HomeMy WebLinkAboutCC Resolution 10343 (Deferred Comp Plan)RESOLUTION NO. 10343
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
RAFAEL AMENDING THE DEFERRED COMPENSATION PLAN,
EFFECTIVE DECEMBER 21, 1998.
WHEREAS, the City of San Rafael (Employer) has employees currently
participating in a 457 deferred compensation plan administered by FundSelect Advisers
Inc. (FundSelect) and ICMA Retirement Corporation (ICMA), and
WHEREAS, the Employer has employees rendering valuable services; and
WHEREAS, the Employer has established two deferred compensation plans for
such employees that serves the interest of the Employer by enabling it to provide
reasonable retirement security for its employees, by providing increased flexibility in its
personnel management system and by assisting in the attraction and retention of
competent personnel; and
WHEREAS, FundSelect and ICMA are able to administer the deferred
compensation plan for Employer in accordance with the terms of their respective
agreements.
WHEREAS, amendments to the Internal Revenue Code have been enacted that
require changes to the structure of and allow enhancements of the benefits of the
deferred compensation plan;
NOW, THEREFORE, BE IT RESOLVED,
1. The Employer hereby amends and restates the deferred
compensation 457 plan (the "Plan") and adopts the Plan referred to
as Appendix "A".
2. The assets of the Plan shall be held in a Trust/Custodial Fund, with
the Employer or its designated officer appointed as and serving as
Trustee/Custodian, for the exclusive benefit of the Plan participants
and their beneficiaries, and the assets shall not be diverted for any
other purpose. The Employer's beneficial ownership of Plan assets
held in FundSelect and ICMA shall be held for the further exclusive
benefit of the Plan participants and the beneficiaries.
3. The Plan will not permit loans.
4. The Employer hereby agrees to serve as Trustee under the Plan.
5. The City Manager, or his/her designee, is hereby authorized to
execute all necessary agreements with FundSelect and ICMA
incidental to the administration of the Plan and shall do all things
necessary and proper to implement this Resolution.
This Amended and Restated Plan and Trust/Custodial Document adopted by
Employer hereby supersedes and replaces any prior plan applicable to FundSelect and
ICMA.
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 City Council of said City held on Monday, the 21St day of December 1998, by the
following vote to wit:
AYES: COUNCILMEMBERS: Heller, Miller, Phillips and Mayor Boro
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: Cohen
Jeanne M. Leon�iCity,lerk
DEFERRED COMPENSATION PLAN
(Amended and Restated Plan and Trust/Custodial Document)
Section 1. Name: The name of this Plan and Trust/Custodial Document is the City of
San Rafael, State of California, Deferred Compensation Plan, hereinafter referred to as
the "Plan". This Plan is the continuation in restated form of the City of San Rafael
Deferred Compensation Plan previously established by the City of San Rafael City
Council.
Section 2. Purpose: The primary purpose of the Plan is to attract and retain
personnel by permitting them to enter into agreements with the Employer that will
provide for deferral of payment of a portion of their current Compensation until death,
disability, retirement, termination of employment or other events as provided herein, in
accordance with applicable provisions of State law and Section 457 and other
applicable Sections of the Internal Revenue Code. Except as otherwise stated herein,
this amended and restated Plan shall become effective December 21, 1998.
This Plan and Investment and Trust/Custodial Fund is intended to be exempt from
taxation under Section 501(a) of the Internal Revenue Code (Code) and intended to
comply with Section 457(g) of such Code. The Trustees/Custodian shall be
empowered to submit or designate appropriate agents to submit this Plan and
Investment and Trust/Custodial Fund to the Internal Revenue Service for a
determination of the eligibility of the Plan under Section 457, and the exempt status of
the Investment and Trust/Custodial Fund under Section 501(a), if the
Trustees/Custodian conclude that such a determination is desirable.
Section 3. Definitions: For the purposes of this Plan when used and capitalized
herein the following words and phrases shall have the meanings set forth below.
3.1 "Account" means the bookkeeping account maintained for each
Participant reflecting the cumulative amount of the Participant's Deferred
Compensation, including any income, gains, losses or increases or decreases in
market value attributable to the Employer's investment of the Participant's
Deferred Compensation and further reflecting any distributions to the Participant
or the Participant's Beneficiary and any fees or expenses charged against such
Participant's Deferred Compensation.
3.2 "Accounting Date" means each business day that the New York Stock
Exchange is open for trading, as provided in Section 6.6 for valuing the trust's
assets.
3.3 "Administrator" means the service provider or providers with whom the
Employer contracts either investment, recordkeeping or other management
services for the Plan. The Employer may remove any person as Administrator
upon 60 day's advance notice in writing to such person, in which case the
Employer shall name another person or persons to act a Administrator. The
Administrator may resign upon 60 day's advance notice in writing to the
Employer, in which case the Employer shall name another person or persons to
act as Administrator.
