Article XXVI. Added By: Stats. 1951; POLICE AND FIRE RETIREMENT SYSTEM, THE CHARTER OF THE CITY OF OAKLAND, Code of Ordinances, Oakland

Article XXVI. Added By: Stats. 1951; POLICE AND FIRE RETIREMENT SYSTEM

Section 2600. There is hereby added to the Charter of the City of Oakland a new Article to be known as Article XXVI for the purpose of combining into one system, hereby created and to be known as THE POLICE AND FIRE RETIREMENT SYSTEM, and the separate system heretofore created by the provisions of Article XIV and XV of this Charter. All persons who become members of the Police or Fire Departments as defined in Article XIV* and XV* of this Charter, including all persons hereafter employed to perform the duties now performed by matrons and substitute matrons of the City Prison, on or after the effective date of this Article, hereby defined as July 1,1951, or the first of the month next following approval by the Legislature, whichever is the later, shall be members of the Retirement System established by this Article and shall be subject to the provisions hereof. All members of the Police or Fire Departments who are subject to the Relief and Pension Systems under the provisions of Article XIV and XV of this Charter, and not permanently retired, including matrons and substitute matrons of the City Prison, shall have the option of being members of this Retirement System under the provisions of this Article, said option to be exercised in writing on a form furnished by the Retirement Board as hereinafter defined, to be filed with the Secretary of the Board not later than 90 days after the effective date of this Article. Upon filing said written option, such persons shall be subject to the provisions of this Article as of its effective date, notwithstanding any other provisions of this Charter; provided that any of such persons who are absent by reason of service in the armed forces of the United States, and any persons on disability retirement under Article XIV or XV on the effective date of this Article, shall have the right to exercise said option within 90 days after return of such persons to service in said departments. Members of the Relief and Pension Systems under Articles XIV and XV of this Charter, who do not exercise the option in this section, shall remain members under the provisions of said articles and under the provisions of Section 2619 and benefits being paid, on the effective date hereof, to or on account of persons who are or have been members under said articles, shall be continued at their existing rates and in accordance with the provisions of said articles, but shall be paid from the fund created under this article.

(a)

Notwithstanding any other provision of this Article XXVI, active members of PFRS shall be permitted to terminate their membership in PFRS and become members of the California Public Employees' Retirement Systems ("PERS") (hereinafter referred to as "tranfser to PERS"); provided that active members may transfer to PERS only if the following occur:

(1)

the City Council authorizes the transfer to PERS; and

(2)

the PFRS Board authorizes transfer of PFRS retirement funds representing the employer and employee contributions to PFRS for each PFRS member who exercises the option to transfer to PERS.

The decision to authorize the transfer to PERS shall be based on the City Council's sole judgment and discretion. The City shall have absolutely no obligation to authorize such transfer and the City Council's decision shall be final and binding and without recourse to a court or law, section 910 of the City Charter, which provides for binding interest arbitration, or any other administrative, contractual or legal avenue or remedy.

The decision of the PFRS Board to authorize transfer of PFRS retirement funds to PERS as described above, shall be based upon the board's sole judgment and discretion exercised in accordance with board members' fiduciary obligations, the prudent person standard, the provision of Article XXVI of the City Charter, the California Constitution and other applicable law.

(Amended by: Stats November 2000.)

* This reference is to the Section or Article so designated in the former Charter.

Police and Fire Retirement Board

Section 2601. In order to continue in force and make effectual pensions and retirements already existing or that may be granted in the future in favor of members of the Police or Fire Departments, the systems heretofore existing under the provisions of Articles XIV and XV of this Charter are hereby combined into one system to be known as the Police and Fire Retirement System and the funds heretofore created, existing and known as the Police Relief and Pension Fund and the Firemen's Relief and Pension Fund, are hereby combined in a common fund to be known and designated as the Police and Fire Retirement Fund. This System and fund shall be managed and administered by a Board hereby created to be known and designated as the Police and Fire Retirement Board, which shall be the successor of and shall have the powers and duties heretofore possessed and exercised by the Board of Trustees of the Police Relief and Pension Fund and Board of Trustees of the Firemen's Relief and Pension Fund. This Retirement Board shall consist of seven (7) members as follows: the Mayor of the City; one active member of the Police Department, or a retired member elected by the active and retired members of the Police Department if no active member of the Police Department is elected to serve on the Board; one active member of the Fire Department, or a retired member elected by the active and retired members of the Fire Department if no active member of the Fire Department is elected to serve on the Board; a life insurance executive of a local office, a senior officer of a local bank; a community representative; and a Police-Fire retired member who shall be elected from the retired members of the Fire Department for a first three (3) year term commencing the first day of the month next following his or her election, and from the retired members of the Police Department for the next successive three (3) year term, and thereafter alternately from the retirement rolls of each of said departments for successive three (3) year terms. The election of the first such Police-Fire retired member by the vote of the retired members of the Fire Department shall be held within ninety (90) days following the effective date of this amendment in the manner heretofore established by and under the supervision of the Retirement Board. In the event an active or retired Police-Fire member does not serve out his or her three (3) year term, his or her successor shall be elected from the department which has most recently elected him/her or her for the remainder of said unexpired three (3) year term. All members elected from the Police and Fire Departments or from the police-fire retirement rolls shall be elected by vote of the active or retired Police and Fire Retirement System members of the respective departments as the case may be, and the Retirement Board may from time to time revise the manner of conducting such elections. The representative of a life insurance company, the representative of a bank, and the community representative shall be appointed by the City Council upon the recommendation of the Mayor. The Mayor, with the approval of the City Council, may designate a City officer or official to serve in his or her place and stead as a member of the Retirement Board for the term of his or her office. The terms of the incumbent board members who are serving terms immediately prior to the effective date of this amendment shall not be affected by this amendment, and those members shall be entitled to serve the balances of their respective terms on the Retirement Board; the terms of office of the future elected member of the Fire Department, of the future elected member of the Police Department and of the future insurance and bank representatives shall be five (5) years and shall follow successively the end of the term of the respective incumbent member of the Fire Department, member of the Police Department, and insurance and bank representative members; the first term of office of the community representative shall be two (2) years commencing the first day of the month next following the effective date of this amendment, and thereafter such member shall be appointed for successive five (5) year terms. The Mayor or his or her designated alternate shall serve the term of the Mayor. In the event of a vacancy, a successor shall be elected or appointed as the case may be for the unexpired portion of the term vacated. Election or appointment of successors as hereinabove provided shall be held or made not more than ninety (90) days prior to the expiration of the term of office of the member to be succeeded, or in the event of a vacancy in an office prior to the termination thereof not more than ninety (90) days immediately following the occurrence of such vacancy. The members of the Board shall serve without compensation.

