hb 1310

CHAPTER 194

HB 1310 - FINAL VERSION

AN ACT relative to the city of Manchester's contributory retirement system.

SPONSORS: Rep. Buckley, Hills 44; Rep. Pepino, Hills 40; Rep. Messier, Hills 46; Rep. Baroody, Hills 42

This bill revises the contributory retirement system of the city of Manchester originally established in 1973, 218.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

AN ACT relative to the city of Manchester's contributory retirement system.

Be it Enacted by the Senate and House of Representatives in General Court convened:

194:1 Permanent Retirement System for Employees of the City of Manchester. 1973, 218 as amended by 1976, 24 and 1999, 103, is repealed and reenacted to read as follows:

218:1 Short Title. This act shall be known as the "Manchester Employees' Contributory Retirement System Act."

218:1-a Purpose of Act. The purpose of this act is to amend and restate in its entirety the June 14, 1973 law, known as chapter 218 of the laws of 1973 which established the Manchester employees' contributory retirement system providing retirement benefits to employees of the city of Manchester, New Hampshire, as amended in 1976 by chapter 24, and in 1999 by chapter 103.

218:2 Transfer Of Members, Retirement Fund, And Benefits. Except as provided herein, the passage of this act shall not terminate or modify the benefits accrued by existing members of the Manchester employees' contributory retirement system under 1973, 218 as amended by 1976, 24 and 1999, 103.

218:3 Internal Revenue Code Qualification. The retirement system established in this act is intended to create a tax-qualified governmental retirement plan under sections 401(a) and 414(d) of the Code as amended.

218:4 Definitions. The following terms as used in this act shall have the following meanings unless a different meaning is plainly indicated by the context:

I. "Annualized disability earnings" means the earnings of the member for all weeks of service until the date of disability divided by the number of weeks of service, multiplied by 52.

II. "Beneficiary" means the person to whom the share of a deceased member's benefit is payable, subject to the provisions of section 19.

III. "Break in service" means any period of time in which an employee is not credited with employment with the city.

IV. "Buyback interest" means the rate of interest determined from time to time by the retirement board compounded annually on the last day of the calendar year or to the date of payment by the member.

VII. "Disabled member" means a member who is receiving disability benefits under the provisions of section 15.

VIII. "Earnings" means the total salary or wages of a member for the member's employment with the city, including all grants and allowances for maintenance at such figures as may be determined by the retirement board. For members whose retirement date is after July 1, 1996, and members who on July 1, 1996 and thereafter terminated city employment and elected to defer their benefits until their normal retirement date but had not yet reached their normal retirement date, earnings shall include unused sick time included in the member's salary or wages at the member's date of termination of city employment. For members whose retirement date is after December 1, 1997, and members who on December 1, 1997 and thereafter terminated city employment and elected to defer their benefits until their normal retirement date but had not yet reached their normal retirement date, earnings shall include unused vacation time included in the member's salary or wages at their date of termination of city employment.

X. "Final average earnings" means the greater of (a) the average annual earnings received by a member during the 3 highest calendar years during the 10 years preceding the member's normal retirement date, date of actual retirement or date of termination of employment, or (b) the average annual earnings received by a member during the highest 36 consecutive calendar months during the 10 years preceding the member's normal retirement date, date of actual retirement or date of termination of employment. The 3 highest years or highest 36 consecutive months shall be selected by the member, it being the intent and purpose of this method of computing final average earnings to afford the highest benefits to the member. If a member has not worked 10 years at the time of the commencement of benefits, the benefit shall be based upon the earnings during the greater of the highest 36 consecutive months or the 3 highest calendar years. This section shall be effective for members whose retirement date is after January 1, 2003.

XI. "Member" means any employee of the city who becomes covered under the retirement system as described in this act.

XII. "Normal retirement benefit" means the retirement benefit as described in section 12 of the act.

XIII. "Normal retirement date" means the first day of the month coinciding with or next following a member's sixty-second birthday.

XIV. "Regular interest" means the interest at the rate determined from time to time by the retirement board compounded annually on the last day of the calendar year or to the date of payment in the case of a refund of contributions.

XV. "Retirement board" and "the board" means the board of trustees created under this act responsible for the administration of the Manchester employees' contributory retirement system and such other duties as set forth herein.

XVI. "Retirement date" means the date the payment of retirement benefits commences in accordance with section 12, paragraph II of this act.

XVII. "Retirement fund" means the trust established and funded for the payment of retirement benefits to city employees pursuant to this act.

