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HomeMy WebLinkAboutResolution No. 5735RESOLUTION NO. 5735 AMENDING THE DEFERRED COMPENSATION PLAN OF THE CITY OF SAN RAFAEL WHEREAS, the City Council of the City of San Rafael adopted a Deferred Compensation Plan for certain employees on November 19, 1973, which established a plan affording those employees a legal opportunity to defer receipt of a portion of their compensation to save and defer both Federal and State income taxes; and WHEREAS, the Revenue Act of 1978 has prescribed additional requirements, conditions and limitations for Deferred Compensation Plans in States and local subdivisions of the States; and WHEREAS, it is necessary to bring the San Rafael Deferred Compensation Plan into conformance with the Revenue Act of 1978 to ensure full qualification of the Plan. NOW, THEREFORE, BE IT RESOLVED, that the City of San Rafael Deferred Compensation Plan, as amended, and as set forth in the attachment hereto, marked Exhibit A, and incorporated herein by reference is approved and adopted. I, JEANNE M. LEONCINI, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the Council of said City on Monday , the sixth , day of August , 1979, by the following vote, to wit: AYES: COUNCILMEMBERS: Breiner, Jensen, Miskimen, Nixon & Mayor Mulryan NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None J WNE M. LEONCINI, City Clerk 27 B/8 CITY OF SAN RAFAEL, CALIFORNIA DEFERRED COMPENSATION PLAN SECTION 1. NAME: The name of this plan is the "City of San Rafael, Calif- ornia Deferred Compensation Plan" (hereinafter referred to as the Plan) . SECTION 2. PURPOSE: The primary purpose of the Plan is to attract and hold key personnel by permitting them to enter into agreements with the City of San Rafael which will provide future payments in lieu of deferred current income upon death, disability, retirement, or other termination of employment with the City of San Rafael, Cal- ifornia. SECTION 3. DEFINITIONS: For the purposes of this Plan, certain words or phrases used herein will have the following meanings: 3.1 "EMPLOYER" shall mean the City of San Rafael, California. 3.2 "EMPLOYEE" shall mean permanent employees, either full- time or part-time working the total number of weekly hours required of his position. 3.3 "PARTICIPANT" shall mean an employee who has elected to participate in the Plan. 3.4 "PARTICIPATION AGREEMENT" shall mean the agreement ex- ecuted and filed by an employee with the employer pursu- ant to SECTION 4, in which the employee elects to became a participant in the Plan. 3.5 "INCLUDIBLE COMPENSATION" shall mean the compensation for service performed for the employer which (taking into account the provisions of Sections 457 and 403(b) of the Internal Revenue Code) is currently includible in gross income. Amounts of compensation shall be determined with- out regard to any community property laws. 3.6 "EMPLOYMENT PERIOD" shall mean any calendar quarter. 3.7 "DISABILITY" means the inability of a participant to en- gage in his usual occupation by reason of a medically de- terminable physical or mental impairment as determined by the employer on the basis of advice from a physician or physicians. SECTION 4. PARTICIPATION IN THE PLAN: 4.1 A Participation Agreement shall be effective for the first employment period following its execution and filing with the employer. The Participation Agreement shall continue from period to period and remain in full force and effect unless terminated as provided in Section 4.2. - 2 - 4.2 A participant may terminate his participation in the Plan, and thereby terminate further deferral of his compensation, by filing with the employer an executed written notice of termination at least 30 days prior to effective date of ter- mination. Once terminated, a former participant cannot re- join the Plan during the employment period in which termi- nation occurred; however, he may elect to became a participant in subsequent employment periods. No amounts shall be payable to an employee upon terminating his participation in the Plan unless otherwise due pursuant to Section 7. 4.3 A participant may select, pursuant to Section 6, one or more investment objectives provided that the amount deferred for each objective equals or exceeds the minimum of not less than $15 per pay period. SECTION 5. DEFERRAL OF OaMPENSATION: 5.1 During each employment period in which an employee is a parti- cipant in the Plan, the employer shall defer payment of such part of his compensation as is specified by the employee in his Participation Agreement provided that, except as provided in Section 5.2, the maximum that each participant may defer under this Plan for any taxable year shall not exceed the lessor of: A. $7,500.00, or B. 33 1/3% of the participant's Includible Ccmpensation. 