3.4 "Beneficiary" means the person or persons a Participant designates to
receive his/her interest under the Plan after the Participant's death, (provided
that a married Participant may designate someone other than his/her spouse as
his/her Beneficiary only with his/her spouse's consent). The designation may be
made, and may be revoked and changed, only by a written instrument (in form
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acceptable to the Employer) signed by the Participant, consented to by the
Participant's spouse, if necessary, and filed with the Employer prior to the
Participant's death, or if no designated Beneficiary survives the Participant,
his/her Beneficiary shall be his/her spouse if he/she is married, or, if not, his/her
estate.
3.5 "Code" means the Internal Revenue Code of 1986, as amended.
3.6 "Compensation" means the total of all amounts of salary or wages which
would be paid by the Employer to or for the benefit of an Employee (if he/she
were not a Participant in the Plan) for services performed during the period that
the Employee is a Participant, including any amounts of Deferred Compensation
that may be credited to the Participant's Account. Compensation shall be taken
into account at its present value and its amount shall be determined without
regard to any community property laws.
3.7 "Trustee/Custodian" means a bank, trust company, financial institution, or
other legally authorized entity appointed by the Employer to have custody of
assets in the Investment and Trust/Custodial Fund.
3.8 "Deferred Compensation" means the amount of Compensation which the
Participant defers pursuant to his/her Participation Agreement in accordance with
the provisions of this Plan.
3.9 "Disability" means the inability of a Participant to engage in his/her usual
occupation by reason of a medically determinable physical or mental impairment
as determined by the Employer on the basis of advice from a physician or
physicians.
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3.10 "Election Period" means the fifty-nine (59) day period after separation
from service with the Employer during which a Participant may elect to defer
commencement of benefit payments under the Plan.
3.11 "Employee" means any officer, employee or elected official of the
Employer, provided, however, that all extra -help or temporary employees and/or
any contract employee whose contract does not provide for participation in the
Plan shall not be "employees".
3.12 "Employer" means the City of San Rafael.
3.13 "Employer Contribution" means the contribution made by the Employer
pursuant to Subsection 5.2 of the Plan.
3.14 "Employment Period" means a period from January 1 through December
31 of the same year, except that the first Employment Period of an Employee
hired on any date other than January 1 shall be the period beginning with the
date of employment and ending on December 31 of the same year.
3.15 "Includible Compensation" means Compensation which (taking into
account the provisions of the Code, including Section 403(b) and Section 457) is
currently includible in gross income for federal income tax purposes. Such term
does not include any amount excludable from gross income under this Plan or
any other plan described in Section 457(b) of the Code or any other amount
excludable from gross income for federal income tax purposes. Includible
Compensation shall be determined without regard to any community property
laws.
3.16 "Investment and Trust/Custodial Fund" means a fund established by the
Employer as a convenient method of setting aside a portion of its assets to meet
its obligations under the Plan, as provided in Subsection 6.1.
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3.17 Joinder Agreement: An agreement entered into between an Employee
and the Employer, including any amendments or modification thereof. Such
agreement shall fix the amount of Deferred Compensation, specify a preference
among the investment alternatives designated by the Employer, designate the
Employee's Beneficiary or Beneficiaries, and incorporate the terms, conditions
and provisions of the Plan by reference.
3.18 "Normal Retirement Age" means the date a Participant attains age 70 Y2
or, at the election of the Participant, any earlier date that is no earlier than the
earliest age at which the Participant has the right to retire under the Marin
County Employee Retirement System and to receive immediate retirement
benefits calculated without actuarial reduction, but in any event not later than the
date or age at which the Participant separates from service with the Employer. If
a Participant is employed by the Employer beyond age 70 Y2 , his/her Normal
Retirement Age may be the age at which he separates from service with the
Employer; provided that the distribution requirements of Subsection 7.5 are still
satisfied with respect to the Participant, and provided further that a Participant
who has utilized the catch-up deferral provisions of Subsection 5.3(b) may not
thereafter change his/her Normal Retirement Age.
3.19 "Participant" means any Employee who fulfills the participation
requirements under Section 4.
3.20 "Participation Agreement" means the agreement executed and filed by an
Employee with the Employer pursuant to Section 4, under which the Employee
elects to become a Participant in the Plan and to defer Compensation
thereunder.
3.21 "Plan Year" means the calendar year.
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3.22 "Retirement" means the first date upon which both of the following shall
have occurred with respect to a Participant: Separation from Service and
attainment of age 65.
3.23 "Separation From Service" means severance of the Participant's
employment with the Employer which constitutes a "separation from service"
within the meaning of Section 402(d)(4)(A)(iii) of the Code. In general, a
Participant shall be deemed to have severed his employment with the Employer
for purposes of this Plan when, in accordance with the established practices of
the Employer, the employment relationship is considered to have actually
terminated.