XVIII. "Retirement system" means the plan for providing retirement benefits to city employees as established by this act.

XX. "Service buyback" means the purchase of service credit under the retirement system.

I. Management of the retirement system shall be vested in the retirement board consisting of 7 members, composed as follows: the city finance director; a person appointed by the board of aldermen, 2 citizens of the city, one appointed by the mayor, one elected by the employee members, neither of whom shall be an officer or employee of the city or a member of any commission of the city; 2 members who are employees of the city, who are members of the retirement system and who shall be elected by the members. All members, including retired members and members with deferred benefits shall be permitted to vote in the elections for the board positions. Spouses of deceased members shall not be permitted to vote in the elections for the board positions. The mayor shall be an ex-officio member of the board who shall have a vote only to break a tie.

II. The finance director shall serve as a member of the retirement board during his or her term of office. The mayor shall serve as a member of the retirement board during his or her term of office. The member of the retirement board appointed by the board of aldermen shall serve a term of one year from the effective date of this act, provided his or her successors shall be appointed for 3-year terms and the term of office of each member shall continue until his or her successor is appointed and qualified. The citizen appointed by the mayor shall serve a term of 2 years from the effective date of this act, provided his or her successors shall be appointed for terms of 3 years and the term of office of each such member of the board shall continue until his or her successor is appointed and qualified. The 2 members of the board who are employees of the city shall be elected for terms of one year and 2 years respectively from the effective date of this act, provided their respective successors shall be elected for 3-year terms and the term of each office of each such member of the board shall continue until his or her successor is appointed and qualified. The citizen member of the board elected by the employees shall be elected for a term of 3 years from the effective date of this act, provided that his or her successors shall be elected for 3-year terms and the term of office for such member of the board shall continue until his or her successor is elected and qualified. The members of the retirement board shall serve without compensation. Employees of the retirement system are prohibited from serving on the retirement board.

III. A majority of voting members of the retirement board (4 members) shall constitute a quorum for the transaction of retirement board business; however, the mayor, as an ex-officio non-voting member of the retirement board shall not be counted towards such quorum. Retirement board meetings cannot begin, nor can business be transacted, until the chairperson ascertains a quorum is present. For the purposes of a retirement board meeting, until a quorum is present, no debate or motion shall be in order except to recess to locate absent members of the board. All matters coming before any meeting of the retirement board or its committees shall be decided by a majority of those retirement board members present and entitled to vote, a quorum being ascertained. Proxies shall not be permitted for voting or for obtaining a quorum.

IV. In the event of a vacancy on the retirement board, such vacancy shall be filled in the same manner as the member to be succeeded was appointed or elected and for the remainder of the unexpired term. In no event shall any person remain a member of the retirement board if he or she is no longer a member of the body from which he or she was appointed or elected.

I. Contributions received by the retirement system pursuant to this act shall be deposited into the retirement fund. The finance director of the city shall be the treasurer of the retirement fund which shall be a trust. The retirement board shall be trustee of the retirement fund and shall have the obligation of a fiduciary of the retirement system and its members and beneficiaries. In the fulfillment of its duties and responsibilities hereunder, the retirement board shall act solely in the interests of the retirement system, the members, and the beneficiaries and with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. As trustee, the retirement board shall hold legal title to all securities and assets of the retirement system and shall have full control and management of them with the power to invest and reinvest the same in accordance with the terms, conditions, limitations, and restrictions imposed by the general statutes of the state of New Hampshire governing the investment of trust funds. In addition to those powers, the retirement board, as trustee, shall also have the power:

(a) To collect and receive any and all monies and other property due and to give full discharge and acquittance therefor;

(b) To appoint advisory committees to aid the retirement board in its duties under this section or to delegate to any corporate fiduciary or an insurance company within or without the state who may or may not be the custodian of stocks and securities, the power and discretion to make decisions with regard to the purchase or sale of any legal object of investment and to take any action necessary to affect decisions by or on behalf of the retirement system with the same legal effect as if performed by the retirement board;

(d) To settle or compromise any claims, debts or damages due or owing to or from the retirement system, and to commence or defend suits or legal proceedings whenever, in its judgment, any interest of the retirement system so requires employing suitable agents and counsel for this purpose and paying their reasonable expenses and compensation;

(e) To maintain records of receipts and disbursements and to pay benefits required under the retirement system to eligible members, or, in the event of their death, to their beneficiaries;

(f) To generally do all other things necessary and proper to carry out the purposes of this act.

