The governing body of all cities of the first class, maintaining an organized police department and a fire department, shall establish, maintain and fund a separate pension fund for each department, which shall be set aside and used exclusively for the payment of pensions and disability benefits as authorized in Kan. Stat. Ann. § 13-14a01 et seq., and amendments thereto. Whenever the amount of any benefit is to be determined on the basis of actuarial assumptions, the assumptions shall be specified in a way that precludes employer discretion. Each such pension fund shall be maintained and funded in accordance with the minimum funding standards prescribed in Kan. Stat. Ann. § 12-5002, and amendments thereto. For the purpose of creating, maintaining and funding such pension funds, the governing body of each city of first class is hereby authorized and shall:

(a) Accept gifts, grants, bequests, gratuities or any other money and credit the same to the pension fund designated by the donor;

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(b) levy an assessment against each officer and member of each department equal to 7% of such officer’s or member’s monthly salary or compensation, such assessment amount to be deducted from the regular payroll and to be transferred into such pension fund;

(c) place into such funds the proceeds of all lost or stolen securities, money or personal property which remains unclaimed in possession of any department of the city for six months, together with the proceeds of all unclaimed or confiscated property of any nature which has been in custody of the police department for a period of six months. The city is authorized to sell at public auction such property and place the proceeds into such pension funds in equal shares;

(d) transfer into such pension funds the unencumbered balance, including investments, in any existing pension fund or funds, except that if there is more than one pension fund existing in such city, then each of such existing funds, other than the firemen’s and policemen’s relief funds, shall be transferred into the new pension fund of a like classification. Upon the termination of any pension fund or funds, the rights of members to benefits accrued at the date of termination to the extent funded or to the amount in members’ accounts at the date of termination are nonforfeitable;

(e) carry forward the balance in such funds at the close of each budget year as revenue for the next ensuing year;

(f) levy annually at the time for the levying of taxes for city purposes, a tax upon all of the taxable tangible property in such city for each pension fund to make annual contributions to each pension fund as required under Kan. Stat. Ann. § 12-5002, and amendments thereto, and to maintain and fund each pension fund on an actuarial reserve basis in accordance with the provisions of Kan. Stat. Ann. § 13-14a05, and amendments thereto. In lieu of levying the tax authorized in this section, the annual contribution required of the city may be paid from any employee benefits contribution fund established pursuant to Kan. Stat. Ann. § 12-16,102, and amendments thereto; and

(g) administer such funds in the manner required to satisfy the applicable qualification requirements for governmental plans as specified in the federal internal revenue code of 1954 or 1986, as in effect on July 1, 2008, and as applicable for a governmental plan in accordance with the provisions of Kan. Stat. Ann. § 74-49,123, and amendments thereto.