(a)

The City Attorney shall attend all meetings of the Board in person or by authorized representative.

(b)

The Board shall hold regular meetings monthly and special meetings at any time upon the call of its President. A majority of the members of the Board shall constitute a quorum for the transaction of business. The powers conferred by this Article upon the Board shall be exercised by order or resolution adopted by the affirmative votes of at least four (4) members of the Board. At the regular meeting in September of each year, the Board shall select one of its members to act as President for the ensuing year. The Board shall keep a written record of its proceedings which shall be public.

(c)

The Board shall appoint a Secretary who shall hold office at its pleasure and who shall have the power to administer oaths and affirmations and issue subpoenas in all matters pertaining to the administration and operation of the System. The Board shall also appoint an actuary who shall hold office at its pleasure, and medical examiners in connection with disability retirement, and such additional clerical and other assistants as the City Council may authorize. All regular and permanent employees of the Board shall, with the exception, of the Secretary, Actuary and Medical Examiners, be appointed under the provisions of Article XIII of this Charter.

(d)

The Board shall make an annual estimate of the cost of administering the Retirement System and shall transmit the same to the City Administrator at such time as he may direct. The amount necessary for the administration of the System shall be paid out of the Police and Fire Retirement Fund.

(e)

The Board shall possess power to make all necessary rules and regulations for its guidance and shall have exclusive control of the administration and investment of the fund established for the maintenance and operation of the system, subject to the terms, conditions, limitations and restrictions hereinafter set forth. All funds received by the Board not required for current disbursements shall be invested in, but not limited to:

(1)

Those investments of a character legal for banks in the State of California.

(2)

Interest bearing obligations of the United States Government, any agency of the United States Government, any bank which is a member of the Federal Deposit Insurance Corporation, or any corporation whose bonds are eligible for investment by banks in the State of California.

(3)

Common stocks provided that:

The Board shall make investment decisions regarding such investments in accordance with the prudent person standard as defined by applicable court decisions and as required by the California Constitution.

Such stock is registered on a national securities exchange, as provided in the "Securities Exchange Act of 1934" as amended. Such registration shall not be required with respect to the following stocks:

The common stock of a bank which is a member of the Federal Deposit Insurance Corporations and has capital funds, represented by capital, surplus, and undivided profits of at least fifty million dollars ($50,000,000);

The common stock of an insurance company which has capital funds, represented by capital, special surplus funds, and unassigned surplus of at least fifty million dollars ($50,000,000).

Not more than 2% of the book value of the invested funds of the retirement system may be invested in common stock of a single corporation.

The total number of shares held in any single corporation single corporation shall not exceed 5% of the issued and outstanding common shares of such corporation.

(4)

Shares of diversified management investment companies (Mutual Funds) provided that:

Such diversified management investment companies shall be registered under the "Investment Company Act of 1940" and shall each have total assets of at least $50,000,000.

(5)

Preferred stocks and securities convertible into common stocks, provided:

That of the funds invested in such stocks or convertibles not more than 2% of the book value of the invested funds of the Retirement System may be invested in such stocks or convertibles of a single corporation; and

That the total number of such shares or convertibles held in any single corporation shall not exceed 5% of the issued and outstanding preferred stock or convertibles of such corporation; and

That the corporations in whose preferred stock or convertible securities the funds of the Retirement System are invested shall be only those whose common stock would qualify for investment of funds of the Retirement System under subsection 3 above; and

That such investments authorized by this subsection 5 does not exceed ten percent of the book value of the invested funds of the Retirement System.

(6)

F.H.A. mortgages, certificates and shares of state or federal chartered savings and loan associations if insured as defined in Title IV of the National Housing Act, provided that such investments shall not exceed fifteen percent of the book value of the invested funds of the Retirement System.

(7)

Equity or mortgage debt investments in existing real property or in property to be constructed, except that no mortgage investments may be funded until the improvements on the property are substantially complete. Such investments shall not exceed twenty percent of the book value of the invested funds of the Retirement Systems. The Board shall obtain the opinion of competent real estate advisors that such investment is prudent and that it meets the current investment guidelines of the Board, before committing to make such investment, and provided:

The Board is owner in fee title and/or a lease-hold in the real property and/or real property and improvements in and upon which such investment is to be made, with the exceptions of convertible and take-out loans and mortgage pool investments.