5.2 The maximum deferral described in Section 5.1 shall not be ap- plicable for one or more of the participant's last three tax- able years ending before the attainment of normal retirement age under this Plan. In that instance, the maximum shall be the lessor of: A. $15,000.00, or B. The sum of (i) The maximum deferral amount established for the pur- poses of Section 5.1 for the taxable year (determined without regard to this Section), plus (ii) So much of the aaximum deferral amount established for the purposes of Section 5.1 for taxable years be- fore the taxable year as has not theretofore been used under Section 5.1 or under this Section. SECTION 6. ADMINISTRATION OF THE PLAN: 6.1 The Plan shall be administered by the employer who, shall have the sole authority to enforce the Plan and shall be responsible for the operation of the Plan in accordance with its terms. The employer shall determine the time, manner, and amount of payments of benefits pursuant to SECTION 7 and shall determine all ques- tions arising out of the administration, interpretation and ap- plication of the Plan, which determinations shall be conclusive and binding on all persons. - 3 - 6.2 The -employer shall establish a deferred compensation fund to which all deferred compensation will be credited at such times as the compensation would have been payable to individual em- ployees if not a participant of the Plan. Separate book ac- counts will be established for each employee participant which will show all amounts of deferred compensation, investments made, shares acquired and earnings and gains on investments. Each book account will be valued at least quarterly on a method as outlined in SECTION 6.3. 6.3 On executing the Participation Agreement, the employee shall designate his investment objective prospectively only. The employer may invest amounts of deferred compensation in mutual fund shares, or interest deposits with a savings and loan can- pany or banking institutions, or investments with a stock bro-, ker, or life insurance and/or fixed/variable annuity contract with an insurance company, whichever in the employer's sole judgement will best achieve the employee's objective. The em- ployee's investment designations are intended to be an expres- sion of mere investment preferences and do not obligate the em- ployer to follow the employee's designations. 6.3 (a) If a mutual fund is selected as the investment vehicle, all dividends and capital gains distributions will be rein- vested in shares of said mutual fund. The total of full or fractional mutual fund shares purchased or acquired through reinvestment shall serve as a basis for measuring the value of the participant's book account. Determination of value will be the total number of full and fractional shares held, times the net asset value per share as shown on the currently effective prospectus of the mutual fund selected. (b) If interest time deposits in local savings and loan or banking institutions is selected as the investment vehicle, interest earnings will be credited to the participant's book account when declared by the institution. 6.4 The employer may, but is not required to, invest deferred compensation at least monthly in the investment vehicles pro- vided for in this plan. All amounts of deferred compensation, whether or not invested by the employer, shall at all times be and remain an asset of the employer. Any and all divi- dends, capital gains distributions, interest or other income payable on any of the employer's investments of deferred con}-- pensation, also shall be an asset of the employer. The e-n- ployer shall have the sole right to vote any shares of stock which it may acquire by such investment. 6.5 Neither this Plan nor any Participation Agreement nor any book account shall be deemed to create a trust or custodial account on behalf of or for the benefit of any participant of the Plan or his beneficiaries. No participant of the Plan, or his bene- ficiaries shall have, by reason of the Plan, Participation Agreement, or book account, any secured or preferred interest in or to any assets of the employer. The employer shall have V only a contractual obligation to pay the benefits due the par- ticipaLnt under the Plan. SECTION 7. DISTRIBUTION OF BENEFITS: 7.1 AT OR AFTER AGE 65: In event of retirement or other termin- ation of employment at or after age sixty-five (65), then the full benefits credited to participant's book account, plus or minus subsequent investment gains or losses, but less any Fed- eral or State income taxes required to be withheld, shall be distributed to him, in cash or in kind, in any one or more of the following ways: 7.1 (a) In a lump sum. 7.1 (b) In monthly or annual installments over a period not to exceed ten (10) years from date distribution began or over a period established by the employer not greater than the life expectancy of the participant. Life expectancy shall be de- termined once by the employer on the date of the initial in- stallment distribution. Installment distributions will be made in substantially equal payments, but no payment shall have a value of less than (the smaller of) $50 or the balance credited to the participant's book account. 