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5.09.080 Distribution of Benefits Generally.

(Amended by Ordinance Nos. 177367, 179417, 182168, 185341, 185726, 186746 and 187574, effective February 10, 2016.)

A.  With respect to distributions under the Plan made for calendar years beginning on or after January 1, 2002, the Plan will apply the minimum distribution requirements of IRC Section 401(a)(9) in accordance with the regulations under IRC Section 401(a)(9) that were proposed on January 17, 2001, notwithstanding any provision of the Plan to the contrary.  This amendment shall continue in effect until the end of the last calendar year beginning before the effective date of final regulations under IRC Section 401(a)(9) or such other date as may be specified in guidance published by the Internal Revenue Service.

B.  Distribution of a Participant’s Account to a Participant or a Beneficiary shall be made in accordance with the manner and method of payments selected in the Withdrawal Agreement, which election may be changed by a Participant or Beneficiary, subject to the restrictions of the Plan.

C.  At the time distribution to a Participant commences, such distribution shall be made in a manner in which the Participant will receive a minimum portion of the amount payable with respect to the Participant during the life expectancy of the Participant (as determined as of the commencement of the distribution). Therefore, distributions to a Participant must be made in accordance with the distribution tables promulgated by the Secretary of the Treasury pursuant to IRC Section 457(d)(2)(B)(i)(I).

D.  A minimum amount shall be distributed during each calendar year. The required minimum distribution for each calendar year shall be determined by dividing the Account balance (as determined under Section 1.104(a)(9)-1, Q&A F-5 of the proposed Federal income tax regulations or any successor to such regulations) by the lesser of the applicable life expectancy (as determined under Q&A F-1A(d) of Section 1.104(a)(9)-1 of the proposed Federal income tax regulations or any successor to such regulations) or the applicable divisor (as determined under Q&A-4 of Section 1.104(a)(9)-2 of the proposed Federal income tax regulations or any successor to such regulations).

E.  Notwithstanding the provisions of Subsection D., distribution of a Participant’s Account may be made through an annuity contract that is purchased from an insurance company, with funds from the Participant’s Account.  Any annuity contract so purchased must satisfy the applicable minimum distribution requirements of Section 1.401(a)(9)-1 of the proposed Federal income tax regulations (and any successor regulations) and the applicable minimum distribution incidental benefit requirement of Section 1.401(a)(9)-2 of the Federal income tax regulations (and any successor regulations).  In the event such an annuity contract is purchased, the amount of the annuity payments shall be determined under the annuity contract.

F.  In no event shall the distribution of a Participant’s Account commence earlier than:

1.  the calendar year in which the Participant attains his or her Normal Retirement Age as defined in Subsection 5.09.010 K.,

2.  the Participant’s Severance from Employment, or

3.  when the Plan Administrator or designee approves a distribution pursuant to an Unforeseeable Emergency of a Participant.

G.  Distribution of a Participant’s Account to a Participant may commence no later than April 1 of the calendar year following the calendar year in which the Participant attains age 70-1/2 or actually severs from employment.

H.  Notwithstanding Subsection 5.09.080 J., distributions of a Participant’s Account shall cease if the Participant is re-employed by the City.

I.  All distributions hereunder shall be made in accordance with the regulations under IRC Section 401(a)(9), including Section 1.401(a)(9)-2 of the Federal income tax regulations and such other provisions as are prescribed by the Commissioner of Internal Revenue. Accordingly, no distribution shall be made under any option that does not satisfy IRC Section 401(a)(9), including Section 401(a)(9)(G).

J.  Participants may elect changes to election dates and/or payment amounts, except for selections made pursuant to Subsection 5.09.070 A.5.

K.  Voluntary In-Service Distribution: Notwithstanding anything in this chapter to the contrary, a Participant who is an active employee of the City shall receive a distribution of the total amount payable to the Participant under the Plan if the following requirements are met:

1.  the total amount payable to the Participant under the Plan does not exceed $5,000 (or the dollar limit under IRC Section 411(a)(11), if greater),

2.  the Participant has not previously received an in-service distribution of the total amount payable to the Participant under the Plan pursuant to Subsection 5.09.080 I.

3.  no amount has been deferred under the Plan with respect to the Participant during the two-year period ending on the date of the in-service distribution; and

4.  the Participant elects to receive the distribution.

L.  Distribution of a Participant's Account shall commence no earlier than Severance from Employment.