Before making such an investment the Board shall appoint a qualified real property appraiser acceptable to the City Administrator who shall examine the property of the plans and specifications of any improvement proposed to be constructed and who shall determine and report to the Board whether the project in his opinion will have a fair rental value sufficient to return the investment together with interest over a period of time not to exceed 30 years.

In order to make the provisions of this section relating to the investment of retirement funds completely effective, the Board is authorized for investment purposes only to purchase, sell or lease real property or to enter into options therefor and when necessary for investment purposes to enter into con-contracts for the construction of buildings and may repair and maintain such property and do any and all things necessary to protect the investment including, but not limited to, purchasing insurance against the loss of the property or the loss of use and occupancy of the property. It may also take any other action necessary to carry out the investment provisions of this section. In the construction of buildings, the Board shall follow, substantially and insofar as applicable, the procedure and limitations prescribed by law for the construction of buildings by the City of Oakland.

The Board may secure from competent investment counsel, not a member of the Board, such counsel and advice as to investing the funds of the Retirement System as it deems necessary. Discretionary powers granted such investment counsel will be at the option of the Board. The Board shall pay for such counsel and advice such compensation as it deems reasonable, payable from Retirement System funds.

The City Treasurer shall be the custodian of the Retirement Fund, subject to the exclusive control of the Board as to the administration and investment of said fund. All payments from the said fund shall be made by the Finance Director as authorized by the Board. All demands against said fund shall be presented, audited and paid as provided in the Charter of the City. Interest on any cash and on any investments constituting a part of the said fund shall be paid into said fund as received. Except as herein provided, no member and no employee of the Board, shall have any interest, direct or indirect, in the making of any investment, or in the gains or profits accruing therefrom. And no member or employee of said Board, directly or indirectly, for himself/herself or as an agent or partner of others, shall borrow any of its funds or deposits or in any manner use the same except to make such current and necessary payments as are authorized by said Board; nor shall any member or employee of said Board become an endorser or surety or become in any manner an obliger for moneys invested by the Board.

(f)

Board shall have such additional power and authority as is conferred by Section 20* of this Charter.

(g)

If any section, word, clause or provision of this Article shall be held unconstitutional, the remaining sections, clauses, words or provisions thereof shall not be affected thereby. All the provisions of this Article are to be liberally construed.

(Amended by: Stats. 1971, 2004 and 2007)

* This reference is to the Section or Article so designated in the former Charter.

Duties of Retirement Board, Actuarial Investigation And Valuation

Section 2602. The Board shall exercise the powers and perform the duties conferred on it by other sections hereof, and in addition thereto:

(a)

Interest on Contributions. Shall credit contributions of members, of beneficiaries, and of the City with interest at a rate fixed by the Board from time to time.

(b)

Actuarial Data. Shall keep in convenient form such data as shall be necessary for the actuarial valuation of the Retirement System. As of June 30, 1956, and thereafter at intervals of not to exceed three (3) years, the Board shall make an actuarial investigation into the mortality, service, and compensation experience of the members and beneficiaries, and further (1) with respect to persons exercising the option in Section 2600 and (2) with respect to persons who become members on and after the effective date of this Article, shall make an actuarial valuation of the assets and liabilities of the Retirement System. From time to time, the Board shall determine the rate of interest being earned on the Retirement Fund. Upon the basis of all or any of such investigation, valuation, and determination, the Board shall:

(1)

Adopt for the Retirement System such interest rate and such mortality, service and other tables, or any of such items, as shall be deemed necessary;

(2)

Make sure revision in the City's and members' rates of contribution under the Retirement System with respect to persons who become members of the Police or Fire Department, after the effective date of this Article, as shall be deemed necessary to comply with Section 2619 of this Article.

(c)

Additional Records. In addition to other records and accounts shall keep such records and accounts as shall be necessary to show at any time:

(1)

The total contributions of members made after the effective date hereof, with credited interest;

(2)

The total contributions of retired members made after the effective date hereof, with credited interest; less the annuity payments made to such members;

(3)

The accumulated contributions of the City held for the benefit of members on account of service rendered as members of the Retirement System.

(4)

All other accumulated contributions of the City, which shall include the amounts available to meet the obligation of the City on account of benefits that have been granted.

(d)

The morality, service, and other tables and the City's members' rates of contribution with respect to persons who become members of the Police or Fire Department after the effective date of this Article, as recommended by the actuary and the valuations determined by him and approved by the Retirement Board shall be conclusive and final, and the Retirement System shall be based thereon.

(Amended by: Stats. June 1976.)

Section 2603.

The Board may and in disputed matters shall hold public hearings in all proceedings pertaining to retirement and to the granting of retirement allowances, pensions, and death benefits. Notice of the time and place of such hearing shall be given in writing to the member or dependents affected thereby either by personal service of a copy of said notice or by depositing a copy thereof in the United States Mail postage prepaid addressed to the member or dependents affected thereby at his or their last known address at least five (5) days prior to said hearing. Proof of said service must be made at said hearing. The member or dependents affected thereby shall be entitled to appear personally at said hearing and to have counsel.

Section 2604.

A rehearing in any matter may be applied for by filing a written petition for rehearing with the Secretary of the Board within ninety (90) days after mailing of notice by registered mail to the interested party or his attorney, of the rendition of any order or decision of the Board. The Board shall grant or deny such petition within forty (40) days from the filing thereof, provided that the time so limited may be extended by the Board for not to exceed forty (40) additional days. If a hearing is granted, the same shall be heard within forty (40) days after the rendition of the order granting the same. At such rehearing additional evidence not produced at the original hearing may be introduced. The petition must designate the grounds upon which it is based.