II. The retirement board shall take all actions necessary for the proper administration of the retirement system, including operating an office in a location convenient and accessible to members, and hiring, dismissing, and determining the compensation of employees. The retirement board shall engage expert actuarial, auditing, and other professional service providers when, in the judgement of the board, it is advisable. The retirement board shall submit an annual report and audited financial statements to the city board of mayor and aldermen.

III. The retirement board shall administer the retirement system in accordance with this act and shall have discretionary and final authority to determine all questions concerning eligibility and benefits, to interpret and construe all terms of the act, including any uncertain terms, and to resolve any disputes arising from, and all questions concerning, administration of the retirement system. Any determination made by the retirement board shall be given deference, if it is subject to judicial review, and shall be overturned only if it is arbitrary or capricious. No action taken by the retirement board under this act shall be construed or relied upon as precedent for similar action under similar circumstances.

IV. The retirement board's duties shall also include the general administration of the retirement system, including, but not limited to, the following:

(a) To compute, determine, and certify the amount and kind of benefits to which any member shall be entitled hereunder;

(e) To compute and certify to the city from time to time the sums of money necessary to be contributed to the retirement system;

(f) To assist any member regarding that member's rights, benefits, or elections available under the retirement system.

V. The retirement board shall produce a summary plan description, bylaws, and administrative rules which are not inconsistent with this act. The summary plan description shall be a summary of the administrative rules and important provisions of this act, and shall be distributed to new members. Upon any material amendment of the act or administrative rules a summary of the changes or, at the discretion of the retirement board, a new summary plan description shall be distributed to all members. The administrative rules shall explain the requirements of this act, including the time frames and procedures that members must follow in placing claims for retirement benefits. The bylaws shall provide rules to govern the meetings held by the retirement board and shall contain a policy to prevent apparent or actual conflicts of interest. The administrative rules and bylaws shall be available for review by members at the retirement system's office during normal business hours.

VI. In the event any claim, suit, or proceeding brought regarding the retirement system, to which any member of the retirement board or retirement system employees are made a party, is resolved in favor of the retirement system, board member, or retirement system employee, the board member or retirement system employee shall be entitled to be reimbursed from the retirement fund for any and all costs, attorney's fees, and other reasonable expenses pertaining to said claim, suit, or proceeding personally incurred by them.

VII. The retirement system shall indemnify the members of the retirement board and employees of the retirement system for liability they incur in administering the retirement system and managing the retirement fund. The opinion of the retirement board's counsel shall be full and complete protection with respect to any action taken by the retirement board, or any member thereof, if taken in good faith and in accordance with such opinion. Provided, however, the retirement system shall not indemnify the retirement board or any members thereof, for fraud, willful or deliberate misconduct, or gross negligence.

VIII. The retirement board shall charge all administrative costs to the retirement fund. No city funds shall be appropriated for retirement system administrative costs. Such administrative costs include any expenses incident to administering the retirement system including, but not limited to, personnel expenses, rental and/or facility charges, office supplies and equipment, fees of accountants, actuaries, counsel, investment managers, and other professionals, specialists and their agents, as well as other costs of administering the retirement system.

I. All full-time and permanent part-time employees of the city, including elected and appointed officials of the city, shall participate in the retirement system and receive benefits as provided by the act. Participation in the retirement system shall be a condition of employment with the city. The following employees of the city shall not be eligible to participate in the retirement system:

(b) Members of boards and commissions who are not part-time or full-time employees of the city;

(c) Members of the fire and police departments who are eligible to participate in a state-administered retirement system; and

(d) Persons who are eligible to participate in the New Hampshire retirement system.

II. Temporary employees of the city who become permanent employees without incurring a break in service are eligible to participate in the retirement system as of their original date of hire if they complete a service buyback.

III. Any eligible employee in the employment of the city on January 1, 1974, who elected not to participate shall only be admitted to the retirement system upon completion of an application for participation, majority consent of the retirement board, passing a prescribed physical examination, and completion of a service buyback.

218:8 Contributions by the City. The city shall appropriate annually to the retirement board the amounts required to fund the benefits set forth in the act as determined by the retirement board on the basis of an actuary's valuation, which shall be based on sound actuarial funding methods, assumptions, and principles.

I. The rate of contributions by each member participating in the retirement system shall be 3.75 percent of that portion of earnings received during each calendar year or portion thereof.

