Section 45-37-123.01
Definitions.
For the purposes of this part, the following terms shall have the following meanings:
(1) ACT. The act adding this part, to be called the General Retirement System for Employees of Jefferson County Act.
(2) ACTIVE MEMBER. An individual who currently is employed by the county or other entities set forth in subdivision (20) and is making employee contributions to the system.
(3) ACTUARIAL EQUIVALENT. Effective July 30, 1984, or such other dates as set forth in Exhibit A, which is maintained in the office of the pension board, a form of benefit differing in time, period, or manner of payment from a specific benefit provided under the plan but having the same value when computed using the mortality tables, the interest rate, and any other assumptions last adopted by the pension board, which assumptions shall clearly preclude any discretion in the determination of the amount of a member's benefit.
(4) ACTUARIAL GAIN. As defined in Section 45-37-123.106(f)(1).
(5) ANNUITY STARTING DATE. As used in Subpart 6 and in Section 45-37-123.106, means, with respect to any member, the first day of the first period for which an amount is paid as an annuity, or, in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred which entitles the member to such benefit.
(6) BASIC AVERAGE SALARY. Generally means, effective as of February 1, 2010, the monthly compensation of a member averaged over the period of 36 consecutive months of paid membership time during which such member's average monthly compensation was higher than any other period of 36 consecutive months of paid membership time. For example, if a member terminated employment on June 20, 2010, and his or her highest consecutive 36 month period ends on the member's date of termination of employment, then the measuring period for determining basic average salary would be from June 21, 2007, through June 20, 2010. The following rules shall apply in calculating basic average salary:
a. Daily Compensation Calculation. Subject to the additional rules stated in this subdivision, the compensation earned in each year, or portion of a year, during the 36-month period shall be determined on a daily basis. The total of the compensation earned in each applicable year, or portion thereof, shall be added together and then divided by 36 to arrive at the member's basic average salary. If the foregoing process is not workable in some situations, then the pension board shall approve a different method which is reasonable given the terms of the act and the individual circumstances.
b. Use of Unpaid Membership Time. The compensation paid to a member during unpaid membership time shall only be considered in determining the member's basic average salary for periods of employment prior to August 16, 1996.
c. Tacking of Nonconsecutive Paid Membership Time. Separate periods of paid membership time may be tacked and considered as consecutive if the member does not have any paid membership time between the periods so tacked. For example, if the member did not have any paid membership time between two periods of paid membership time due to a leave of absence, the leave of absence would be ignored in calculating basic average salary.
d. Post-termination Compensation. Compensation paid subsequent to termination of participation in the system pursuant to Section 45-37-123.52, due to ineligibility, shall not be recognized in computing basic average salary. However, notwithstanding any provisions of this plan to the contrary, a member's final paycheck from the county shall be counted in computing a member's basic average salary, but only to the extent that such paycheck constitutes compensation, and the highest consecutive 36 month period otherwise would end on the date of the member's termination of employment.
(7) BENEFICIARY. The person, or entity, designated as provided in Section 45-37-123.103(d) to receive the benefits which are payable under the plan upon or after the death of a member.
(8) BENEFIT ENHANCEMENT. An across the board increase to a previously awarded benefit to which a member is entitled.
(9) CIVIL SERVICE SYSTEM. The personnel system administered and operated by the Jefferson County Personnel Board.
(10) COMMISSION. The Jefferson County Commission.
(11) COMPENSATION.
a. With respect to any member means:
1. The regular salary or hourly wages paid to a member, based on his or her pay grade, as established by the Jefferson County Personnel Board, or other appropriate authority, for a calendar year ending with or within the applicable plan year including any employee contributions pursuant to Section 45-37-123.82(a);
2. Plus any accumulated vacation time paid by the county;
3. Plus Worker's Compensation benefits, only as described in subdivision (59); and
4. Any differential wage payment, as defined in § 3401(h)(2), Internal Revenue Code, generally relating to military pay.
b. Bonuses, overtime, longevity pay, paid accumulated sick leave that is paid in the form of a lump sum, uniform allowances, expense allowances, and any other nonregular forms of compensation are excluded.