Section 2605.

Any member of the System or dependent affected thereby who is dissatisfied with any order or decision of the Board may, without first applying to the Board for a rehearing, apply to the Superior Court of the State of California in and for the County of Alameda for a Writ of Mandate in accordance with the provisions of the Code of Civil Procedure of the State of California. Upon the hearing of any such application for a Writ of Mandate, all questions of both law and fact must be tried or heard anew in the Superior Court.

Section 2606.

The provisions of Sections 2604 and 2605 shall be available to any member of the System or dependent affected by any order or decision of the Board without prejudice to the right to pursue any other remedy provided for by the laws of the State of California.

Section 2607.

The following words and phrases, as used in this Article, unless a different meaning is plainly required by the context, shall have the following meaning:

"Retirement allowance," "Death allowance," or "allowance" shall mean equal monthly payments, beginning to accrue upon the date of retirement, or upon the day following the date of death, as the case may be, and continuing for life, unless a different term of payment. is definitely provided by the context.

"Compensation" as distinguished from benefits under the Labor Code of the State of California, shall mean the monthly remuneration payable in cash, by the City, without deduction, for time during which the individual receiving such remuneration is a member of the Police or Fire Department, but excluding remuneration paid for overtime and for special details or assignments as provided in Sections 91 and 97* of the Charter.

"Benefit" shall include "retirement allowance," "death allowance," "allowance," and "death benefit."

"Compensation attached to the average rank held" shall mean the compensation attached to the lowest rank held during the three years immediately preceding retirement plus one thirty-sixth ( 1/36 ) of the difference between it and the compensation attached to any higher rank held during that period of each month, and fraction thereof, the higher rank was held.

For the purposes of the Retirement System established by this Article, the terms "member of the Police or Fire Departments," "member of the Department," "member of the System," or "member" shall mean any regularly appointed member of the Police or Fire Department of the City of Oakland who became members of the Retirement System established by this Article, prior to July 1, 1976, including matrons or substitute matrons of the City Prison and emergency patrolmen and horsemen.

"Retirement System" or "System" shall mean the Police and Fire Retirement System established by this Article.

"Charter" shall mean the Charter of the City of Oakland.

"Interest" shall mean interest at the rate adopted by the Retirement Board.

"Retirement Board," or "Board" shall mean the Police and Fire Retirement Board created by this Article.

"Children" shall include, with respect to service retirement, children adopted at least five (5) years prior to retirement, and with respect to disability retirement and death before retirement, children adopted at any time prior to such retirement or death.

Words used in the masculine gender shall include the feminine and neuter genders; singular numbers shall include the plural, and the plural the singular, and wife shall include husband, and widow shall include widower.

"Accumulated contributions" shall mean contributions made by the member since May 3, 1943, plus credited interest.

(Amended by: Stats. June 1976.)

* This reference is to the Section or Article so designated in the former Charter.

Retirement for Service

Section 2608.

(a)

Any member of the Police or Fire Department who completes at least ten (10) years of service in the aggregate (said service to be computed under Section 2609) may retire at his option on or after the twenty-fifth (25th) anniversary of his date of employment. Said member shall receive a retirement allowance equal to twenty percent (20%) of the compensation attached to the average rank held during the three (3) years immediately preceding such retirement, plus an additional allowance at the rate of two percent (2%) for each additional year of service beyond ten (10) years, not to exceed a period of an additional ten (10) years.

(b)

Any member of the Police or Fire Department who completes at least twenty (20) years of service in the aggregate (said service to be computed under Section 2609), regardless of age, may retire at his option. Said member shall receive a retirement allowance equal to forty percent (40%) of the compensation attached to the average rank held during the three (3) years immediately preceding such retirement, plus an additional allowance at the rate of two percent (2%) for each additional year of service beyond twenty (20) years, not to exceed a period of an additional five (5) years.

(c)

Any member of the Police or Fire Department who completes at least twenty-five (25) years of service in the aggregate (said service to be computed under Section 2609), regardless of age, or any member who completes at least twenty (20) years of service in the aggregate at or after attaining the age of fifty-five (55) years, may retire for service at his option.

(d)

Members shall be retired on the first day of the month next following the attainment by them of the age of sixty-five (65) years. Any such member who attains the age set forth in the preceding sentence as the compulsory age of retirement during any twelve (12) months, prior to the beginning of the twelve (12) months, shall be retired on the first day of the twelve (12) months.

(e)

A member retired after meeting the requirements of paragraphs (c) or (d) next preceding, shall receive a retirement allowance equal to fifty percent (50%) of the compensation attached to the average rank held during the three (3) years immediately preceding such retirement, plus an additional allowance at the rate of one and two-thirds percent (1- 2/3 %) of said compensation for each year of service rendered after July 1, 1951, and after qualifying for service retirement, not to exceed ten (10) years. A member required to retire under paragraph (d) next preceding before completing twenty (20) years of service in the aggregate computed under Section 2609, shall receive a retirement allowance which bears the same ratio to the retirement allowance which said member would receive if he were entitled to be credited with twenty (20) years of service, as the service with which he is entitled to be credited, bears to twenty (20) years.