7.1 (c) By purchase and distribution of an immediate or deferred nontransferable fixed or variable annuity policy for the life of the member which policy may provide for distribution in installments on the basis of SECTION 7.1 (b), above. 7.1 (d) DISTRIBUTION IN KIND: If the distribution is in kind, the amount distributed shall be the approximate number under the method of distribution chosen of shares used to measure the member's book account. The employer shall select the method of distribution and shall make distri- bution by any of the foregoing methods or combinations thereof. Partici- pants' book account balances.will continue to be invested until, in the em- ployer's sole judgment, cash is to be withdrawn for payment of benefits. Payment of benefits will commence not later than sixty (60) days following termination of employment, provided that in the event of lump sum payment, the employer my elect to make payment not later than the first week of the calendar year succeeding the year of termination of employment. 7.2 DISABILITY: In the event of termination of employment by reason of disability, distribution of benefits will be as provided in SECTION 7.1. 7.3 OTHER. TERMINATION: In the event of termination of employment for reasons other than those specified in SECTIONS 7.1 and 7.2, then the full benefits credited to participant's book account, plus or minus subsequent investment gains or losses, but less any Federal or State income taxes required to be withheld, shall be distributed to him in cash or kind in any one or more of the following ways: - 5 - 7.3 (a) In a lump sum. 7.3 (b) In monthly or annual installments of substantially equal payments over a period not to exceed seven (7) years from date distribution began, but no payment shall have a value or less than (the smaller of) $50 or the balance credited to the parti- cipant's book account. 7.3 (c) Postpone payments under SECTION 7.2, and 7.3 (a), and 7.3 (b) until participant reaches his 50th, 55th, 60th or 65th birthday. 7.3 (d) By purchase and distribution of an immediate or deferred nontransferable fixed or variable annuity policy for the life of the member, which policy may provide for distribution in installments on the basis of SECTION 7.1 (b), above. 7.3 (e) DISTRIBUTION IN KIND: If the distribution is in kind, the amount distributed shall be the approximate number under the method of distribution chosen of shares used to measure the member's book account. The employer shall select the method of distribution and shall make distri- bution by any of the foregoing methods cr combinations thereof. Partici- pant's book account balances will continue to be invested until, in the em- ployer's sole judgment, cash is to be withdrawn for payment of benefits. Payment of lump sums or annual installments shall be made not later than the first week of the calendar year succeeding the year of termination of employment. Payment of benefits under SECTION 7.3 (c) will commence on the first day -of the month following participant's birthday. 7.4 DEATH: In event of the death of any participant, either before or after termination of employment, then the full benefits credited to his book account, less any Federal or State with- holding taxes required by law, shall be distributed to his beneficiaries in the manner designated in the participant's Participation Agreement. The employer shall make payment in lump sums not later than sixty (60) days after death of the participant. 7.5 EMEMYENCY WITHDRAWAL: In the event of serious financial reasons, a participant may apply to the employer for withdrawal of his book account balance prior to his termination of employment. Distribution shall be made as provided in SECTION 7.3 (a). Events permitting early withdrawal will be limited to real emergencies which are beyond the participant's control and which would cause the participant great hardship if early withdrawal were not permitted.. Withdrawals shall be limited to the amount needed to meet the emergency situation. mWlE Examples of such need under the foregoing criteria may be cat- astophic illness, flood, fire, earthquake, death in the family, or disabling injury, or examples of similar importance. With- drawals for expenditures normally budgetable, such as a down - payment on a home, purchase of an automobile, or college ex- penses will not be permitted. Any amount so approved hereunder for withdrawal shall be paid to the participant in a lump sum. The withdrawal shall be effective at the later of the dates specified in the participant's application or the date approved by the employer. SECTION 8. EMPLOYER PARTICIPATION: Notwithstanding any other provision of this Plan, the employer may make additional deposits in the