c. Compliance with § 401(a)(17), Internal Revenue Code. Because the transitional rule provided by Treasury Regulation § 1.401(a)(17)-1(d)(4) of the regulations issued under § 401(a)(17), Internal Revenue Code, does not apply to the plan, compensation of each member taken into account in determining benefit accruals in any plan year beginning after December 31, 2001, shall not exceed two hundred thousand dollars ($200,000), or such other amount provided in the Internal Revenue Code. Such amount shall be adjusted for increases in the cost of living in accordance with § 401(a)(17)(B), Internal Revenue Code, except that the dollar increase in effect on January 1 of any calendar year shall be effective for the calendar years beginning with such calendar year. For any short calendar year, the compensation limit shall be an amount equal to the compensation limit for the calendar year in which the calendar year begins multiplied by the ratio obtained by dividing the number of full months in the short calendar year by 12. For purposes of determining benefit accruals in a plan year beginning after December 31, 2001, compensation for any prior calendar year shall be limited to one hundred fifty thousand dollars ($150,000) for any calendar year beginning in 1996, one hundred sixty thousand dollars ($160,000) for any calendar year beginning in 1997, 1998, or 1999; and one hundred seventy thousand dollars ($170,000) for any calendar year beginning in 2000 or 2001.
(12) COUNTY. Jefferson County, Alabama, and any successor which shall maintain this plan. However, references herein to employment by the county also shall include employment by such other entities set forth in subdivision (20) and by entities for which the county is acting as payroll agent or wherein the county is being reimbursed by an entity for the compensation of such entities' workers or wherein the entity has appointing authority with respect to the workers. Accordingly, such entities' workers shall be covered by the plan to the extent allowed under the act and as determined by the pension board in its administration of the plan.
(13) DEFERRED RETIREMENT BENEFIT. A benefit payable pursuant to the terms of Section 45-37-123.100(c).
(14) DESIGNATED BENEFICIARY. As defined in Section 45-37-123.103(d).
(15) DISABILITY RETIREMENT BENEFIT. A benefit payable pursuant to the terms of Section 45-37-123.102.
(16) DISTRIBUTION CALENDAR YEAR. As defined in Section 45-37-123.106(f)(3).
(17) EARLY RETIREMENT BENEFIT. A benefit payable pursuant to the terms of Section 45-37-123.100(b).
(18) EFFECTIVE DATE. January 1, 2010, except as otherwise provided.
(19) ELIGIBLE COST-OF-LIVING INDEX. As defined in Section 45-37-123.106(f)(4).
(20) ELIGIBLE EMPLOYEE.
a. The following individuals affiliated with Jefferson County, Alabama, or the State of Alabama:
1. Any person employed by Jefferson County at a wage or salary payable at regular intervals, whether or not such person is subject to the civil service system in operation in Jefferson County.
2. Any person elected or appointed to a job or position with or for Jefferson County, whose compensation was paid or shall be paid, in whole or in part, by Jefferson County while occupying such job or position.
3. Any person who occupies a county office in Jefferson County that is created by an act of the Legislature of the State of Alabama or is provided for by the Constitution of Alabama of 1901, and such office requires full-time service. Such person is an eligible county office employee.
4. Any person who is an officer or an employee of a hospital created by Jefferson County if such person's employment status with the hospital is such that if the person had the same employment status with Jefferson County, he or she would be an eligible employee. Such person is an eligible hospital employee.
5. Any person employed by the General Retirement System for Employees of Jefferson County at a wage or salary payable at regular intervals, whether or not the person is subject to the civil service system in operation in Jefferson County.
6. Any person employed by the Personnel Board of Jefferson County at a wage or salary payable at regular intervals, whether or not the person is subject to the civil operation in Jefferson County.
7. Any person employed by an entity for which the county is acting as payroll agent or for which the county has agreed to be reimbursed by the entity for the compensation paid to the person, whether or not the person is subject to the civil service system in operation in Jefferson County.
b. An eligible employee shall not include:
1. Any person who is appointed or elected as a member of any board or commission of Jefferson County, provided that service on such board or commission does not require full-time service or the members on the board or commission receive no compensation for their service except for meetings attended by them.
2. Any person whose employment is temporary so long as his or her employment remains temporary. A person's employment shall be deemed to be temporary within the meaning of this subdivision if such employment is temporary as defined by the civil service system, or if the officers, board, commission, or agency employing such person certifies in writing to the pension board that the employment is temporary.