(f)

Upon the death of member after qualification for service retirement, or after retirement for service or because of disability, and if death shall result from other cause than injury received in or illness caused by the performance of duty, two-thirds ( 2/3 ) of the retirement allowance to which the member would have been entitled if he had retired for service at the time of death, or two-thirds ( 2/3 ) of the retirement allowance as it was at death, as the case may be, shall be continued, regardless of the age of the surviving widow, to the dependents of the member in the order of succession as defined in Section 2612, provided that if retirement was for injury received in or illness caused by the performance of duty and if death occurs prior to the date upon which the member would have qualified for service retirement, the allowance continued shall be reduced upon said date in the same manner as it would have been reduced had the member not died.

(g)

After having qualified for service retirement under the provisions of paragraph (a) of this section, a member shall be entitled to retire at any time thereafter and nothing shall deprive said member of said right.

(h)

The age of a member which was accepted for appointment to the Police or Fire Department shall be admissible in evidence as prima facie proof of his age for retirement purposes.

(i)

If, at the date of retirement for service or disability, said member has no wife, children or dependent parents, who would qualify for the continuance of the allowance after the death of said member, or with respect to the portion of the allowance which would not be continued, regardless of dependents, a member retired under this Article may elect, before the first payment of the retirement allowance is made, to receive the actuarial equivalent of his allowance or the portion which would not be continued, regardless of dependents, as the case may be, partly in a lesser amount to be received by him throughout his life, and partly in other benefits payable after his death to another person or persons, provided that such election shall be subject to all of the conditions prescribed by the Council to govern similar election by members of the Oakland Municipal Employees' Retirement System.

(Amended by: Stats. June 1976.)

(j)

The retirement allowances payable pursuant to this section are subject to the limitations provided by Section 2620. This subsection shall be null and void and without further effect should the United States Internal Revenue Code Section 415 be amended to exempt municipal pension plans from the stated benefit limitations.

(Added by: Stats. November 1992.)

Time and Service To Be Included

Section 2609. The following time and service shall be included in the computation of the service to be credited to a member for the purpose of qualification for retirement and death benefits and for calculation of retirement benefits:

(1)

Time during and for which said member received compensation as a member of the Police or Fire Department prior or subsequent to the effective date of this Article, including all such time said member was unable to perform his duties by reason of injury or sickness from any cause.

(2)

Time during which said member was absent by reason of service with the armed forces of the United States either during a war involving the United States as a belligerent, or in any other National Emergency and for six (6) months thereafter and who is not dishonorably discharged or released therefrom.

(3)

Any police or fire service outside the limits of the City of Oakland performed by a member of the Police or Fire Department and under orders of a superior officer of such member, shall be considered as city service and any disability or death resulting therefrom shall be considered as received in and arising out of the performance of duty.

Disability Retirement

Section 2610.

(a)

Any member of the Police or Fire Department who is incapacitated for the performance of duty by reason of any injury received in, or illness caused by or arising out of the performance of duty may be retired not sooner than one (1) year after said member first became incapacitated by reason of said injury or illness unless the member requests and the Board grants earlier retirement; and, if not qualified for service retirement shall receive a retirement allowance equal to seventy-five percent (75%) of the compensation attached to the average rank held by such member during one (1) year immediately preceding such retirement. Such retirement allowance shall be paid until the date upon which said member would have completed twenty-five (25) years of service and qualified for service retirement had such member rendered service without interruption, and on and after said date said retirement allowance shall be equal to the retirement allowance said member would have received if retired for service on said date, based on the compensation attached to the average rank held during the one (1) year next preceding retirement. If at the time of retirement for disability, the member is qualified for retirement for service, said member shall receive a retirement allowance computed under the provisions of Section 2608.

(b)

Any member of the Police or Fire Department who is incapacitated for the performance of duty for any cause not included in the provisions of the preceding paragraph (a) and who shall have completed at least five (5) years of service in the aggregate, shall be retired upon a retirement allowance calculated under Section 2608, if he has attained the age of fifty-five (55) years, otherwise upon a retirement allowance equal to one and one-half percent (1-½%) of the compensation attached to the average rank held by such member during the three (3) years next preceding such retirement for each year of service, provided that said retirement allowance shall not be less than thirty-three and one-third percent (33- 1/3 %) of said compensation. The question of retiring a member under this section may be brought before the Board on the Board's own motion, by recommendation of the City Administrator or by petition of said member or his guardian.

(c)

The Board may at any time order any member who has been retired for disability to be examined by one or more physicians appointed by the Board for that purpose, and if it is found that the disability has ceased, shall order that the retirement allowance shall cease and said member shall be restored to the service in the rank occupied at the time of retirement.

(d)

(Added by: Stats. November 1992: Amended by: Stats. March 2004.)

Death From Service-Connected Causes

Section 2611. If a member of the System shall die before or after retirement by reason of an injury received in, or illness caused by or arising out of the performance of duty, an allowance shall be paid to the dependents of such member in the order of succession established by Section 2612, in the following amount:

(1)

If the member at the time of death was qualified for service retirement but had not retired, the allowance shall be equal to the retirement allowance which the member would have received if he had retired for service on the date of death, but such allowance shall not be less than one-half (½) of the compensation attached to the rank held by such member at the time of his death.

(2)

If death occurs prior to qualification for service retirement, the allowance shall be equal to one-half (½) of the compensation attached to the rank held by such member at the time of death.

(3)

If death occurs after retirement, the allowance shall be equal to the retirement allowance of the member, except that if retirement was for disability due to performance of duty, and if death occurred prior to the date upon which the member would have qualified for service retirement, the allowance shall be reduced upon said date in the same manner as it would have been reduced had the member not died. If retirement was for disability not due to performance of duty, the allowance shall not be less than one-half (½) of the compensation attached to the average rank held by the member during the one (1) year immediately preceding retirement.