II. The earnings of each member participating in the retirement system shall be reduced by the contribution rate set forth in this section. Such contribution shall be transmitted immediately to the retirement board.

I. Service rendered for the full normal working time in a period of 12 consecutive months shall entitle a member to one year of service credit. Time spent as a member of any of the various city boards, or in any other capacity rendering incidental employment to the city, shall not be counted as service for the purposes of this act. Absence from employment on account of active duty with the armed forces of the United States in time of emergency or war, or as directed by selective service or to meet selective service requirements, or as a member of the national guard, or organized reserves, to meet its requirements, shall be counted as continuous employment with the city, provided, that the employee returns directly to active employment with the city within 90 days after he or she becomes eligible for release from such active duty. Any such period of absence shall not be counted as service unless the employee completes a service buyback.

II. Absence from employment on account of a leave of absence authorized by the city shall not be considered a termination of employment, provided that the employee returns to service with the city at the end of such leave of absence. Any such period of absence shall not be counted as service unless the employee completes a service buyback.

III. A member who ceases to be a member, withdraws his or her member contributions pursuant to section 11 of this act, and later becomes a member again, may make a request after the member's return to city employment for service buyback of prior service credit for the previous time served as a member. No benefits other than the right to withdraw member contributions pursuant to section 11 of this act shall accrue with respect to such previous period of service until the member shall have completed 5 years of continuous service in the current period of employment. If a service buyback is not made, the member's benefit shall be based solely on the member's years of service and final average earnings after the break in service.

IV. A member may also make a service buyback request to receive prior service credit for a period prior to becoming a member during which the member was employed by the city in a temporary position or out on worker's compensation, leave of absence, or engaged in CETA, model city program, or any other capacity the retirement board determines should warrant service buyback. A service buyback for temporary service may only be made if the member became a permanent city employee without incurring a break in service. A service buyback is also available if, under the prior provisions of this act allowing employees to waive participation, an employee elected not to participate in the retirement system when hired and otherwise satisfies the requirements of section 7 of the act.

V. The retirement system shall enact rules for the administration of service buybacks. Buyback interest will be applied to the purchase of prior service credit. If a member does not purchase all available prior service credit, the service credit purchase must begin on the latest date of service available. Members are required to submit proof of employment in order to substantiate prior service.

VI. Upon a request for service buyback, the retirement board shall determine the cost of the requested service buyback, which amount shall include the contributions the member would have been required to make plus buyback interest, and provide a written statement to the member. The member shall pay all amounts related to the service buyback in one lump sum.

VII. Effective December 12, 1994, contributions, benefits, and service credit with respect to qualified military service shall be provided in accordance with section 414(u) of the Code notwithstanding any provision of this chapter to the contrary.

I. Any member whose employment is terminated prior to the completion of 5 years of service and who is not entitled to a disability retirement pension shall receive a refund of his or her contributions together with regular interest thereon to the date of payment. Such refund shall be in lieu of all other rights and benefits payable to the member under this act.

II. Any member whose employment is terminated prior to normal retirement date and after the completion of at least 5 years of service and who is not entitled to an early retirement pension or a disability retirement pension, and who does not elect to receive a cash refund of the member's contribution together with regular interest, will be entitled to receive, commencing on the normal retirement date, an annual pension computed in accordance with the provisions of section 12 of this act based on the member's total amount of service.

III. A member who is entitled to a deferred vested pension in accordance with the provisions of paragraph II of this section may, in lieu of all other rights and benefits under this plan, elect at any time prior to the member's retirement date to receive a cash refund of the member's contribution together with regular interest thereon to the date of payment.

I. Any member who either has attained the age of 62 years or having been in the service of the city on January 1, 1974, has completed at least 20 years of service, shall be eligible for a normal retirement benefit under the provisions of this act. Any such member may retire by filing with the retirement board a written statement duly attested setting forth at what time subsequent to the date of filing thereof, the member desires to be retired, or the retirement board may, at its option, retire any such eligible member, furnishing written notice thereof at least 60 calendar days in advance of the specified date of such retirement.

II. The payment of retirement benefits to any member who is eligible to receive retirement benefits under any provision of this act, and who has filed all election forms with the retirement system, shall become effective the first day of the month following termination of employment pending approval by the retirement board. No changes to benefit elections are permitted after the commencement of the payment of benefits.

III. The retirement system shall not pay retirement or disability benefits to city employees who again become eligible to participate in the retirement system under the act. A member shall notify the retirement system of the member's rehire immediately. Upon rehire after a period of termination, all disbursements under the plan to that member shall cease and the member shall resume making contributions to the retirement fund as of the first pay period following the member's rehire. Rehired members shall have their benefits determined in accordance with section 13 of this act.

