while employed by the County shall commence on the day following the member's death. A sur- vivor pension for a vested former member shall commence on the date the vested former member would have been eligible to retire (Section 21) based upon the credited service and retirement provisions in effect on the date of the member's death. A post- retirement survivor pension shall commence the day following the retired member's death. (b) Pensions are paid in 12 equal installments on the last day of each month. If the commencement date of a pension is not the first day of a calendar month, the amount of the first pension payment shall be pro-rated in proportion to the number of days between the commencement date and the last day of the calendar month containing the commencement date. (c) A pension shall terminate at the end of the calendar month in which the event causing the termination occurred. Payment for the month of termination shall be pro-rated in proportion to the number of days between the first day of the calendar month and day on which the terminating event occurred. (d) A change in the amount of a pension shall occur, if not specified elsewhere, on the first day of the calendar month next following the date of the event causing the change. Denial of Claim for Benefits; Appeal to Retirement Commission. Section 40. A benefit claimant shall be notified in writing, within 30 days, of a denial of a claim for benefits. The notifica- tion shall contain the basis for denial. The benefit claimant may appeal the denial and request a hearing before the Retirement Commission. The appeal shall be in writing and filed with the retirement system within 90 days of the date of the notification of denial. The request for appeal shall contain a statement of the claimant's reasons for believing the denial to be improper. The Retirement Commission shall schedule a hearing of the appeal within 60 days of receipt of the request for appeal. Retirement Commission; Authority and Responsibility. Section 41. The administration, management and responsibility for the proper operation of the retirement system, and for interpreting and making effective the provisions of the retirement resolution are vested in a Retirement Commission. Retirement Commission; Composition of. Section 42. The Retirement Commission shall consist of the follow- ing nine individuals: (a) The chairperson of the Board of County Commissioners by virtue of that office; (b) The County Executive by virtue of that office; (c) The chairperson of the County Finance Committee by virtue of that office; (d) The County Treasurer by virtue of that office; (e) A citizen, who is an elector in Oakland County who is not eligible for membership in the retirement system or benefits under the retirement system and who does not hold any other office or ap- pointment with the County, to be selected by the Board of County Commissioners. (f) Three members of the retirement system who are not elected officials, to be elected by the members of the retirement system. The three Commissioners shall be from different County departments. (g) A retired member of the retirement system who resides in Oakland County, to be elected by the retired members of the retire- ment system. The Retirement Commission shall establish rules and regulations for elections required by paragraph (f) and (g). Retirement Commission; Term of Office; Oath of Office; Vacancies. Section 43. (a) The term of office of the member elected Commis- sioners shall be 4 years. The term office of the citizen Commis- sioner shall be 4 years, one term expiring each year. The term office of the retired member Commissioner shall be 2 years. (b) Each Commissioner shall, prior to taking office, take an oath of office administered by the County Clerk. (c) A vacancy shall occur on the Retirement Commission if a member elected Commissioner ceases to be a member. A vacancy shall occur on the Retirement Commission if a Commissioner resigns. If a member elected Commissioner becomes employed in the same County department as another member elected Commissioner, the transferring Commissioner shall be considered to have resigned. A vacancy shall be filled within 90 days, for the unexpired term, in the same manner as the position was previously filled. Retirement Commission Meetings; Quorum; Voting; Record of Proceed- ings. Section 44. (a) The Retirement Commission shall hold meetings regularly, at least one in each calendar month and shall designate the time and place thereof. All meetings of the Retirement Commis- sion shall be public. Notice of the meetings will be posted in the County building prior to the meeting date. (b) Five attending commissioners shall constitute a quorum at any meeting of the Retirement Commission. (c) Each attending commissioner shall be entitled to 1 vote on each question before the Retirement Commission. At least 4 concur- ring votes shall be required for a valid action by the Retirement Commission. (d) The Retirement Commission shall adopt its own rules of procedure and shall keep a written record of its proceedings. Retirement Commission; Officers; Services. Section 45. (a) The Retirement Commission shall elect from its membership a chairperson and a vice