1. 1. Notwithstanding any other law to the contrary, the board of trustees, on or before the first of March of each year, shall certify to the proper city authorities the amount required to fund system benefits for the system's current fiscal year. This amount will be equal to the annual normal cost plus the annual amount that is necessary to amortize the unfunded liability of the system over a period of not more than thirty years, determined as of the first day of the system's current fiscal year by the system's actuary. The amount so certified shall be appropriated, subject to any adjustment made by the provisions of this section, by the city and transferred to the system.
2. 2. For purposes of this section, "annual revenues" shall mean all funds received from members' contributions, city contributions and all investment income received during the system's fiscal year; "annual expenses" shall mean all benefits, administrative costs and refunds paid during the system's fiscal year; "annual surplus" shall mean the excess, if any, of annual revenues over one hundred fifty percent of annual expenses for a system fiscal year.
3. 3. There is hereby created a "Surplus Reserve Fund". This fund shall consist of two subfunds, the "future benefit fund" and the "city credit fund". As of the first day of each system fiscal year ending after May 25, 1990, there shall be deposited in each of the future benefit fund and the city credit fund fifty percent of the prior year's annual surplus plus, separately for each fund, allocable earnings, based upon the total system investment return for the system's prior fiscal year.
4. 4. The amount in the future benefit fund shall be used to provide future benefits as approved by a majority of the board of trustees in accordance with an appropriate enabling ordinance. No changes in benefits provided from the future benefit fund shall be made unless the amount in the future benefit fund is equal to or greater than the full amount of the present value of the future benefit changes as determined by the system's actuary. When a benefit change is so implemented, the full amount of the present value of the total future benefit changes shall be transferred from the future benefit fund to the general funds of the system to effectuate the full and immediate funding of the benefit changes.
5. 5. As of the first day of any system fiscal year ending after May 25, 1990, fifty percent of the prior system fiscal year's annual surplus shall be transferred from the city credit fund to the general funds of the system to be credited against the city's contribution for the system's current fiscal year.
6. 6. As of the first day of each system fiscal year ending after May 25, 1990, for the purposes of determining the system's normal cost and amount necessary to amortize the unfunded liability, the system's assets shall exclude the prior year annual surplus and any additional amounts in the surplus reserve fund.
7. 7. The last determination of annual surplus will be for the system fiscal year ending prior to January 1, 1994. If any moneys are remaining in the future benefit funds after January 1, 1995, they shall remain in the future benefit fund to be used as outlined in this section until the future benefit fund is depleted.
8. 8. This section shall expire January 1, 1995, unless the United States Internal Revenue Service determines prior to such date that the provisions of this section are in conflict with the tax exempt requirements for public pension plans, in which case this section shall expire upon such determination.

(L1990 H.B. 1708)

Effective 5-25-90

Expires 1-1-95