3. Any leased employee and any independent contractor.
(21) EMPLOYEE. Any person who is employed by the county or elected or appointed to a job or position with or for the county. An employee shall exclude any leased employee and any independent contractor as such terms are defined by the pension board or the civil service system. See also subdivision (12), which covers situations in which other entities may be the employer of eligible employees.
(22) EMPLOYEE CONTRIBUTION. The amount a member is required to contribute to the plan as a condition of employment and participation in the plan pursuant to Section 45-37-123.82 and any amount required to be treated as an employee contribution in accordance with Section 45-37-123.190(b), relating to transfers from § 457(b), Internal Revenue Code, plans.
(23) EMPLOYER CONTRIBUTION. The amount the county is required to contribute to the plan pursuant to Section 45-37-123.20(b) and Section 45-37-123.80(a).
(24) EXECUTIVE DIRECTOR. The individual designated by the pension board to manage the employees and day-to-day administration of the system. The individual shall not be subject to the civil service system.
(25) FISCAL YEAR. The system's accounting year of 12 months commencing on October 1 of each year and ending the following September 30.
(26) 415 COMPENSATION. With respect to any member means such member's wages as defined in § 3401(a), Internal Revenue Code, and all other payments of compensation by the county, in the course of the county's trade or business, for a calendar year ending with or within the plan year for which the county is required to furnish the member a written statement under §§ 6041(d), 6051(a)(3), and 6052, Internal Revenue Code. 415 compensation shall be determined without regard to any rules under § 3401(a), Internal Revenue Code, that limit the remuneration included in wages based on the nature or location of the employment or the services performed, such as the exception for agricultural labor in § 3401(a)(2), Internal Revenue Code. Notwithstanding the above, the determination of 415 compensation shall be made by including any elective deferral, as defined in § 402(g)(3), Internal Revenue Code, and any amount which is contributed by the county at the election of the member pursuant to a salary reduction agreement and which is not includible in the gross income of the member by reason of §§ 125, 132(f)(4), 402(e)(3), 402(h)(1)(B), 403(b), or 457(b), Internal Revenue Code, and employee contributions described in § 414(h)(2), Internal Revenue Code, that are treated as employer contributions. For this purpose, effective January 1, 1998, amounts not includible in gross income under § 125, Internal Revenue Code, shall be deemed to include any amounts not available to a member in cash in lieu of group health coverage because the member is unable to certify that the member has other health coverage, provided the county does not request or collect information regarding the member's other health coverage as part of the enrollment process for the health plan.
a. Compensation Paid After Severance from Employment. With respect to limitation years beginning on and after July 1, 2007, 415 compensation shall be adjusted for the following types of compensation paid after a member's severance from employment with the county, or any other entity that is treated as the county pursuant to § 414(b), (c), (m), or (o), Internal Revenue Code:
1. The following amounts shall be included in 415 compensation to the extent these amounts are paid by the later of two months after severance from employment or by the end of the limitation year that includes the date of such severance from employment:
(i) Regular pay. 415 compensation shall include regular pay after severance from employment if:
A. The payment is regular compensation for services during the member's regular working hours, or compensation for services outside the member's regular working hours, such as overtime or shift differential, commissions, bonuses, or other similar payments; and
B. The payment would have been paid to the member prior to a severance from employment if the member had continued in employment with the county.
(ii) Leave cashouts. 415 compensation shall include leave cashouts if those amounts would have been included in the definition of 415 compensation if they were paid prior to the member's severance from employment, and the amounts are payment for unused accrued bona fide sick, vacation, or other leave, but only if the member would have been able to use the leave if employment had continued.
(iii) Deferred compensation. 415 compensation shall include deferred compensation if the compensation would have been included in the definition of 415 compensation if it had been paid prior to the member's severance from employment, and the compensation is received pursuant to a nonqualified unfunded deferred compensation plan, but only if the payment would have been paid at the same time if the member had continued in employment with the county and only to the extent that the payment is includible in the member's gross income.
2. The following amounts shall not be included in 415 compensation:
(i) Salary continuation payments for military service participants. 415 compensation does not include payments to an individual who does not currently perform services for the county by reason of qualified military service to the extent those payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the county rather than entering qualified military service.