(4)

The allowance provided for in paragraphs (1) and (2) immediately preceding, if payable to the widow of such member, shall be increased while there are children of such member as provided in Section 2612.

(5)

The widow of such member shall be eligible to receive the allowance provided for in this section without regard to the time of her marriage to such member; provided that in the event the death of such member shall occur after retirement, such marriage shall have occurred at least one year prior to retirement.

Death of Member; Payment of Benefits; Order of Succession

Section 2612.

(1)

In cases in which a benefit is payable to the dependent of a deceased member under the provisions of this Article, such benefit shall be payable to the family of such member in the following order of succession:

(a)

To the surviving spouse of such member as long as he or she shall not remarry prior to January 1, 1985, provided that, if death occurred after retirement, the surviving spouse shall have been married to the decedent at least one (1) year prior to the member's retirement; and provided further that in the event such decedent leaves a surviving child or children and if death occurred prior to retirement, an additional amount shall be paid to such surviving spouse during the lifetime of each child until said child shall have married or attained the age of eighteen (18) years as follows: For one child, twenty-five percent (25%) of the allowance provided for in this Article; for two children, forty percent (40%) of such allowance, and for three or more children fifty percent (50%) of such allowance, provided that the aggregate payments to the surviving spouse under this section shall not exceed seventy-five (75%) percent of the compensation attached to the rank held by the decedent at the time of his or her death. Upon a remarried spouse's death, the member's retirement allowance shall cease unless there are eligible children.

(b)

In the event the decedent shall not leave surviving an eligible spouse to receive said allowance, but shall leave a child or children under the age of eighteen (18) years, or should the decedent leave an eligible spouse and a child or children under the age of eighteen (18) years and the spouse dies while said child or children are yet under the age of eighteen (18) years, then the retirement allowance is payable to such child or children collectively until the youngest child attains the age of eighteen (18) years, provided that no child shall receive any such allowance after attaining the age of eighteen (18) years or marrying.

(c)

In the event the decedent shall leave surviving him no eligible widow, child or children but shall leave a parent or parents dependent on said member for their support, then to such parent or parents collectively in an amount or amounts to be determined by the Board in the proportion that the degree of support furnished by decedent bears to the allowance which would have been payable to an eligible widow of such decedent.

(Amended by: Stats. June 3, 1986.)

(2)

In the event a deceased member leaves no dependents qualified to receive an allowance, there shall be payable a death benefit as follows:

(a)

If death occurs before retirement, a sum equal to the member's accumulated contributions in the Fund plus an amount equal to one-twelfth ( 1/12 th) of the annual compensation attached to the rank held by such member at the time of death for each completed year of service as a member at the time of death for each completed year of service as a member of the Police or Fire Department, not to exceed six (6), to his designated beneficiary, and if none, then to the estate of such member.

(b)

If death occurs after retirement, then the sum of One Thousand Dollars ($1,000.00) to the beneficiary designated by such member, or if none, then to the estate of such decedent.

No Forfeiture Of Pension Earned

Section 2613. Whenever any member of the System or a dependent of such member receiving a retirement allowance under the provisions of this Article shall willfully disobey any rule or regulation of the Board with the intention of being insubordinate, or shall be convicted of felony or shall become dissipated or shall become an habitual drunkard, in such event the Board may order that the retirement allowance payable to such member or dependent shall not be paid to such person but shall thereupon become payable to the family of such member next in order of succession as provided in Section 2612 of the Article.

Hernia, Heart Trouble and Pneumonia

Section 2614. The terms "injury" or "illness" as used in this Article shall be construed to include hernia, heart trouble and pneumonia which develops or manifests itself during a period while a member of the System is in the active service of the Police or Fire Department. Such hernia, heart trouble or pneumonia so developing or manifesting itself shall be presumed to have been caused by and to have arisen out of and in the course of the performance of duty in such active service. This presumption is disputable and may be controverted by other evidence, but unless so controverted, the Board is bound to find in accordance with it.

City Service, Restrictions

Section 2615.

(1)

No member of the System who is retired for service or disability under this Article shall hold an elective or appointive position in the service of the City of Oakland, including membership on Boards or Commissions, except that retired members of the Police and Fire Departments may serve on the Police and Fire Retirement Board as provided in Section 2601, nor shall any such person receive any payment for service rendered to the City, provided that service such as an election officer or juror shall not be affected by this section.

Notwithstanding any other provision of this section 2615 or this City Charter, retired members of the System may hold employment with the City pursuant to a Deferred Retirement Option Plan ("DROP") authorized by the City. DROP shall mean a program under which, after the effective date of a System member's retirement, (1) he/she continues to work for the City (a) for a period of time prescribed by the City and (b) in the position and assignment determined by the City in its sole judgment and discretion; (2) neither the City nor the System member makes retirement contributions; (3) the System member receives no service credit for the period of time he/she is employed by the City; and (4) the System member's monthly retirement allowances are paid into a fund established by PFRS until the member terminates his/her City employment. DROP is intended to encompass all types of DROP programs.

(Amended by: Stats. November 2000.)

(2)

Retired members of the System or dependents of such members under the provisions of this Article shall not be subject to residence requirements.

(Amended by: Stats. May 13, 1982.)

Section 2616.