IV. Notwithstanding any provision of this act, the maximum pension payment payable to any member or beneficiary shall be limited to such extent as may be necessary to comply with the requirements of sections 401(a)(16), 401(a)(17) and 415 of the Code. The retirement benefits payable hereunder shall be made in the form, at such time and otherwise in compliance with the distribution and rollover requirements of sections 402(c), 401(a)(9), and 401(a)(31) of the Code.

V. Members who qualify for a normal retirement benefit shall receive an annual pension payable during the member's lifetime in an amount equal to the sum of:

(a) One and 1/2 percent of the member's final average earnings multiplied by the number of years, including the fractions of years represented by full months, of service completed prior to January 1, 1999; plus

(b) Two percent of the member's final average earnings multiplied by the number of years, including the fractions of years represented by full months, of service completed after December 31, 1998.

However, in the case of a member who both was in the employ of the city on January 1, 1974 and has completed not less than 20 years of service at the time of retirement, the annual pension payable during the member's lifetime shall be equal to the greater of the sum of the amounts determined in accordance with (a) and (b) of this paragraph, or 50 percent of final average earnings.

I. If a formerly disabled member or any other member who has commenced receiving benefits from the retirement system again becomes eligible to participate, the member's benefits shall cease. The member shall resume making contributions to the retirement fund and the member shall become eligible to receive a normal retirement benefit determined in accordance with this section.

II. A member whose benefit is governed by this section shall receive a normal retirement benefit equal to the sum of (a) the benefit calculated based on years of service and final average earnings prior to the break in service and (b) the benefit calculated based on years of service and final average earnings after the break in service. If a member has less than 3 years of service after the break in service, the member's benefit after the break in service shall be based upon the earnings of the member for all weeks of service until the retirement date, divided by the number of weeks of service and multiplied by 52.

I. Each member whose age plus years of service equals or exceeds 80 may have the option, to be exercised by a written notice to the retirement board, to retire at any time thereafter, prior to the member's normal retirement date. The amount of retirement benefits payable to such retired member shall be computed as provided in section 12 of this act, except that the date of such early retirement shall be used in determining the member's service. If such retirement benefit is to commence prior to such member's normal retirement date, the retirement benefit shall be reduced in an amount determined by the actuary in accordance with accepted actuarial practice.

II. The contingent annuitant and 10-year certain options provided for in sections 17 and 18 of this act may be elected by a member who elects to retire early under this section, in which case the term "retirement date" shall be deemed to mean early retirement date wherever applicable in sections 17 and 18 of this act.

I. Any member of the retirement system who, after 15 years of continuous service as an employee of the city, shall become totally and permanently disabled such that the member is incapable of performing the essential functions of his or her position prior to such disability, may be retired for disability according to the provisions of this act. The determination as to total and permanent disability shall be made by the retirement board upon review of an application for disability benefits submitted by the member and consultation with at least 2 impartial physicians selected by the retirement board who shall examine the member and submit written reports to the retirement board.

II. Members who retire for disability under this act shall be entitled to an annual disability benefit payable until the earlier of the termination of such disability or the member's death, computed on the basis of service completed prior to the date of disability in an amount equal to the sum of:

(b) Two percent of the member's final average earnings multiplied by the number of years, including the fractions of years represented by full months, of service completed after December 31, 1998.

The disabled member may also receive his or her disability benefit in the form of a contingent annuity as described in section 17.

III. If such total disability is shown, to the satisfaction of the retirement board, to have been sustained during the performance of duties pertaining to the member's employment by the city, the member shall be entitled to retirement for disability irrespective of the duration of employment. In order for a member to receive disability benefits under this section, the member shall submit an application for disability benefits within 60 days of termination of employment. However, any member receiving a disability benefit on account of total and permanent disability sustained during the performance of duties pertaining to employment by the city, as provided herein, shall receive a benefit equal to the greater of the sum of the amounts determined in accordance with (a) and (b) of paragraph II, or 50 percent of final average earnings. If a member has less than 3 years of service at the time of becoming totally disabled in the performance of duties pertaining to the member's employment by the city, the member's pension shall be based upon the member's annualized disability earnings. The disabled member may also receive his or her disability benefit in the form of a contingent annuity as described in section 17.