3.24 "Trust" means all compensation deferred under the Plan, plus any
income and gains thereon, less any losses, expenses and distributions to
Participants and Beneficiaries.
Section 4. Participation in the Plan:
4.1 Participation: Each Employee may elect to become a Participant in the
Plan and defer payment of Compensation not yet earned by executing a written
Participation Agreement and filing it with the Employer at any time during active
employment with the Employer. Compensation shall be deferred for any
calendar month only if a Participation Agreement providing for such deferral has
been entered into and is effective before the beginning of such month.
4.2 Modification of Deferral: A Participation Agreement shall remain in effect
until it is terminated or modified. A Participant may modify an existing
Participation Agreement to effect subsequent deferrals in accordance with rules
established by the Employer. Such modification must be filed by the Participant
with the Employer prior to the beginning of the month for which the modification
is to be effective.
4.3 Termination of Deferral: A Participant may terminate further deferral of
Compensation under the Plan effective at the beginning of any month by filing
with the Employer an executed notice of termination of his/her Participation
Agreement prior to the effective date of termination. Once further deferral of
Compensation is terminated, a Participant may rejoin the Plan in accordance
with rules established by the Employer. No previously deferred amounts shall be
payable to an Employee upon terminating further deferral of Compensation
under the Plan unless otherwise due pursuant to Section 7 hereof.
4.4 Selection of Investment Options: The Participation Agreement shall also
provide for the selection, pursuant to Subsection 6.5, of one (1) or more
investment options in the Investment and Trust/Custodial Fund to which the
Participant's Deferred Compensation shall be allocated; provided that any
amounts so allocated equal or exceed a minimum of ten dollars ($10.00) per pay
period. The Employer shall invest the Participant's deferrals in accordance with
such selection.
Section 5. Amount of Deferrals and Deferral of Compensation
5.1 Deferral of Compensation: During each Employment Period in which an
Employee is a Participant in the Plan, the Employer shall defer payment of such
part of the Participant's Compensation as is specified by the Participant in the
Participation Agreement which the Participant has executed and filed with the
Employer.
5.2 Employer Contribution: During each Employment Period in which an
Employee is a Participant in the Plan, the Employer may make an Employer
Contribution to the Participant's Account equal to the percentage of the
Participant's Compensation specified by resolution or labor contract approved by
the Employer.
5.3 Limitation: The amount of Compensation which may be deferred by a
Participant and the amount of Employer Contributions, if any, made to a
Participant's Account are subject to the following limitations:
a) Annual Limitation: Except as provided in Paragraph (b) below, the
maximum amount that a Participant may defer during an Employment
Period, when added to the amount of any Employer Contribution for such
Participant during the Employment Period, shall not exceed the lesser of
(1) eight thousand dollars ($8,000), as may be adjusted for cost -of -living
by the Secretary of the Treasury or (2) 33 1/3% of the Participant's
Includible Compensation. The minimum amount that a Participant may
defer is ten dollars ($1 0.00) per pay period.
b) Catch -Up Deferrals: For one or more of a Participant's last three
Employment Periods ending before the Participant attains Normal
Retirement Age, the maximum amount a Participant may defer during the
Employment Period, when added to the amount of any Employer
Contribution for such Participant during the Employment Period
established in Paragraph (a) above, plus so much of such maximum
amounts determined under such Paragraph (a) for Employment Periods
beginning after December 31, 1978, but before the current Employment
Period in which the Participant was eligible to participate in the Plan (or in
another eligible deferred compensation plan under Section 457(b) of the
Code) less the amount of compensation actually deferred under such
Paragraph (a) for such prior Employment Periods shall not exceed fifteen
thousand dollars ($15,000) per each of such three Employment Periods.
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The provisions of this Paragraph (b) shall not apply more than once to
each Participant.
c) Aggregation of Plans: In applying Paragraphs (a) and (b) above,
the amount that may be deferred by a Participant under the Plan for any
employment Period shall be reduced by:
(i) the amount deferred by the Participant for such Employment
Period under any other eligible deferred compensation plan under
Section 457(b) of the Code,
(ii) any Employment Period under Section 403(b) of the Code,
(iii) any amount excluded from the Participant's gross income for
such Employment Period under Section 402(a)(8) or Section
402(h)(B) of the Code, and
(iv) any amount with respect to which a deduction is allowable
for such Employment Period by reason of a contribution on behalf
of the Participant to an organization described in Section 501(C)(1
8) of the Code.
The Participant shall inform the Employer of his/her participation in any of
the above listed plans and is solely responsible for any violation of this
Paragraph (c) above.