deferred com- pensation fund as additional compensation for the services rendered by the employee to the employer during an employment year up to the maxi- mum deferral permitted in SECTION 5. SECTION 9. NONASSIGNABILITY: Subject to SECTION 10, to the fullest extent per- mitted by law, the interest of a participant in the contractual ob- ligation of the employer established by the Plan, shall not be assign- able in whole or in part directly or by operation of law or otherwise in any manner and no right or interest of a participant in the employ- ers contractual obligation shall be liable for or subject to any obli- gation or liability of such participant. SECTION 10. FACILITY OF PAYMENT: If any participant terminates his employment with an unpaid debt owing to the employer, and neglects or refuses to liquidate the debt by any other means when due and upon demand, the employer shall be entitled to collect the amount due from the deferred compensation owed to the participant under the Plan. The provisions contained herein do not in any way create the right or confer upon the employer the right to loan to or create an obligation which would use this Plan as a means of securing said obligation. SECTION 11. MISCELLANEOUS: 11.1 STATUS OF PARTICIPANTS: Neither the establishment of the Plan nor any modification thereof, nor the establishment of any book account, nor the payment of any benefits, shall be construed as giving to any participant or other person any legal or equitable right against the employer except as herein provided; and, in no event, shall the terms of em- ployment of any employee or participant be modified or in any way affected hereby. 11.2 OONDITION OF PLAN: It is a condition of this Plan and each employee by participating herein, expressly agrees that he shall look solely to the general assets of the employer for the payment of any benefit to which he is entitled under the Plan. 11.3 GOVERNING LAW: This Plan shall be construed, administered and enforced according to the laws of the State of California. - 7 - 11.4 DESIGNATION OF BENEFICIARIES: Each participant shall have the right, by written notice to the employer, to designate bene- ficiaries to receive any benefit to which said participant may be entitled in the event of his death prior to the complete distribution of benefits. If no such designation is in effect on a participant's death, his beneficiary shall be his estate, or, if no executor or administrator is appointed within six (6) months after the participant's death, the employer shall direct said benefits to be paid to one or more of the following: Spouse of the participant, lineal descendants, lineal ancestors, blood relatives. 11.5 EMPLOYER NOT RESPONSIBLE: The employer may, but is not required to, invest funds pursuant to agreements between participants and the employer in accordance with the requests made by each parti- cipant at the time of enrollment or change in enrollment, pros- pectively only. The employer shall retain the right to approve or disapprove such investment requests. Any action by the etm- ployer in investing funds, or approving of any such investment of funds, shall not be considered to be either an endorsement or guarantee of any investment, nor shall it be considered to attest to the financial soundness or the suitability of any investment for the purpose of meeting future obligations as provided in SECTION 7. SECTION 12. AMENDMENT AND TERMINATIONS: 12.1 The employer may at any time and from time to time modify, amend, or terminate the Plan in whole or in part (including retroactive amendments) or cease deferring compensation pursuant to the Plan, by delivering to each participant a written copy of such modifi- cation, amendment or termination or of a notice that it ceases deferring compensation provided, however, the employer shall not have the right to reduce or affect the value of any participant's book account or any rights accrued under the Plan prior to such modification, amendment, termination or cessation. 12.2 The employer may at any time discharge in full its obligation under the Plan to any participant by distributing to any parti- cipant, or, following the death of a participant, to his bene- ficiary, all amounts credited to the participant's book account. 12.3 In the event of the termination of the Plan by the employer, under SECTION 12.1, the value of a participant's or each par- ticipant's book account shall be distributed to the participant or participants or their beneficiaries no later than sixty (60) days after termination of the Plan. The amount, method, and time of payment shall be determined as provided in SECTION 7. I- The employer hereby established Compensation Plan on the terms pensation Plan attached hereto. the City of San Rafael, California, Deferred and conditions set forth in the Deferred Com - DATE: August 6, 1979 (Revised) ATTEST: 47 A/1-8 CITY OF SAN RAFAEL MAYOR