IV. At least once each year following the retirement of a member with a disability retirement pension and prior to the member's normal retirement date, the retirement board may require such retiree to undergo a medical examination to be made by or under the direction of a physician or physicians designated by the retirement board. Should any disabled member refuse to submit to such medical examination in any such period of the member's disability retirement, the disability retirement pension shall be discontinued by the retirement board until the withdrawal of the refusal. If the refusal continues for one year, all the member's rights in and to a disability retirement pension shall be revoked by the retirement board. If, upon such medical examination, the physician or physicians certify to the retirement board that the disabled member is physically and mentally able and capable of resuming employment with the city, the member shall be restored to city employment in either the same position previously held or a position comparable in duties, responsibilities and compensation and the member's disability retirement pension shall be terminated. If the member, after being declared physically and mentally capable of resuming employment refuses an offer of employment by the city in the member's previous position or a comparable position, the member's disability benefit shall be terminated.

V. Each disabled member shall, until his or her normal retirement date, submit a report each year to the retirement board indicating earnings from employment. If the retirement board finds that any disabled member is engaged in any substantial gainful employment other than for the primary purpose of rehabilitation, the member's disability benefit shall be reduced if such gainful occupation pays more than the difference between the member's annual disability benefit and final average earnings, after making allowance for changes in the cost of living as approved by the board. The amount of reduction shall be equal to one dollar of benefits for each 2 dollars of employment earnings in excess of the difference between the member's final average earnings (after making allowance for changes in the cost of living) and the annual disability benefit. The board shall have the right to suspend payments of a permanent disability pension if the disabled person fails to report earned income. Such suspension shall be for the period during which there is no satisfactory report, with restoration of benefits upon acceptance of such report, or until the member's normal retirement date, whichever occurs first.

VI. A member's disability retirement benefit shall be reduced by any amounts which may be paid or payable to, or on behalf of, any member or retired member for the same disability under the provisions of any city-funded workers' compensation or similar plan, except that any city employee who is receiving both disability retirement benefits and workers' compensation benefits as of January 1, 1986, shall not be affected.

I. In the event of a member's death prior to the member's retirement date and at a time when the member would otherwise have been eligible to begin receiving retirement benefits, retirement benefits shall be paid to the member's spouse for life, or, if there is no spouse, to the member's dependent children until every child dies or reaches his or her twenty-fifth birthday, as actuarially computed according to the member's length of service and the reduction in benefit payments computed for a 100 percent contingent annuitant option and for early retirement, if applicable. If the member dies without a spouse or children, the member's beneficiary shall receive a cash payment of the member's contributions together with regular interest thereon to the date of payment. If the member has not designated a beneficiary, the member's estate shall receive a cash payment of the member's contributions together with regular interest thereon to the date of the payment.

II. In the event of a member's death prior to the member's retirement date and at a time when the member would not have been eligible to begin receiving retirement benefits, the member's beneficiary shall receive a cash payment of the member's contributions together with regular interest thereon to the date of payment. If the member has not designated a beneficiary, the member's estate shall receive a cash payment of the member's contributions together with regular interest thereon to the date of the payment.

III. If a member dies after benefits have commenced but before the member receives benefits at least equal to his or her accumulated contributions as of the retirement date, the retirement board shall pay the remaining contributions to the member's beneficiary. If there is no named beneficiary, the remaining contributions shall be paid to the member's estate. If a member has elected the contingent annuitant option and the member and the contingent annuitant both die before receiving benefits at least equal to the member's accumulated contributions as of the member's effective date of retirement, the retirement board shall pay the remaining contributions to the member's beneficiary. If there is no named beneficiary, the remaining contributions shall be paid to the estate of the member.

IV. In the event a benefit payment is to be made to a minor beneficiary, then such payment shall be made to the minor's legal guardian, or if none, to a parent of such minor or a responsible adult with whom the beneficiary resides, or to the custodian for such minor under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted by the laws of the state in which the beneficiary resides. Such a payment to the legal guardian, custodian, responsible adult, or parent of a minor beneficiary shall fully discharge the retirement board from further liability on account thereof.

I. Instead of the normal form of monthly retirement benefit provided under section 12 of this act, a member may, prior to his or her retirement date, elect a contingent annuitant option providing, if the member does not die before his or her retirement date, for actuarially reduced monthly retirement benefits payable during his or her lifetime after retirement and for the continuance of such payments, or a part of them specified by the member, to such contingent annuitant for his or her life after the death of a retired member. Such election may be made by a member at any time prior to his or her retirement date and may not be changed after his or her retirement date. The death of the contingent annuitant at any time prior to the member's retirement date shall automatically revoke such election; and further provided that if the contingent annuitant is the spouse of the member, a divorce granted to either spouse at any time prior to the member's retirement date shall automatically revoke such election.