chairperson. (b) The Retirement Commission shall appoint an individual who shall be the secretary to the Retirement Commission and the ad- ministrative officer of the retirement system. (c) The County Treasurer shall be the treasurer of the retire- ment system. The treasurer shall be custodian of the assets of the retirement system except as to such assets as the Retirement Commission may from time to time place in the custody of a nation- ally chartered bank or trust company. -18- (d) The Corporation Counsel shall be legal advisor to the Retirement Commission. (e) The Retirement Commission shall designate as the medical director a physician who is not eligible to participate in the retirement system as a member, retired member or beneficiary. The medical director shall hold office at the pleasure of the Commis- sion. (f) The Retirement Commission shall designate an actuary who shall advise the Board on the actuarial operation of the retirement system. Actuary shall mean a member of the American Academy of Actuaries. A partnership or corporation may be designated as actuary if the duties of actuary are performed by or under the direct supervision of an individual who meets the preceding re- quirement. (g) The Retirement Commission is authorized and empowered to employ such professional and other services as it requires for the proper discharge of its responsibilities. Such services shall be engaged and compensated in the same manner that similar services are engaged and compensated by other departments of the County. The Retirement Commission may utilize the services of County employees if made available. Retirement Commission; Reports. Section 46. The Retirement Commission shall prepare an annual report for each fiscal year. The annual report shall contain information about the financial, actuarial and other activities of the retirement system during the fiscal year. A copy of the annual report shall be furnished the Board of County Commissioners. The Retirement Commission shall furnish the Board of County Commis- sioners such other information about the retirement system as the Board of County Commissioners may from time to time request. Retirement Commission; Investment Authority and Restrictions. Section 47. The Retirement Commission is the trustee of the monies and assets of the retirement system. The Retirement Commission has the authority and power to invest and re-invest the monies and assets of the retirement system subject to all terms, conditions, limitations and restrictions imposed by the State of Michigan on the investments of public employee retirement systems. The Retire- ment Commission shall have full power to hold, sell, assign, transfer and dispose of any securities of the retirement system. The Retirement Commission may employ investment counsel to advise the Board in the making and disposition of investments. In exercising its discretionary authority with respect to the management of the monies and assets of the retirement system, the Retirement Commission shall exercise the care, skill, prudence. and diligence, under the circumstances then prevailing, that an in- dividual of prudence acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and similar objectives. -19- Retirement Commission; Use of Monies and Assets; Prohibited Ac- tions. Section 48. (a) All monies and assets of the retirement system shall be held and invested for the sole purpose of meeting the legitimate obligations of the retirement system and shall be used for no other purpose. (b) Members of the Retirement Commission and its employees are prohibited from: (1) Having a beneficial interest, direct or in- direct, in an investment of the retirement system. (2) Borrowing money or assets of the retirement system. (3) Receiving any pay or emolument from any in- dividual or organization providing services to the retirement system other than compensation for personal services or reimburse- ment of authorized expenses paid by the retirement system. Retirement Commission; Compensation. Section 49. The Commissioners, except for the employee member Commissioners and the retired member Commissioner, shall be paid a per diem for attending meetings of the Commission. All Commis- sioners shall be reimbursed for the actual and necessary expenses they incur in performing their duties as Commissioners. Retirement Commission; Experience Tables and Regular Interest, Section 50. The Retirement Commission shall from time to time adopt such mortality and other tables of experience, and a rate or rates of regular interest, as are necessary in the proper operation of the retirement system on an actuarial basis. Financial Objective of the Retirement System; County Contributions. Section 51. (a) The financial objective of the retirement system is to receive contributions each fiscal year which are sufficient to (i) fund the actuarial cost of benefits likely to be paid on account of credited service earned by members during the fiscal year, and (ii) fund the unfunded actuarial cost of benefits likely to be paid on account of credited service earned by members prior to the fiscal year over a period of not more than 40 years. Contribution requirements shall be determined by annual actuarial valuation