Background

The Metropolitan Library System Pension Plan (the Defined Benefit Plan) was established in 1969 under Section 560, Title 65 of Metropolitan Library Act and is managed by a self-insured trust.  In 1998, the Internal Revenue Service (IRS) issued a favorable determination letter recognizing the Plan as a governmental plan. Therefore, the Plan is not subject to the provisions of Employee Retirement Income Security Act of 1974 (ERISA), nor are benefits insured or guaranteed by the Pension Benefit Guaranty Corporation (PBGC).

On March 28, 1983, The Metropolitan Library Commission appointed a Board of Administrators for the Plan (Library Retirement Pension Board). The Pension Board has the responsibility for the management of the Pension Fund and has the responsibility for reviewing the Plan and reporting on its status to the Library Commission annually. The Pension Board consists of the three officers of the Library Commission and three designated Metropolitan Library System employees.

On August 29, 2005, The Metropolitan Library implemented a retirement plan known as a the Metropolitan Library System Defined Contribution Plan.  The plan is available to all hired full-time employees, and to those employees who opted out of the Defined Benefit Plan after August 29, 2005.

Regulations

1. The library system operates two retirement plans:
   
   1. The Defined Benefit plan for those individuals who were under this plan prior to August 29, 2005 and opted to remain under the Defined Benefit plan.
   2. The Defined Contribution plan effective on August 29, 2005 for all full-time employees hired after August 29, 2005, and for those who opted out of the Defined Benefit plan.
2. The operations of both plans are controlled by the plan documents.  Plan documents may be amended as determined by the Library Retirement Pension Board.
3. The following apply to both plans:
   
   1. Employees eligible for participation in the Plans are those who are normally scheduled to work 40 hours per week (full-time employees). The participation of eligible full-time employees is mandatory.
   2. All contributions are pre-tax.
   3. Funds may not be borrowed.
4. The following apply only to the Defined Benefit Plan:
   
   1. An employee is 100% vested after three years of credited service. A year of credited service is defined as the hire date through the end of the fiscal year, June 30^th, and each subsequent year from July 1^st thru June 30^th of at least 1000 earned hours.
   2. The Plan offers several options regarding retirement date:
      1. Early retirement at age 50 with 20 years of credited service or age 62 with five years of credited service.
      2. Normal retirement at age 65 with vested interest.
      3. Late retirement at any age after 65 with vested interest.
   3. The early retirement benefit will be the greater of the actuarial equivalent of the employee’s accrued benefit at normal retirement date or the aggregate value of the employee’s participant contributions plus interest credited.
   4. The normal monthly retirement benefit will be 2.5% of an employee’s Average Monthly Earnings multiplied by years of credited service up to a
      maximum of 32 years. “Average Monthly Earnings” is defined as the average of the employee’s highest 60 consecutive completed calendar months of
      employment by the Library System.
   5. The late retirement benefits will be the greater of: (1) the normal retirement pension determined under the Plan, taking into account Service and Compensation credited after Normal Retirement Age; or (2) the Accrued Benefit, determined as of the later of Normal Retirement Age or the end of the prior Plan Year, actuarially adjusted for late retirement.
   6. Participants contribute a mandatory 4% to the Defined Benefit Plan.
5. The following apply only to the Defined Contribution Plan:
   
   1. An employee is 100% vested after three years of credited service. A year of credited service is defined as the employee’s hire date through the end of the employees anniversary date of hire using the Elapsed Time Method.
   2. Full-time employees must elect a 4% or 6% contribution
   3. Changes can be made from either 4% or 6% annually at a date determined by The Metropolitan Library Pension Board.