II. If a member who has elected this option dies before his or her retirement date, no benefits shall be payable to the contingent annuitant under this option. In such circumstances, benefits, if any, are to be paid in accordance with sections 11 and 16 of this act. If the member dies after his or her retirement date, the contingent annuitant shall receive for life, commencing on the first day of the calendar month coinciding with or next following the retired member's death, the benefits specified by the retired member for the contingent annuitant.

III. If the contingent annuitant dies before the member's retirement date, the monthly retirement benefit normally provided under this act shall be payable to the retired member as if the option had not been elected. If the contingent annuitant dies after the member's retirement date, the amount of the payments which the retired member is then receiving or is entitled to receive will at that time (with no provisions for retroactive payments) revert back to what it would have been at the member's retirement date if the option had not been elected and will cease upon the retired member's death.

IV. Instead of the normal form of disability benefit provided under section 15 of this act, a disabled member may, prior to the start of disability benefits, elect a contingent annuitant option providing for actuarially reduced monthly disability benefits payable during his or her lifetime and for the continuance of such payments, or a part of them as specified by the disabled member, to such contingent annuitant for his or her life after the death of the disabled member.

V. Once the contingent annuitant option has been elected by a disabled member, it may not be changed or revoked except in the case of death of the contingent annuitant. If the contingent annuitant dies after the disabled member has started receiving disability benefits, the amount of the payments which the disabled member is then receiving or is entitled to receive shall at that time with no provisions for retroactive payments revert back to what it would have been at start of the payment of disability benefits if the option had not been chosen and will cease upon the disabled member's death.

218:18 Ten-Year Certain Option. Instead of the normal form of monthly retirement benefit provided under section 12 of this act, a member may elect an actuarially reduced monthly retirement benefit payable for 10 years certain and life thereafter. Such election may be made by a member at any time prior to his or her retirement date and may not be changed after his or her retirement date. Under this option, 120 monthly payments will be made regardless of how long the member lives. If a member dies after his or her retirement date, but before 120 monthly payments have been made, the balance of the 120 monthly payments shall be made to the member's beneficiary. If the beneficiary, having survived the retired member, dies before all of said 120 payments have been made, then the commuted value of the balance of said payments shall be paid in a lump sum to the beneficiary's estate. If the member dies before his or her retirement date, no benefits shall be payable under this option. If the member survives beyond the 120 month guaranteed payment period, actuarially reduced monthly retirement benefits shall continue until the death of the member at which point the benefit payments shall cease.

218:19 Designation of Beneficiaries. A member may, prior to his or her retirement date, designate a beneficiary or beneficiaries to receive any benefits, other than the annuity death benefit payable under section 16, paragraph I, payable on or after the member's death. The member shall designate his or her beneficiaries on a form satisfactory to the retirement board. The board shall be entitled to rely on a form that is witnessed by a board representative or a notary public and delivered to a retirement board representative. A member may at any time revoke his or her beneficiary designation or change his or her beneficiaries by completing a new form in accordance with the requirements of this section. The retirement board shall be entitled to rely on such designation for purposes of the payments of benefits under this act. In the event no valid designation of beneficiary exists at the time of the member's death, or all beneficiaries shall predecease the member, any benefits shall be payable to the member's estate.

218:20 Adjustments in Benefits for Retirees to Maintain Financial Parity. In order to maintain the economic value of a member's retirement income on a parity with the value of the monthly payments at the time of retirement, and to offset the impact of inflation in reducing the real income of the member's retirement payment, the retirement board may, as deemed necessary, adjust the payments to retirees to maintain their incomes at an approximate level with their real incomes at the time of retirement, provided, however, that payments to retired members shall not be less than the payment to which they were initially entitled at the time of retirement; provided further that sufficient funds are available to fund any additional benefits either through earnings of the retirement fund or through such special appropriation by the city as may be approved by the board of mayor and aldermen.

218:21 Limitations of Action. No action for amount due under the provisions of this act shall be brought by a member but within 3 years after the right of action accrues. Persons legally incapable of bringing an action when the right accrues may sue at any time within 3 years next after becoming legally capable of instituting suit. All amounts not claimed within said period shall remain a part of the retirement fund.

