Accounting

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  • (a) An adequate system of accounts and records shall be established and maintained for the System that will give effect to the requirements of this chapter. This System shall be integrated, to the extent possible, with the accounts, records and procedures of the employer to the end that the same shall operate most effectively and at minimum expense, and that duplication of records and accounts may be avoided.

  • All assets of the system shall be credited according to the purposes for which they are held in the following designated reserve accounts:
    • (1) Members' Contribution Reserve. The amounts contributed by the members to this System after the date of establishment together with any amounts contributed by the members to any superseded retirement fund or System which has been transferred to this System as provided in section 721 of this title, shall be credited to this reserve. An individual account shall be maintained for each member, to which shall be credited the amounts of his contributions.

      Upon the granting of a service retirement annuity, disability annuity or duty-connected death annuity the accumulated contributions to the credit of the member concerned shall be transferred from this reserve to the retirement reserve. Refund and death benefit payments representing member contributions shall be charged to this reserve.
    • (2) Employer's Contribution Reserve. The amounts contributed by the employer under the provisions hereof, for service retirement annuity, disability annuities, duty-connected death annuity and death benefits shall be credited to this reserve. All amounts transferred to this System from any superseded fund or System as provided in section 721 of this title, over and above the amounts of the member's contribution credits in such superseded fund or System, shall be credited to this reserve. Death benefit payments from employer's contributions shall be charged to this reserve.

      Upon the granting of a service retirement annuity, duty disability annuities or duty-connected death annuity, an amount representing the excess of the actuarial value of the annuity over the accumulated contributions of the member shall be transferred from this reserve to the retirement reserve. If in any year the retirement reserve is insufficient to cover the reserves for the various annuities being paid by the System, the amount of any deficiency shall be transferred from this reserve to the retirement reserve.
    • (3) Retirement Reserve. Upon the granting of a service retirement annuity, disability annuities or duty-connected death annuity, the accumulated contributions of the member and an amount representing the excess of the actuarial value of the annuity over such accumulated contributions, shall be transferred to this reserve from the members' contribution reserve and employer's contribution reserve, respectively. All payments on account of any such annuity and death benefit payment on account of death of a retired member, shall be charged to this reserve. All payments on account of pensions and benefits granted by the superseded retirement fund, as provided in section 721 of this title shall be charged to this reserve, and such pensions and benefits shall be an obligation of this reserve.

      All income from investments including gains on investment transactions shall be credited to this reserve. All losses on investment shall be charged to this reserve. Any excess balance in this reserve, as determined by actuarial valuation as of the close of any fiscal year, shall be applied to reduce the employer's contributions for membership service for the fiscal year next following the date of such valuation by an adjustment in the employer's contribution rate. Any deficiency in this reserve shall be removed by an increase in the amount of employer's contribution rate and shall be removed by a transfer from the employer's contribution reserve.
    • (4) Administration Expense Account. All amounts contributed by the employer and employee for the expense of administration of the System shall be credited to this account. All administrative expenditure shall be charged to this account. The Legislature shall approve the annual operating budgets for the system, and shall provide for the employer's contribution to the system in the yearly budget.

  • (b) The System shall send, each member and annuitant by U.S. mail an annual statement of the benefits or contributions paid by the employer and the employee not later than February 1 of every year.


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