(ii) Salary continuation payments for disabled participants. 415 compensation does not include compensation paid to a member who is permanently and totally disabled, as defined in § 22(e)(3), Internal Revenue Code.
b. Administrative Delay or the First Few Weeks Rule. With respect to limitation years beginning on and after July 1, 2007, 415 compensation does not include amounts earned but not paid during the limitation year solely because of the timing of pay periods and pay dates.
c. Back Pay. With respect to limitation years beginning on and after July 1, 2007, payments awarded by an administrative agency or court or pursuant to a bona fide agreement by the county to compensate a member for lost wages are 415 compensation for the limitation year to which the back pay relates, but only to the extent such payments represent wages and compensation that would otherwise be included in 415 compensation.
(27) INVESTMENT MANAGER. An entity that has the power to manage, acquire, or dispose of plan assets and acknowledges fiduciary responsibility to the plan in writing. Such entity shall be a person, firm, or corporation registered as an investment adviser under the Investment Advisers Act of 1940, a bank, or an insurance company.
(28) INVOLUNTARY DEFERRED RETIREMENT BENEFIT. A benefit payable pursuant to the terms of Section 45-37-123.100(c)(3).
(29) IRC. The Internal Revenue Code of 1986, as amended or replaced from time to time.
(30) JOINT SURVIVORSHIP PENSION. Either a preretirement joint survivorship pension or a postretirement joint survivorship pension.
(31) LIFE EXPECTANCY. As defined in Section 45-37-123.106(f)(5).
(32) MEDICAL ADVISOR. The pension board's medical advisors or other appointed physicians or vocational specialists.
(33) MEMBER. Any eligible employee who, depending on the context as used throughout this plan, participates, or participated, in the plan.
(34) NONSERVICE CONNECTED DISABILITY. A total disability or partial disability while the member is employed by the county that is not a service connected disability.
(35) PAID MEMBERSHIP TIME. The time during which a member made, or shall have made, employee contributions to the system and other previous retirement systems, provided, however, that if a member, for any reason, including termination of employment, withdraws his or her employee contributions, the period during which the employee contributions are withdrawn shall be considered unpaid membership time, unless it is converted to paid membership time as provided for in Section 45-37-123.53. Paid membership time also shall include a member's absence due to qualified military service. Years of paid membership time shall be calculated in accordance with Section 45-37-123.84.
(36) PARTIAL DISABILITY. A permanent disability that is less than a total disability determined in accordance with Section 45-37-123.102(c).
(37) PENSION BOARD. The administrator of the plan, as more fully described in Subpart 2.
(38) PLAN or SYSTEM. The General Retirement System for Employees of Jefferson County, which plan or system may sue or be sued, and in such name all of its business shall be transacted.
(39) PLAN YEAR. The plan's accounting year of 12 months commencing on January 1 of each year and ending the following December 31.
(40) POSTRETIREMENT JOINT SURVIVORSHIP PENSION. The benefit described in Section 45-37-123.101.
(41) PRERETIREMENT JOINT SURVIVORSHIP PENSION. The benefit described in Section 45-37-123.103.
(42) PREVIOUS RETIREMENT SYSTEMS. The retirement systems established by Acts 1953, No. 551, 1953 Regular Session (Acts 1953, p. 766), as amended, the Employees' Retirement System of Jefferson County, and by Acts 1961, No. 843, 1961 Regular Session (Acts 1961, p. 1250), as amended, the Employees General Retirement System of Jefferson County.
(43) QUALIFIED MILITARY SERVICE. Except as otherwise subsequently provided under § 414(u), Internal Revenue Code, the performance of duty, on a voluntary or involuntary basis, in a uniformed service under competent authority, and includes active duty, active duty for training, initial active duty for training, inactive duty training, full-time national guard duty, a period for which a person is absent from a position of employment for the purpose of an examination to determine the fitness of the person to perform any such duty, and a period for which a person is absent from employment for the purpose of performing funeral honors duty.
(44) REGULAR DEFERRED RETIREMENT BENEFIT. A benefit payable pursuant to the terms of Section 45-37-123.100(c)(2).
(45) REGULATION. The income tax regulations as promulgated by the Secretary of the Treasury or a delegate of the Secretary of the Treasury, as amended from time to time.
(46) REQUIRED BEGINNING DATE. As defined in Section 45-37-123.106(f)(6).