Section 6 Investment and Trust/Custodial Fund Provisions:
6.1 Investment of Deferred Compensation: A trust is hereby created to hold
all the assets of the Plan for the exclusive benefit of Participants and
Beneficiaries, except that expenses and taxes may be paid from the Trust as
provided in Section 6.3. The Trustee shall be the Employer or such other person
which agrees to act in that capacity hereunder.
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6.2 Investment Powers: The Trustee or the Plan Administrator acting as
agent for the trustee, shall have the power listed in this Section 6.2 with respect
to investment of Trust assets, except to the extent that the investment of Trust
assets is directed by Participants, pursuant to Section 6.5. Trustee shall have the
power:
a) To invest and reinvest the Trust without distinction between
principal and income in any form of tangible or intangible property, real
personal, or mixed, and wherever situated, including, but not by way of
limitation, common or preferred stocks, shares of regulated investment
companies and other mutual funds, bonds, loans, notes, debentures,
mortgages, certificates of deposit, interest, or participation, equipment
trust certificates, commercial paper including but not limited to
participation in pooled commercial paper accounts, contracts with
insurance companies including but not limited to insurance, individual or
group annuity, deposit administration, and guaranteed interest contracts,
deposits at reasonable rates of interest at banking institutions including
but not limited to savings accounts and certificates of deposit, and other
forms of securities or investments of any kind, class, or character
whatsoever and representing interests in any form of enterprise, wherever
it may be located, organized or operated within or without the United
States of America, whether such investments are income producing or
not, without being limited in any respect by statute or court rule or decision
of any jurisdiction now or hereafter in force purporting to limit or otherwise
affect such investments. Assets of the Trust may be invested in securities
or new ventures that involve a higher degree of risk than investments that
have demonstrated their investment performance over an extended period
of time.
b) To invest and reinvest all or any part of the assets of the Trust in
any common, collective or commingled trust fund that is maintained by a
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bank or other institution and that is available to Employee plans described
under Sections 457 or 401 of the Code, or any successor provisions
thereto, and during the period of time that an investment through any such
medium shall exist, to the extent of the participation of the Plan, the
declaration of trust of such common, collective or commingled trust funds
shall constitute a part of this Plan.
c) To invest and reinvest all or any part of the assets of the Trust in
any group annuity, deposit administration or guaranteed interest contract
issued by an insurance company or other financial institution on a
commingled or collective basis with the assets of any other 457 plan or
trust qualified under Section 401(a) or any other plan described in Section
401(a)(24) of the Code, and such contract may be held or issued in the
name of the Plan Administrator, or such custodian as the Plan
Administrator may appoint, as agent and nominee for the Employer.
During the period that an investment through any such contract shall exist,
to the extent of participation of the Plan, the terms and conditions of such
contract shall constitute a part of the Plan.
d) To hold cash awaiting investment and to keep such portion of the
Trust in cash or cash balances, without liability for interest, in such
amounts as may from time to time be deemed to be reasonable and
necessary to meet obligations under the Plan or otherwise to be in the
best interests of the Plan.
e) To vote or to refrain from voting any stocks, bonds or other
securities held in the Trust, to exercise any other right appurtenant to any
securities or other property held in the Trust, to give general or special
proxies or powers of attorney with or without power of substitution with
respect to such securities and other property, to exercise any conversion
privileges, subscription rights, or other options or privileges with respect to
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such securities and other property and make any payments incidental
thereto, and generally to exercise, personally or by general or limited
power of attorney, any of the powers of an owner with respect to stocks,
bonds securities, or other property held in the Trust at any time.
f) To oppose or to consent to and participate in any organization,
reorganization, consolidation, merger, combination, readjustment of
finances, or similar arrangement with respect to any corporation,
company, or association, any of the securities of which are held in the
Trust, to do any act with reference thereto, including the exercise of
options, the making of agreements or subscriptions and the payment of
expenses, assessments, or subscriptions that may be deemed necessary
or advisable in connection therewith, and to accept, hold, and retain any
securities or other property that may be so acquired.
g) To hold, to authorize the holding of, and to register any investment
to the Trust in the name of the Plan, the Employer, or any nominee or
agent of any of the foregoing, including the Plan Administrator, or in
bearer form, to deposit or arrange for the deposit of securities in a
qualified central depository even though, when so deposited, such
securities may be merged and held in bulk in the name of the nominee of
such depository with other securities deposited therein.