(1)

In the event of the death of or injury to any member of the System caused by the unlawful or negligent act of a third person while such member is acting in the performance of duty as a member of the Police or Fire Department or otherwise, any judgment for damages for such death or injury recovery by such member or dependent or personal representative shall not affect in any manner the amount of any allowance or death benefit payable to such member or dependents under the provisions of this Article. This section shall not be construed as in any manner prohibiting the City of Oakland or the Retirement System from recovering from said third person its damages.

(2)

It is the intention of this section that allowances granted to or on account of members of the System for injury, illness or death incurred in the performance of duty shall not be cumulative with benefits under the Labor Code of California awarded as the result of the same injury, illness or death. If any member of the System or dependent receives compensation under the Labor Code for disability or death rising out of and in the course of the performance of duty, any payment on account thereof shall be applied as a credit and set-off against any payment on account of salary granted to such member under Articles XIV and XV, or retirement allowance or other benefit granted to or on account of such member under the provisions of this Article as follows:

(a)

If the amount is paid in one sum or in installments equal to or greater than such salary, retirement allowance, or other benefit, such member or dependent shall not receive any salary, retirement allowance, or other benefit until the total amount of the salary, retirement allowance, or other benefit which would otherwise be payable equals the total amount received under the Labor Code.

(b)

If the amount is paid in installments less than such salary, retirement allowance, or other benefit, the salary retirement allowance or other benefit shall be reduced so that the total of salary, retirement allowance, or other benefit plus the amounts received under the Labor Code will equal the salary, retirement allowance or other benefit which would otherwise be due.

(c)

In either case any award specifically granted for medical, surgical, or hospital expenses shall not reduce the salary, retirement allowance, or other benefit.

(3)

No benefits shall be paid under this Article on the basis of an award by the Industrial Accident Commission of the State of California.

Death From Non-Service-Connected Causes

Section 2617. In the event of the death of a member of the System under this Article, from causes other than injury received in or illness caused by or arising out of the performance of duty, a benefit shall be payable as follows:

(a)

Whenever any member of the System, other than a retired member or a member eligible to retire for service, who shall have completed ten (10) years or more of service in the aggregate, shall die from causes other than those arising out of the performance of duty, then an allowance equal to thirty-three and one-third (33- 1/3 %) percent of the compensation attached to the rank held by such member at the time of death, shall be paid to the dependents of such members as provided in Section 2612, and increased while there are children of such member as provided in that section.

(b)

Where the member does not qualify under the provisions of paragraph (a) next preceding, one-twelfth ( 1/12 th) of the annual compensation attached to the rank held by the member at the time of his death, for each completed year of service in the Police or Fire Department, not to exceed six (6), plus the accumulated contributions of such member in the Fund, said aggregate sum to be payable to the dependents of such member pursuant to the order of succession established by Section 2612.

(c)

If there be no dependents eligible to receive such benefits under the provisions of Section 2612, said aggregate amount in paragraph (b) next preceding shall be payable to the designated beneficiary of such member or if none, then to the estate of such member.

Resignation Or Dismissal

Section 2618.

(a)

Should a member of the System cease to be a member of the Police or Fire Department through any cause other than death or retirement prior to completing ten (10) years of service, the member's contributions, plus interest thereon credited in accordance with Section 2602(a), shall be refunded to such member.

(b)

Should a member of the System cease to be a member of the Police or Fire Departments after completing at least ten (10) years of service, said member may withdraw his contributions, plus interest thereon credited in accordance with Section 2602(a) from the fund at any time provided such person is not then an active member of the Police or Fire Department, but such person will not be entitled to a retirement allowance unless he is a member who has redeposited in the Fund in accordance with subsection (c) below and who has complied with the requirements of Section 2608.

(c)

If any person who has been refunded his contributions under paragraph (a) preceding, or who has withdrawn his contributions under paragraph (b) preceding shall subsequently become a member of the Police or Fire Department, he shall redeposit in the Fund in a manner to be determined by the Board, the amount so refunded or withdrawn plus interest from the date of the refund or withdrawal to the date of the redeposit, in which event said member shall be entitled to credit for all service rendered prior to withdrawal as such member.

(Amended by: Stats. June 1976.)

Members' And City's Contributions

Section 2619. All payments provided for or on account of persons who are members under this Article and for or on account of persons who remain as members or who have been members of the Funds under Articles XIV and XV, shall be made from funds derived from the following sources, plus interest earned on said funds.

(1)

The normal rate of contribution of each member who exercised the option in Section 2600 shall be five and one-half percent (5-½%). The normal rate of contribution of each person who became a member of the Police or Fire Department after the effective date of this Article and prior to July I, 1976, shall be based on his age taken to the next lower completed quarter year, at the date he becomes a member of the Police or Fire Department, and shall be such as, on the average for each such member, will provide, assuming service without interruption, one-fourth (¼) of that portion of the service retirement allowance to which he would be entitled, without continuance to dependents, upon first qualifying for retirement under Section 2608, and assuming the contribution to be made from the date of his entrance into the Police or Fire Department. Provided that said members' contribution rates shall never decrease below the table of members' contribution rates in effect as of January 1, 1971, and provided further that no member's contribution rate shall exceed thirteen percent (13%) so long as no improvements in the members' benefits occur after July 1, 1976.