using a generally recognized level percent of payroll actuarial cost method. (b) The Retirement Commission shall certify to the Board of County Commissioners the amount of annual contribution needed to meet the financial objective and the Board of County Commissioners shall appropriate and cause the contribution to be paid to the retirement system. -20- Member Contributions; Amounts. Section 52. Member contributions, if any, shall be as provided by County Board of Commissioners Resolutions. Member Contributions; Refunds. Section 53. (a) An individual's accumulated member contributions shall be refunded if the following conditions are met: (1) Membership in the retirement system has been terminated for at least 30 days, or the individual has been laid off for at least 30 days; (2) The individual has not met the applicable age and service condition for normal retirement (Section 18); (3) A disability pension (Sections 24 - 26) is not payable or being paid to the individual; (4) A non-duty survivor pension (Sections 29-32) is not payable or being paid on the individual's behalf. (5)The individual makes application for the refund on a form provided by and filed with the retirement system. (b) If an individual dies and no pension becomes or will become payable on account of the death, the individual's accumu- lated member contributions shall be refunded in accordance with the deceased individual's instructions made on a form provided by and filed with the retirement system. If there be no such instructions or if the individuals who are to be paid the refund no longer live, the accumulated member contributions shall be refunded to the legal representative of the deceased individual. (c) Payments of refunds of accumulated contributions, as provided for in this resolution, may be made in monthly install- ments according to such rules and regulations as the Retirement Commission shall from time to time adopt. (d) Except as otherwise provided in this resolution, after 3 years from the date an employee ceases to be a member, any balance of accumulated contributions standing to the member's credit, in the reserve for accumulated member contributions unclaimed by the member or the member's legal representative, shall be transferred to the reserve for undistributed investment income. Reserve for Accumulated Member Contributions. Section 54. (a) The reserve for accumulated member contributions is the account in which is accumulated the member contributions deducted from the compensation of members and which shall be charged with refunds of accumulated member contributions and transfers of accumulated member contributions as provided in this resolution. Continuation of employment by the member shall con- stitute consent and agreement to the deduction of the applicable member contribution, if any. Payment of compensation less the deduction shall be full and complete discharge of all claims and demands for compensation for personal service rendered the County except as to benefits provided in this resolution. Compensation before deduction of any member contributions shall be considered the member's compensation for purposes of satisfying minimum compensation requirements. (b) The officer or officers responsible for preparing the payroll shall certify to the Retirement Commission on each payroll the amount of contribution to be deducted from the compensation of each member. Each of these amounts shall be deducted, and when deducted shall be paid to the retirement system. Each such amount shall be credited to the account of the individual member from whose compensation the deduction was made. (c) A member's accumulated contributions shall be transferred from the reserve for accumulated member contributions to the reserve for pension payments if a pension becomes payable on account of the member's retirement or death. Reserve for Pension Payments. Section 55. (a) The reserve for pension payments is the account which is credited with transfers from the reserve for accumulated member contributions and the reserve for employer contributions and which is charged with all pension payments and refunds of accumu- lated member contributions which have been transferred to this account. (b) If a disability pension is terminated and the individual again becomes a member or becomes a vested former member, any excess of the accumulated member contributions transferred to this account as a result of the disability retirement over the aggregate amount of pension paid shall be transferred to the reserve for member contributions. (c) Each year following receipt of the report of the annual actuarial valuation, if the balance in the reserve for pension payments is less than the actuarial present value of pensions being paid retired members and beneficiaries, a transfer of the differ- ence between the present value and the reserve balance shall be authorized from the reserve for employer contributions. The pending transfer shall be taken into account by the actuary when making the actuarial valuation. If the balance in the reserve for pension payments is greater than the actuarial present value of pensions being paid, the Retirement Commission may, in its discretion, authorize a transfer of