h) Upon such terms as may be deemed advisable by the Employer or
the Plan Administrator, as the case may be, for the protection of the
interest of the Plan or for the preservation of the value of an investment,
to exercise and enforce by suit for legal or equitable remedies or by other
action with the Employer's authorization, or to waive any right or claim on
behalf of the Plan or any default in any obligation owing to the Plan, to
renew, extend the time for payment of, agree to a reduction in the rate of
interest on, or agree to any other modification or change in the terms of
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any obligation owing to the Plan, to settle, comprise, adjust or submit to
arbitration any claim or right in favor of or against the Plan, to exercise
and enforce any and all rights of foreclosure, bid for property in
foreclosure, and take a deed in lieu of foreclosure with or without paying
consideration therefore, to commence or defend suits or other legal
proceedings whenever any interest of the Plan requires it, and to
represent the Plan in all suits or legal proceedings in any court of law or
equity or before any body or tribunal.
i) To employ suitable consultants, depositories, agents and legal
counsel on behalf of the plan.
j) To open and maintain any bank account or accounts in the name of
the Plan, the Employer, or any nominee or agent of the foregoing,
including the Plan Administrator, in any bank or banks.
k) To do any and all other acts that may be deemed necessary to
carry out any of the powers set forth herein and under applicable state
and federal laws.
6.3 Taxes and Expenses: All taxes of any kinds whatsoever that may be
levied or assessed under existing or future laws upon, or in respect to the Trust,
or the income thereof, and all commissions or acquisitions or dispositions of
securities and similar expenses of investment and reinvestment of the Trust,
shall be paid from the Trust. Such reasonable compensation of the Plan
Administrator, as may be agreed upon from time to time by the Employer and the
Plan Administrator, and reimbursement for reasonable expenses incurred by the
Plan Administrator in performance of its duties hereunder (including but not
limited to fees for legal, accounting, investment and custodial services) shall also
be paid from the Trust.
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6.4 Payment of Benefits: The payment of benefits from the Trust in
accordance with the terms of the Plan may be made by the Plan Administrator,
or by any custodian or other person so authorized by the Employer to make such
disbursement. The Plan Administrator, custodian or other person shall not be
liable with respect to any distribution of Trust assets made at the direction of the
Employer.
6.5 Investment Funds: In accordance with uniform and nondiscriminatory
rules established by the Employer and the Plan Administrator, the Participant
may direct his/her Accounts to be invested in one (1) or more investment funds
available under the Plan; provided, however, that the Participant's investment
directions shall not violate any investment restrictions established by the
Employer. Neither the Employer, the Administrator, nor any other person shall
be liable for any losses incurred by virtue of following such directions or with any
reasonable administrative delay in implementing such direction.
The Plan Administrator or the Employer shall adopt various investment options
for the investment of deferred amounts by Participants or their Beneficiaries, and
shall monitor and evaluate the appropriateness of continued offering by the Plan.
The Trustees/Custodian or the Employer may determine which options are no
longer appropriate for offering. In adopting or removing such options, the
Trustees/Custodian or Employer, the Participants or their Beneficiaries shall be
entitled to select from among the available options for investment of their
deferred amounts. In the event options are removed from the active list, the
Trustees/Custodian or Employer may require Participants to move balances to
an alternative option offered by the Plan. If any Participants fail to act in
response to the written notice, the Trustees/Custodian or Employer shall transfer
monies out of the ineligible investment option to an alternative option chosen by
the Trustees/Custodian or Employer. By exercising such right to select
investment options or by failing to respond to notice to transfer from a removed
option where the Trustees/Custodian or Employer move the monies on behalf of
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such Participants, the Participants and their Beneficiaries agree that none of the
Plan fiduciaries will be liable for any investment losses, or lost investment
opportunity in situations where monies are moved by Trustees/Custodian or
Employer, that are experienced by a Participant or Beneficiary in the investment
options(s) they select or are selected from them if they fail to take appropriate
action in regard to a no longer available fund.
6.6 Valuation of Accounts: As of each Accounting Date, the Plan assets held
in each investment fund offered shall be valued at fair market and the investment
income and gains or losses shall be determined. Such investment income and
gains or losses shall be allocated proportionately among all Account balances on
a fund -by -fund basis. The allocation shall be in the proportion that each such
Account balance as of the immediately preceding Accounting Dates bears to the
total of all such Accounting Date. For purposes of this Section, all Account
balances include the Account balances of all Participants and Beneficiaries.
6.7 Crediting of Accounts: The Participant's Account shall reflect the amount
and value of the investments or other property obtained by the Employer through
the investment of the Participant's Deferred Compensation pursuant to Sections
6.5 and 6.6. It is anticipated that the Employer's investments with respect to a
Participant will conform to the investment preference specified in the Participant's
Joinder Agreement, but nothing here shall be construed to require the Employer
to make any particular investment of a Participant's Deferred Compensation.
Each Participant shall receive periodic reports, not less frequently than annually,
showing the then current value of his/her Account.
6.8 Employer Liability: In no event shall the Employer's liability to pay benefits
to a Participant under this Plan exceed the value of the amounts credited to the
Participant's Account; neither the Employer nor the Administrator shall be liable
for losses arising from depreciation or shrinkage in the value of any investments
acquired under this Plan.