(2)

The dependent rate of contribution of each person who becomes a member of the Police or Fire Department after the effective date of this Article, shall be such as, on the average for such member, will provide, assuming service without interruption, and upon his first qualifying for service retirement under Section 2608, one-fourth (¼) of the portion of his allowance which is to be continued under Section 2608, after his death and throughout the life of a surviving wife whose age at said death is three years less than the age of said member, or, as the case may be, a surviving husband whose age at said death is three years more than the age of said member. The dependent rate of contribution of each member who exercises the option in Section 2600, shall be one and one-half percent (1-½%). If at the date of retirement for service or retirement for disability, said member has no wife who would qualify for the continuance of the allowance to her after the death of said member, the dependent contributions with accumulated interest thereon, shall be paid to him forthwith.

(3)

The normal rate of contribution of persons who remain members under Article XIV and XV shall be five percent (5%). Such rate shall be applied to compensation, on and after the effective date of this Article, as described in paragraph 4 of this section. Such persons shall not have dependent contribution rates.

(4)

There shall be deducted from each payment of compensation made to a member throughout his membership, a sum determined by applying the member's normal and dependent rates of contribution to such compensation payment. Except for persons who remain members under Article XIV and XV, the sum so deducted shall be accumulated with interest as set from time to time as provided in Section 2602(a). Such accumulated contribution shall be used to provide benefits for said members, or shall be paid to said member or his estate or beneficiary as provided in this Article.

(5)

Members' contributions deducted from compensation earned prior to the effective date of this Article, and after May 3, 1943, shall not be considered in the determination of allowances, and shall be paid to the Retirement System, with interest, by the City when said accumulated contributions otherwise are payable to or on account of members by the Retirement System.

(6)

The City shall contribute to the Retirement System such amounts as may be necessary, when added to the contributions referred to in the preceding paragraphs of this Section, to provide the benefits payable under this Article and Articles XIV and XV. The City contributions made periodically during the year shall be such as when added to member contributions will actuarial fund all liabilities for all members prior to July 1, 1976, by July 1, 2026. Any fund established pursuant to the 1971 amendment to this subsection and implemented by Retirement Board Resolution No. 3968 which provided for payment of improved or additional benefits shall continue only for the purposes stated herein. Any monies held in such fund as of July 1, 1976, and any interest credited thereon pursuant to Section 2602(a) shall continue to be payable to members of this system as follows:

(a)

For all individuals who received retirement allowances as of December 31, 1972, said allowance commencing January 1, 1973, shall be increased as follows:

(1)

A computation of an additional one percent (1%) of the gross allowance due in December, 1972, shall be made for each said individual. Any additional monies added to the basic retirement allowance because of minor children under Charter Section 2612(a) shall not be included in the computation of said one percent (1%).

(2)

The amount of each said December, 1972, one percent (1%) computation shall become a fixed, non-fluctuating amount which shall be added each month, commencing in January, 1973, to the retirement allowance of each said individual and to any continuation (and in the appropriate percentage to any partial continuation) of each said retirement allowance.

(b)

For members of the System retiring after December 31, 1972, at the date of retirement, a computation of an additional five percent (5%) of the compensation attached to the average rank held by such member during the three (3) years next preceding said retirement shall be made for each individual retiring with at least twenty-five (25) years of service.

The amount of each said five percent (5%) computation shall become a fixed, non-fluctuating benefit amount which shall be added in monthly installments to the retirement allowance of each said individual retiring or who is considered as retiring with at least twenty-five (25) years of service and to any continuation (and in the appropriate percentage to any partial continuation) of each said retirement allowance.

No additional monies from any source whatsoever shall be paid into said fund, and said fund shall cease to exist when the monies held payable for the aforementioned purposes are expended.

(7)

During the absence of a member by reason of service with the armed forces of the United States, either during a war involving the United States as a belligerent, or in any other National Emergency and for six (6) months thereafter, and who is not dishonorably discharged or released therefrom, the City shall contribute for and on behalf of such member, amounts equal to the contributions which would have been made by such member and by the City to the Police and Fire Retirement Fund if he had not been so absent. The contributions made by the City pursuant to the provisions of this paragraph in lieu of contributions which the member otherwise would have made, shall be made available only for the purpose of retirement and death after the completion of ten (10) years of service in the aggregate, and in the event of the resignation or dismissal of said member from service as a member of the Police or Fire Department prior to qualifying for service retirement, or in the event of the death of such member from causes not arising out of the performance of duty prior to the completion of ten (10) years of such service, any withdrawal of accumulated contributions by such member or any death benefit payable by reason of such death shall include only that portion of the accumulated contributions actually made by such member. For the purposes of this Article, a war involving the United States as a belligerent exists: (a) whenever Congress has declared war, and peace has not been formally restored; (b) whenever the United States is engaged in active military operations against any foreign power, whether or not war has been formally declared; or (c) whenever the United States is assisting the United Nations, in actions involving the use of armed force, to maintain or restore international peace and security.

(Added by: Stats. 1951; Amended by: Stats. June 1976, Stats. June 1988.)

Exemption From Requirements of United States Internal Revenue Code Section 415

Section 2620. This section effects an election as authorized under the provisions of Section 415 of the United States Internal Revenue Code to exempt members of the System from the annual pension benefit limitations of United States Internal Revenue Code Section 415.

Notwithstanding any other statute or section of this Charter, the retirement allowance payable to any member of the System shall be subject to the greater of the following limitations as provided by United States Internal Revenue Code Section 415(b), subdivision (10):

(1)

The limitations set forth in Section 415 of the United States Internal Revenue Code of 1986; or

(2)

The accrued benefit of the plan member (determined without regard to any amendment to the System after October 14, 1987).

If any of the provisions of United States Internal Revenue Code Section 415 should be repealed, the provisions of this section shall be deemed repealed to the same extent.

(Added by: Stats. November 1992.)