not more than the difference between the reserve balance and the present value to the reserve for employer contributions. -22- Reserve for Employer Contributions. Section 56. The reserve for employer contributions is the account to which is credited County contributions and from which shall be made transfers to the reserve for pension payments. Reserve for Undistributed Investment Income. Section 57. The reserve for undistributed investment income is the account to which is credited all interest, dividends, and other income from retirement system assets, all gifts and bequests, and, all other monies received by the retirement system the disposition of which is not specifically provided. There shall be transferred from this reserve account all amounts required to credit interest to the other reserve accounts. Any balance remaining after inter- est has been credited to the other reserve accounts shall be transferred to the reserve for employer contributions. Reserve for Administrative Expenses. Section 58. (a) The reserve for administrative expenses is the account to which shall be credited all money provided by the County to pay the administrative expenses of the retirement system and to which shall be charged all budgeted and authorized administrative expenses. (b) Whenever the Retirement Commission determines the balance in the account is more than sufficient to cover current charges, the excess of any part thereof may be used to fund contingency reserves or meet special requirements of the other reserve ac- counts. Whenever the balance in the account is insufficient to cover current charges, the amount of the insufficiency shall be transferred to the account from the reserve for employer contribu- tions. Assets not Segregated. Section 59. The descriptions of the reserve accounts shall be interpreted to refer to the account records of the retirement system and not to the segregation of monies or assets by reserve account. Interest Credited to Reserve Accounts. Section 60. (a) The Retirement Commission shall annually credit interest on the individual beginning of year balances in the reserve for accumulated member contributions, and on the mean balance in each of the other reserves of the Retirement System for the preceding fiscal year. No interest shall be credited to the balances in the reserve for accumulated member contributions for members whose County employment has terminated by the end of the year unless the member is a vested former member. The amounts of interest so credited shall be charged to the reserve for undistri- buted investment income. -23- (b) The Retirement Commission shall determine the rate or rates of interest to be used for crediting of interest. Assignments Prohibited. Section 61. (a) The right of an individual to a pension, to a refund of accumulated member contributions, the pension itself, or any other right accrued or accruing to any individual, and the monies and assets of the retirement system, shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency law, or other process of law, except as provided in Section 62 (b) or as specifically required by State of Michigan or Federal law and shall be unassignable except as provided in Section 61 (b) or as required by State of Michigan or Federal law. (b) If an individual is covered under a group insurance or prepayment plan participated in by the County, and makes a per- mitted election to continue such coverage as a retired member or as a beneficiary, the individual may authorize the Retirement Commis- sion to deduct from the individual's allowance payments required to continue coverage under such group insurance or prepayment plan. Subrogation; Right of Setoff. Section 62. (a) If an individual or an individual's estate or beneficiary becomes entitled to a pension, or any other benefit payable upon retirement, by the County or the Oakland County Employees Retirement System (the "System") as the result of an accident or injury caused by the act or omission of any third party(s), the County and the System shall be subrogated to the rights of said individual against such third party(s) to the extent of the benefits the County and the System pays or becomes liable to pay, either to or on behalf of an employee, retired member, and/or beneficiary. For the purposes of this section, the subrogation rights of the County and the System extend to and include the actuarially determined, present day value of all payments and benefits which the County or the System either pays, provides for in a reserve account, or becomes liable to pay, either to, or on behalf of, an employee, retired member, and/or beneficiary. The County and the System shall be subrogated to any and all rights to, or recovery of, damages (including actual, consequential, or punitive damages, and costs or fees) by an employee, retired member, and/or beneficiary from any third party(s) even where the damages recoverable from a third party(s) were not for the same items of injury as those for which the County of Oakland and the System benefits were paid, provided for in reserve, or payable. Upon request, the employee, retired member, and/or beneficiary will execute and deliver to the County and the System an assignment and/or