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Section 7 Distribution of Benefits
7.1 Payments on Separation from Service: Subject to the provisions of
Subsection 7.5, upon a Participants Separation from Service with the Employer
for any reason (including disability), the entire amount credited to his/her Account
(less any federal, state or local income tax required to be withheld therefrom)
shall be paid to him in a single lump sum immediately after the expiration of the
Election Period; provided, however, that during such Election Period a
Participant (including a Participant who has utilized the catchup deferral
provisions of Subsection 5.3(b) with an Account balance in excess of an amount
specified by the Employer, which amount shall not exceed the amount specified
in Section 457(e)(9)(A) of the Code, as the same may be adjusted from time -to -
time, may irrevocably elect in writing (on a form acceptable to the Employer) a
specific later date for first receiving payment under the Plan. In addition, a
Participant may elect a different method of payment as provided in Subsection
7.2 by filing the appropriate form with the Employer no later than sixty (60) days
prior to the Participant's elected payment date. The Account balance of a
Participant with less than the amount specified by the Employer in his/her
Account at the time of his/her separation from service shall be paid in a single
lump sum to the Participant (less applicable taxes) as soon as practicable
following his/her separation from service.
A Participant who has elected a specific later date for the first receiving a
payment under the Plan, as set forth above, may elect to further defer the date
upon which such payment(s) will begin. Such election to further defer payment
may be made only once, to a later date, as long as payments have not yet begun
when such election is made.
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7.2 Optional Forms of Benefit Payments: Subject to the provisions of Section
7.5, as an alternative to payment in a lump sum, a Participant whose Account
balance exceeds the amount specified by the Employer under Subsection 7.1
above, may elect to receive payment under the Plan as follows:
a) Equal monthly, quarterly, semi-annual or annual payments in an
amount chosen by the Participant, continuing until his/her Account is
exhausted.
b) Approximately equal monthly, quarterly, semi-annual or annual
payments, calculated to continue for a period certain chosen by the
Participant.
c) Annual Payments equal to the minimum distributions required
under Section 401(a)(9) of the Code over the life expectancy of the
Participant or over the life expectancies of the Participant and his
Beneficiary.
d) Payments equal to payments made by the issuer of a retirement
annuity policy acquired by the Employer.
e) A split distribution under which payments under options (a), (b) or
(d) commence or are made at the same time, as elected by the Participant
under Section 7.1, provided that all payments commence (or are made)
by the latest benefit commencement date under Section 7.5 and that once
a payment is made subsequent payments will be made in substantially
non -increasing amounts.
f) Any payment option elected by the Participant and agreed to by the
Employer and Administrator, provided that such option must provide for
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substantially nonincreasing payments for any period after the benefit
commencement date under Section 7.1.
7.3 Emergency Withdrawals: Except as otherwise provided in Subsection 7.5
distributions to or on behalf of a Participant shall be made only in the event of
his/her separation from service with the Employer, unless such Participant
experiences an unforeseeable emergency. "Unforeseeable emergency" means
a severe financial hardship to the Participant resulting from:
a) A sudden and unexpected illness or accident of the Participant or a
dependent of the Participant as defined in Section 152(a) of the Code,
b) the Participant's loss of property due to casualty, or
c) other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.
Examples of events which may cause an "unforeseeable emergency" are
catastrophic illness, flood, fire, earthquake, death in the family or disabling
injury. Withdrawals will not be permitted for expenditures normally
budgetable, such as a down payment on a home, purchase of an
automobile or educational expenses. Withdrawals will not be allowed to
the extent that the hardship may be relieved:
(i) through reimbursement or compensation by insurance or
otherwise,
(ii) by liquidation of the Participant's assets (to the extent such
liquidation would not itself cause severe financial hardship), or
(iii) by cessation or temporary suspension of deferrals under the
Plan.
is
Withdrawals of amounts because of an unforeseeable emergency will be
permitted only to the extent reasonable needed to satisfy the emergency.
Former Employees who have not yet received distribution of their entire
Account balances shall also be eligible for emergency withdrawals under
the same conditions as active Participants. A Participant or former
Employee who experiences such an unforeseeable emergency may apply
to the Employer for a withdrawal which shall be permitted at the discretion
of the Employer, only to the extent it complies with the requirements of
this Subsection 7.3. Any amount approved hereunder for emergency
withdrawal shall be paid to the Participant in a single lump sum (less any
applicable withholding taxes). The withdrawal shall be effective at the
later of the date specified in the Participant's application or the date
approved by the Employer.
7.4 Payments on the Death of a Participant
a) Death After Benefit Commencement: If the Participant dies after
having begun to receive installment payments in accordance with Section
7.2, payment of the remainder of such scheduled payments shall be
suspended for a period of sixty (60) days after the Participant's death.