(47) RETIRED MEMBER. An individual who currently is receiving pension benefits from the system.
(48) SERVICE CONNECTED DISABILITY. A total disability or partial disability, caused by an accident arising out of and in the course of a member's employment with the county.
(49) SERVICE RECORD. An employee's record of service upon which the pension board bases all of the member's benefit calculations, including records of the county.
(50) SICK LEAVE RETIREMENT CONVERSION. A program sponsored by the county or other entities set forth in subdivision (20) wherein a member is paid for accumulated sick leave time.
(51) SUPERANNUATION RETIREMENT BENEFIT. A benefit payable pursuant to the terms of subsection (a) of Section 45-37-123.100.
(52) SYSTEM or PLAN. The General Retirement System for Employees of Jefferson County, which system or plan may sue or be sued, and in such name all of its business shall be transacted.
(53) SPOUSE. The legal wife or husband of a member as determined in accordance with federal law.
(54) TOTAL DISABILITY. A permanent physical or mental condition of a member resulting from bodily injury, disease, or mental disorder which renders such member incapable of continuing usual and customary employment with the county. The disability of a member shall be determined by a licensed medical advisor.
(55) TRUSTEE. The pension board or the person or entity appointed by the pension board and named as trustee herein or in any separate trust forming a part of the plan, and any successors.
(56) TRUST FUND. The tax-qualified trust in which certain plan funds are held, disbursed, transferred, and invested by the trustee at the pension board's, or its designated investment manager's, discretion and in accordance with this part, the Internal Revenue Code, and other applicable laws and regulations.
(57) UNPAID MEMBERSHIP TIME.
a. Subject to paragraph d., all of the following:
1. Time during which a member was employed by the county, but the member did not make employee contributions to the system and/or other previous retirement systems.
2. Time during which a member withdrew employee contributions for any reason, including upon a termination of employment, unless this period of time is later converted to paid membership time as provided for in Section 45-37-123.53.
3. Time during which a person held an elective office or was employed in a full-time job or position in the service of any municipality, governmental agency, or subdivision or held an elective office, provided that at the time the person served with such municipality, governmental agency, or subdivision, it was subject to the countywide civil service law.
b. Unpaid membership time shall not include any of the following:
1. Service with a municipality, governmental agency, or subdivision if the employee received a pension from such municipality, governmental agency, or subdivision, on account of such service or if such service was considered in the calculation of the pension.
2. Any unpaid membership time that has been converted to paid membership time.
3. Any service in a temporary job or position, as determined by the pension board.
c. If such prior service with a municipality, governmental agency, or subdivision was not an elective office or in a classified position, such prior service shall not be treated as unpaid membership time unless such employee establishes to the satisfaction of the pension board that such service was a full-time job.
d. Only with respect to employees entering the system on or before August 16, 1996, years of unpaid membership time are used in computing accrued benefits under the plan, as are months of unpaid membership time. Months are converted into a fraction of a year as set forth in Section 45-37-123.84. Notwithstanding any provision of the plan to the contrary, unpaid membership time shall not accrue after August 16, 1996, and shall not apply to members who initially join the system, or members who rejoin the system after having withdrawn, after August 16, 1996.
(58) VESTED. The portion of a member's benefits under the plan that generally are nonforfeitable. Subject to Section 45-37-123.83, relating to failure to claim a refund of employee contributions within the five-year period, a member's benefit shall become nonforfeitable, or vested, upon the following events:
a. Partial or full termination of the plan as set forth in Section 45-37-123.170; and
b. Meeting the eligibility conditions for entitlement to a benefit under Subpart 5.
(59) WORKER'S COMPENSATION BENEFITS. Any benefit paid to a member under any worker's compensation law of the State of Alabama for any injury or disability suffered by such member while working for the county on the job or position by reason of which he or she is a member. Additionally, worker's compensation benefits are included in compensation for purposes of determining employee contributions pursuant to Section 45-37-123.82. Worker's compensation benefits are included in compensation for purposes of calculating a retirement benefit only if inclusion of such worker's compensation benefits produces a higher benefit than exclusion of such worker's compensation benefits.
(Act 2013-415, p. 1586, §2:1.1-1.59; Act 2017-266, §1; Act 2019-243, §1.)