§ 5-1-254. SAME—PENSION ACCUMULATION FUND.

(a)

The Pension Accumulation Fund shall be the Fund in which shall be accumulated all reserves for the payment of all pensions and other benefits payable from contributions made by the employer and amounts transferred from the Annuity Savings Fund and from which shall be paid all benefits payable under the System other than those payable from the Annuity Savings Fund. Contributions to and payments from the Pension Accumulation Fund shall be made as provided in this section.

(b)

On account of all members there shall be paid annually into the Pension Accumulation Fund by the employer for each fiscal year an amount equal to the sum of the employer normal contribution, the employer administrative expense contribution, and the employer accrued liability contribution for such fiscal year. Each of the components of the employer contribution shall be expressed as a rate equal to a percentage of the contribution year appropriation payroll for each contribution year. The contribution year appropriation payroll and the employer administrative expense contribution for a contribution year are to be estimated by the system. The employer accrued liability contribution rate or rates and the employer normal rate shall be determined on the basis of the liabilities of the Retirement System as shown by the actuarial valuation and the contribution rates shall be effective for a contribution year - the fiscal year that next follows the promulgation of such rates by the Board of Trustees.

(c)

"Employer normal contribution" on the basis of regular interest, such mortality and other tables and such actuarial cost method as shall be adopted by the Board of Trustees, the actuary engaged by the Board to make the valuation required by this title shall determine the percentage of the total annual earnable compensation of all members that, if contributed on the valuation date, would be sufficient to provide for that portion of the actuarial present value of pension plan benefits which is allocated to the fiscal year following the valuation date by the actuarial cost method. The percentage so determined is the total normal rate. The employer normal rate equals the total normal rate reduced, but not below zero, by the weighted average of the member regular contribution rates and such other member rates as set forth in this title (but excluding any member accrued liability rate). The employer normal contribution for the contribution year equals the employer normal rate multiplied by the contribution year appropriation payroll. The employer normal rate shall be redetermined by the actuary after each annual actuarial valuation.

(d)

Based on reasonable assumptions, the System shall prepare estimates of an amount equal to the system's expected administrative expenses for a contribution year, and such contribution year appropriation payroll - the total earnable compensation expected to be paid to all members during such contribution year. The employer administrative expense rate for a contribution year equals the employer administrative expense contribution divided by the contribution year appropriation payroll.

(e)

"Employer accrued liability contribution" on the basis of regular interest, such mortality and other tables and such actuarial cost method as shall be adopted by the Board of Trustees, the actuary engaged by the Board to make the valuation required by this title, shall determine at the time of the annual actuarial valuation, the accrued liability of the plan - that portion of the actuarial present value of pension plan benefits and expenses which is not provided for by future employer normal contributions, member contributions (exclusive of any member accrued liability contributions), and administrative expense contributions. The unfunded accrued liability of the plan shall equal the accrued liability minus the actuarial value of assets. (The unfunded accrued liability will be negative if the actuarial value of assets exceeds the accrued liability.) The employer unfunded accrued liability equals the unfunded accrued liability reduced by the amount of the member unfunded accrued liability, if any. (A member unfunded accrued liability will exist if members are making accrued liability contributions.) The employer accrued liability contribution equals the amortization payments to be made by the employer for the contribution year on account of the employer unfunded accrued liability. The amortization payment must be determined in a manner in conformity with generally accepted actuarial principles and practices for measuring pension obligations. If the employer unfunded accrued liability is negative, the amortization payment will also be negative - i.e., it will act as a credit against the amount of the employer normal contribution owed for the contribution year. However, if the employer unfunded accrued liability is negative, the amortization payment shall be limited so that the sum of the employer normal contribution and the amortization payment is not less than zero. The employer accrued liability contribution for the contribution year shall equal the amount of such amortization payment. The employer accrued liability rate shall equal the employer accrued liability contribution divided by the contribution year appropriation payroll. Notwithstanding anything in this subsection to the contrary, and subject to § 5-1-203(5)(vii) of this subtitle, where applicable, the Board of Trustees shall have the discretion to require special accrued liability contributions for a separate unit or units of employees participating in the system who have been accorded special treatment either with respect to their initial participation in the system or an improvement in the benefit provided by the system. The accrued liability contributions shall be reviewed and revised, if necessary, by the actuary after each annual actuarial valuation.

(f)

All benefits payable under the system other than those payable from the Annuity Savings Fund shall be payable from the Pension Accumulation Fund. Should a beneficiary be restored to membership, the beneficiary's annuity reserve shall be transferred from the Pension Accumulation Fund to the Annuity Savings Fund and credited to the beneficiary's individual account therein.

(g)

The system shall maintain a special subfund within the pension accumulation fund known as the Postretirement Increase Fund, in which shall be accumulated all investment income in excess of valuation requirements, provided that the amount accumulated in such subfund shall in no event exceed two (2) times the amount of the reserves necessary to provide a three (3) percent increase to all beneficiaries then covered under § 5-1-235 of this subtitle. Upon the granting of increases in retirement allowances as provided under § 5-1-235 of this subtitle, the necessary reserves to provide such increases shall be transferred from the special subfund to the regular Pension Accumulation Fund.

(1988 Code, § 23-92) (Bill No. 32-03, § 1, 6-30-2002, 7-1-2004; Bill No. 30-10, § 2, 7-1-2010)