During each sixty (60) day suspension period, the Beneficiary of such
Participant may elect, subject to the distribution requirements of
Subsection 7.5, to receive the balance then credited to the Participant's
Account in a single lump sum or in installments as specified under Section
7.2, provided that the Participant's Account will be distributed to the
Beneficiary at least as rapidly as under the method of distribution being
used prior to the Participant's death. If no such election is made by the
Beneficiary by the end of the sixty (60) day suspension period, the
remaining installment payments selected by the Participant (adjusted, if
necessary, to comply with the distribution requirements of Subsection 7.5)
shall be paid to the Beneficiary.
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b) Death Prior to Benefit Commencement: Subject to the provisions of
Section 7.5, if the Participant dies before distribution of his/her Account
commences, his/her Beneficiary shall receive distribution of such
Participant's Account as provided under Section 7.1, treating the
Beneficiary as if he/she were the Participant; provided, however, that if the
Beneficiary elects installment payments, the Participant's entire Account
shall be distributed over a period not to exceed fifteen (15) years (or the
life expectancy of the Participant's surviving spouse, if such spouse is the
Participant's Beneficiary).
7.5 Provisions Required Pursuant to Code Section 401 (a)(9)
a) Timing and Amount of Required Distributions
1) Notwithstanding any of the foregoing, distribution of a
Participant's entire Account shall commence not later than April I
following the calendar year in which he attains age 70 '/2, whether
or not the Participant has separated from service with the
Employer. Unless the form of distribution is a single lump sum
payment, distributions shall be made over a period not exceeding
the life expectancy of the Participant, or the joint life expectancy of
the Participant and his/her Beneficiary.
2) If the Participant's entire Account is to be distributed in a
form other than a single lump sum payment, then the amount to be
distributed each year must be at least an amount equal to the
quotient obtained by dividing the Participant's entire Account
balance (determined as of the last valuation date of the preceding
calendar year) by the life expectancy of the Participant or (if
applicable) the joint life expectancy of the Participant and his/her
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designated Beneficiary. Life expectancy and joint life expectancy
shall be computed by the use of the return multiples contained in
Section 1.72-9 of the Treasury Regulations.
b) Distribution After Death
1) If the Participant dies after having begun to receive
installment payments in accordance with Subsection 7.2, the
remaining portion of such Participant's Account shall continue to be
distributed at least as rapidly as under the method of distribution
being used prior to the Participant's death.
2) If the Participant dies before distribution of his/her Account
commences, the Participant's entire Account shall be distributed in
one of the distribution options provided under Subsections 7.1 and
7.2 no later than December 31 of the calendar year which contains
the fifth anniversary of the Participant's death except; (i) that if the
beneficiary is not the Participant's spouse, and such non -spousal
beneficiary elects to commence distribution by December 31, of the
year following the year the Participant died, such non -spousal
beneficiary may elect a periodic payment not exceeding fifteen (15)
years, as set forth in Section 7.4(b) above, or (ii) that if the
designated Beneficiary is the Participant's surviving spouse, such
spouse may elect to receive distribution of the Participant's entire
Account in substantially equal monthly, quarterly, semiannual or
annual installment payments over the life expectancy of the
surviving spouse. Such distributions are required to commence on
or before the later of (i) December 31 of the calendar year
immediately following the year in which the Participant would have
attained age 70'/2. If the spouse dies before such payments begin,
subsequent distributions shall be made as if the spouse had been
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the Participant. For purposes of this subparagraph, payments will
be calculated by use of the return multiples specified in Section
1.72-9 of the Treasury Regulations.
c) Interpretation: The provisions of the Subsection 7.5 shall override
any distribution options in the Plan that are inconsistent with this
Subsection. All distributions under the Plan shall be made in accordance
with Treasury Regulations issued under Section 401(a)(9) of the Code.
The provisions of this Subsection shall be effective as of January 1, 1989.
7.6 Effect of Reemployment: If a Participant who separates from service
again becomes an Employee, no distributions shall be made or continued to the
Participant while he/she is so employed. Any amounts which the Participant was
entitled to receive on his/her prior separation from service shall be held until the
Participant or his/her Beneficiary is again entitled to a distribution under the
terms of the Plan.
7.7 De Minimus Distributions: Notwithstanding any other provision of the
Plan, if the Participant has not deferred any amount for a two (2) year period and
the total amount of the Participant's Account under the Plan does not exceed five
thousand dollars ($5,000), a Participant may elect to receive, or the Plan may
elect to distribute without the Participant's consent, the entire value of the
Participant's Account in a lump sum distribution. No subsequent distribution
under this provisions of such Participant may be made, once such distribution
occurs.