such other instruments that may be required and do whatever else is necessary to secure such rights for the County and the System. If an individual (or his or her beneficiary) becomes entitled to a pension or any other benefit payable upon retirement, by the County or the -24- System, as the result of an accident or injury caused by the act or omission of any third party(s), such individual (or his or her beneficiary or estate) shall not commence or institute any claim or action against the third party(s) without (1) prior written notice to the County and the System, (2) permitting the County and/or the System, within their discretion, to join such claim or action (as its interest appears by reason of this section), and (3) assigning all or a portion of any recovery from such claim or action to the County and/or the System, as provided above, in order to effectuate the purposes of this section. The claimant(s) in such claim or action shall at all times advise the County and System of the nature of the claim and action, the defenses asserted, the ongoing status of the claim and action, and all settlement discussions and negotiations. The claimant(s) shall promptly furnish the County and System with copies of all relevant court papers, pleadings, medical reports, and other such documents. The claimants shall not release, settle, waive, or modify any such claim without the prior written consent of the County and System. Failure to comply with the requirements set forth in this Section 62(a) shall (1) consti- tute a waiver of all rights and a release of all claims, up to the amount of the claim, by an employee, retired member, or beneficiary to a pension or other benefits from the County and the System (which waiver shall be effective notwithstanding the prior com- mencement of benefit payments), and (2) give to the County and System, in addition to all other rights available to them in law or equity, the right of recovery against the employee, retired member, his estate, or beneficiary, as to any monies previously paid. In no event, will the subrogation (or waiver and release) provided for herein reduce any benefit to which the employee, retired member, beneficiary, or estate, but for a disability may be eligible. (b) The retirement system shall have the right of setoff to recover overpayments made by the retirement system and the County shall have the right of setoff to satisfy any claim arising from embezzlement or fraud committed by a member, retired member, vested former member, beneficiary, or other individual having a claim to benefits. Correction of Errors. Section 63. The Retirement Commission shall correct errors in the records of the retirement system. The Retirement Commission shall seek to recover overpayments and shall make up underpayments. Recovery of overpayments may be accomplished by reducing the amount of future payments so that the actuarial present value of actual payments to the recipient is equal to the actuarial present value of the payments to which the recipient was correctly entitled. Internal Revenue Code Qualification. Section 64. (a) The County intends the retirement system to be a qualified pension plan under Section 401 of the Internal Revenue Code, as amended, or successor provisions of law, and that the trust be an exempt organization under Section 501 of the Internal Revenue Code. The Retirement Commission may adopt, or recommend to the Board of County Commissioners for adoption, such additional provisions to the retirement system as are necessary to fulfill this intent. (b) Retirement benefits provided under this Resolution shall not exceed the governmental plan limits set forth in Internal Revenue Code Section 415 and rulings pertaining thereto. Fraud Penalty. Section 65. Whoever with intent to deceive shall make any state- ment or report under this resolution which is untrue, or shall falsify or permit to be falsified any record or records of the retirement system, or who shall otherwise violate the provisions of this resolution as it may from time to time be amended, with intent to deceive, shall be guilty of a misdemeanor and upon conviction shall be fined not to exceed $500, or shall be imprisoned for not to exceed 90 days, or both, in the discretion of the court, togeth- er with payment of costs of prosecution. Severability. Section 66. If any section or part of a section of this resolution is for any reason held to be invalid or unconstitutional, such holding shall not be construed as affecting the validity of the remaining sections of the resolution or the resolution in its entirety. Repeal. Section 67. All resolutions or other provisions of law inconsis- tent with the provisions of this resolution are hereby repealed to the extent of such inconsistency as far as authority is vested in the Board of Commissioners to repeal same. Headings. Section 68. The heading of any section of these rules that pre- cedes the section number shall in no way be deemed to be a part of that section or of this resolution, nor be used to construe this section more broadly or narrowly than the text of the section would indicate, but shall be deemed to be inserted only for the purposes of convenience to persons using this resolution. -26-