218:22 Exemptions from Taxation. The right of any person to a pension or to the return of contributions, any benefit or right accrued or accruing to any person under the provisions of this act, and the cash and securities held under this act, shall be exempt from any state or municipal tax, and exempt from levy and sale garnishment, attachment or any other process, and shall be unassignable.

218:23 Exclusive Benefit of Members and Beneficiaries. All contributions made by the city to the retirement system shall be for the exclusive purpose of providing benefits to the retirement system members and their beneficiaries, and no part of the assets of the retirement system shall revert to the city or other contributors, except if a contribution is made to the retirement system by the city under mistake of fact, such contribution shall be returned within one year after its payment and in the event of the termination of the retirement system, excess funds shall be returned to the city as provided in section 27 of this act.

218:24 Water Department Contributions and Employees' Eligibility. The employees and officials of the water department of the city shall be entitled to the benefits of, and subject to the requirements of this act. The water department shall pay to the retirement fund annually such amounts as the retirement board determines to be necessary in accordance with sound actuarial principles, to defray the city share of the cost of pensions to which its employees and officials are or may be eligible hereunder.

218:25 Employees Previously Retired. All employees who are retired on January 1, 1974, shall continue to receive the benefits to which they were previously entitled under the provisions of the various enabling acts concerning pensions for employees of the city prior to the passage of this act. The board of mayor and aldermen of the city is authorized to appropriate this amount in the municipal budget on a yearly basis.

I. Any member aggrieved by a decision of the retirement board denying the benefits provided by this act may request a hearing by filing a written petition no later than 45 days after the date of the decision. The petition shall include the name and address of the member, the denial of benefits being contested, legal basis on which the denial is being contested, and any documentation or exhibits which support the member's position. The retirement board shall grant or deny the hearing request within 14 days of the member's request. The rules and procedures for all hearings shall be set forth in the administrative rules.

II. All decisions of the retirement board following any hearing shall be sent to the petitioning member by certified mail, return receipt requested, within 45 days of the hearing. Any decision adverse to the member shall be made in writing and shall enumerate the findings of fact and conclusions of law upon which the decision is based. Any decision in favor of the member shall be transmitted to the employee in writing, but may be in summary form.

III. The procedure for review, rehearing, and appeal of an order or decision of the retirement board with or without a hearing shall be that prescribed by RSA 541, as amended from time to time.

I. In the event of the merger or consolidation of the retirement system with, or the transfer of assets or liabilities to, another retirement plan qualified under Section 401(a) of the Code, each member shall be entitled to receive a benefit, upon termination of such other retirement plan after such merger, consolidation, or transfer, which is at least equal to the benefit which the member would have been entitled to receive immediately before the merger, consolidation, or transfer if the retirement system had been terminated at that time.

II. In the event of the discontinuance of the retirement system, or the complete discontinuance of contributions by the city, an actuarial study shall be made to determine the amount of reserve funds necessary to continue to fund those retirements then in effect, and such funds shall be reserved for that purpose, and any excess funds shall be returned to the city. Members shall be vested as provided in accordance with the applicable provisions of sections 411(e)(2) and 401(a)(7) of the Code notwithstanding any provision of this act to the contrary.

194:2 Referendum. At the election to be held in the city in November, 2002, the city clerk then in office shall cause to be included on the ballot the following statement and question: "A contributory retirement plan for city employees was adopted by the voters of Manchester at the November 1973 election. The plan became effective in January 1974, and now, some operating changes are needed. Are you in favor of the passage of an act of the General Court of 2002, amending the contributory pension system for employees of the City, based on Retirement Board and actuarial experience with the plan since January 1974?" Beneath this statement and question shall be printed the word "Yes" and the word "No" with a square immediately opposite such word in which the voter may indicate his or her choice. If a majority of the voters present and voting on the question shall signify their approval thereof, this act shall be declared adopted effective as of the date of the election, except as otherwise provided within the act. The city clerk shall, within 10 days after said election, certify to the secretary of state the result of the vote on the question.

194:3 Effective Date. Section 2 of this act, relative to the referendum, shall take effect upon its passage. If the remaining provisions of this act shall be adopted as provided in section 2, said provisions shall be declared adopted and shall become effective on the date of the election.

(Effective Date: Section 2 of this act, relative to the referendum, shall take effect May 15, 2002. If the remaining provisions of this act shall be adopted as provided in section 2, said provisions shall be declared adopted and shall become effective on the date of the election.]