Section 13-583. Excess benefit plan

a.  As  used  in  this section, the
  following words and phrases shall have the following meanings, unless  a
  different meaning is plainly required by the context:
    (1) "Retirement benefits" shall mean benefits payable to a beneficiary
  by the retirement system which are subject to the limitations imposed by
  section 415(b) of the Internal Revenue Code.
    (2)  "Beneficiary"  shall  mean  a  person who is receiving retirement
  benefits from the retirement system.
    (3)  "Excess  benefit  plan"  shall  mean  the  excess  benefit   plan
  established  by  this section for the sole purpose of paying benefits as
  permitted under section 415(m) of the Internal Revenue Code.
    (4) "Eligible participant" shall mean a beneficiary who is entitled to
  replacement benefits from the excess benefit plan for  a  plan  year  in
  accordance with subdivisions d and e of this section.
    (5)  "Replacement  benefits"  shall  mean  the benefits payable by the
  excess benefit plan to an eligible participant as determined pursuant to
  subdivision e of this section.
    (6) "Internal Revenue Code" shall mean the  Federal  Internal  Revenue
  Code of 1986, as amended.
    (7)  "Plan  year"  shall  mean  the  limitation year of the retirement
  system as provided in section six hundred twenty of the  retirement  and
  social security law.
    b.  There  is  hereby  established  an  excess  benefit plan, the sole
  purpose of which shall be to provide replacement benefits, as  permitted
  by  section  415(m) of the Internal Revenue Code, to beneficiaries whose
  annual retirement benefits  have  been  reduced  because  such  benefits
  exceed the limitations imposed by section 415(b) of the Internal Revenue
  Code.  The  excess  benefit plan shall be administered by the retirement
  board.
    c. There is hereby established a  fund  to  be  known  as  the  excess
  benefit fund which shall be maintained for the sole purpose of providing
  replacement benefits to eligible participants in the excess benefit plan
  established  by  this  section, as permitted under section 415(m) of the
  Internal  Revenue  Code.  Such  fund  shall  consist  of  such  employer
  contributions as shall be made thereto pursuant to subdivision f of this
  section.  Such  contributions  to  the excess benefit fund shall be held
  separate and apart from the assets  held  by  the  other  funds  of  the
  retirement  system,  provided,  however,  that  the assets of the excess
  benefit fund may be invested with the other  retirement  system  assets,
  but  such  excess  benefit fund assets shall be accounted for separately
  from the other retirement system assets.
    d.  All  beneficiaries  of  the  retirement  system  whose  retirement
  benefits  for a plan year are being reduced because of section 415(b) of
  the Internal Revenue Code shall be eligible participants in  the  excess
  benefit  plan  for  that  plan year. Participation in the excess benefit
  plan shall be determined for each  plan  year.  No  beneficiary  of  the
  retirement system shall be an eligible participant in the excess benefit
  plan  for any plan year for which his or her retirement benefits are not
  reduced because of section 415(b) of the Internal Revenue Code.
    e. (1) For each plan year  in  which  a  beneficiary  is  an  eligible
  participant  in the excess benefit plan, such eligible participant shall
  receive replacement benefits from the excess benefit plan equal  to  the
  difference  between the full amount of the retirement benefits otherwise
  payable to the eligible participant for that  plan  year  prior  to  any
  reduction  because  of  section 415(b) of the Internal Revenue Code, and
  the retirement benefits payable to the  eligible  participant  for  that
  plan  year  as reduced because of section 415(b) of the Internal Revenue
  Code. No replacement benefits for any plan year shall be  paid  pursuant

  to  this  subdivision to any beneficiary who is not receiving retirement
  benefits from the retirement system for that plan year.
    (2) Replacement benefits pursuant to this section shall be paid at the
  same  time  and  in the same manner as the retirement benefits which are
  being replaced. At no time shall an eligible  participant  be  permitted
  directly  or  indirectly  to defer compensation under the excess benefit
  plan.
    f. (1) The required employer contributions to the excess benefit  fund
  for  each  plan  year  shall be an amount, as determined by the actuary,
  which is necessary to pay the total amount of replacement benefits  that
  are  payable  pursuant to this section to eligible participants for that
  plan year.
    (2) Such required employer contributions shall be paid into the excess
  benefit fund from an allocation of  the  employer  contribution  amounts
  paid  by the city and other public employers pursuant to sections 13-527
  and 13-528 of this chapter and other applicable provisions of law.  Such
  allocation  of  employer  contribution  amounts  shall  be paid into the
  excess benefit fund at such times and in such amounts as  determined  by
  the actuary.
    (3) The benefit liabilities of the excess benefit plan shall be funded
  on  a  plan  year  to  plan  year basis, provided, however, any employer
  contributions to the  excess  benefit  fund,  including  any  investment
  earnings  on  such  contributions, which are not used to pay replacement
  benefits for the current plan year shall  be  used  to  pay  replacement
  benefits for future plan years.
    g.  The  right  of  an  eligible  participant  to  receive replacement
  benefits pursuant to this section, and the replacement benefits received
  pursuant to this section, shall be exempt from any  state  or  municipal
  tax,  and  shall not be subject to execution, garnishment, attachment or
  any other process whatsoever,  and  shall  be  unassignable,  except  as
  otherwise  specifically  provided for benefits payable by the retirement
  system.