Section 8 Nonassignability: The interest of a Participant in the contractual obligation
of the Employer, establish by the Plan, shall not be assignable in whole or in part,
directly or by operation of law or otherwise, in any manner.
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Section 9 Miscellaneous:
9.1 No Effect on Employment: Neither the establishment of the Plan nor any
modification thereof, nor the establishment of an Account, nor any agreement
between the Employer and the Custodian, 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 employment of the Employee or Participant be modified or in any way
affected hereby.
9.2 Construction: This Plan shall be construed, administered and enforced
according to the Constitution and laws of the State of California.
9.3 Plan -to -Plan Transfers: Plan -to -plan transfers shall be permitted as
follows:
a) Transfers from Plan: To the extent and in the manner permitted
under Section 457(e)(10) of the Code and the Treasury Regulations
thereunder, the balance in the Account of Participant who is no longer an
Employee and who subsequently becomes a participant in another eligible
deferred compensation plan under Section 457(b) of the Code shall be
transferred to his/her account in the plan of his/her new employer;
provided that such plan provides for the receipt of such transferred
amounts. If a Participant's Account has been transferred to such plan, the
Participant shall not be entitled to receive any benefit under this Plan,
notwithstanding anything in this Plan to the contrary.
b) Transfers to Plan: If prior to becoming an Employee, an individual
participated in another eligible deferred compensation plan under Section
457(b) of the Code, the Employer may in its discretion accept transfer of
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any amount credited to the deferred compensation account of such
Employee under that plan and, in the event of such transfer, shall
establish for the Employee an Account under the Plan to which such
amount shall be treated as an amount deferred under and subject to the
terms of the Plan, except that no amount so transferred will be taken into
account in applying the deferral limitations set forth in Subsection 5.1.
Section 10 Amendment and Termination
10.1 Amendment and Termination: The Employer may at anytime and from
time to time by action of its governing or appointing board as evidenced by an
instrument in writing duly executed by the Employer modify, amend, suspend, or
terminate the Plan in whole or in part (including retroactive amendments) or
cease deferring Compensation pursuant to the Plan for some or all Participants.
In the event of such an action, the Employer shall deliver to each affected
Participant a notice of such modification, amendment or termination or a notice
that it shall cease deferring Compensation; provided, however, that the Employer
shall not have the right to reduce or affect the value of any Participant's Account
or any rights accrued under the Plan prior to such modification, amendment,
termination or cessation.
10.2 Interpretation: This Plan is intended to qualify as an eligible deferred
compensation plan under Section 457 of the Code, and shall be interpreted and
administered in a manner consistent with such qualification. The Employer
reserved the right to amend the Plan to the extent that it may be necessary to
conform the Plan to the requirements of Section 457 of the Code and any other
applicable law, regulation or ruling, including amendments that are retroactive to
the effective date of the Plan. In the event that the Plan is deemed by the
Internal Revenue Service to be administered in a manner inconsistent with
Section 457 of the Code, the Employer shall correct such administration within
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the period provided in Section 457 of the Code. The Employer reserves the right
to take such action and to such things as are required to make the Plan, as
administered, consistent with Section 457 of the Code.
Section 11 Plan Administration
11.1 Administration: The Plan shall be maintained by the Employer, which may
recommend rules and regulations for the administration of the Plan consistent
with the terms of the Plan. All rules and regulations recommended by the
Employer shall be final and conclusive upon adoption by resolution of the City
Council of the Employer.
11.2 Powers: The Employer shall have all powers to perform all duties
necessary to exercise its functions including, but not limited to, the:
a) Determination of Employee's eligibility, participation and benefits
under the Plan;
b) Establishment and maintenance of written records showing at any
time the interest of a Participant in his/her book Account;
c) Interpretation and construction of the provisions of the Plan;
d) Direction of the Employer (or the Trustee/Custodian on behalf of
the Employer) to make disbursement of benefits under the Plan;
e) Appointment of such agents, advisors, counselors and delegates
including an Administrator as may be necessary and appropriate for the
administration and operation of this Plan and the delegation to such
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agent, advisors, counselors and delegates of any of its discretionary and
ministerial powers and duties in accordance with this Section; and
f) Composition of any provision to Participants of all forms as
described in this Plan.
11.3 Revocability of Administrative Action: Any action taken by the Employer
with respect to the rights or benefits under the Plan of any person shall be
revocable by the Employer as to payments or distributions not therefore made
pursuant to such actions and appropriate adjustments may be made in future
payments or distributions to a Participant or Beneficiary to offset any excess
payment or underpayment theretofore made to such Participant or Beneficiary.
Section 12 Gender and Number: The masculine pronoun, whenever used herein,
shall include the feminine pronoun, and the singular shall include the plural, except
where the context requires otherwise.
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