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HomeMy WebLinkAboutCity Council - 6336 RESOLUTION NO. 6336 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH UPDATING AN EMPLOYEES' DEFERRED COMPENSATION PLAN AND AUTHORIZING ITS IMPLEMENTATION WHEREAS, the City of Huntington Beach, as an incentive to retain existing personnel and attract qualified personnel to employment with the City, is desirous of updating and implementing a Deferred Compensation Plan enabling employees to defer a portion of their income pursuant to such plan, NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington Beach that the City of Huntington Beach Deferred Compensation Plan attached to this resolution, marked "Exhibit A" , and by reference incorporated herein, is hereby adopted. BE IT FURTHER RESOLVED that the mode of investment of the funds must be approved by the City Treasurer or his designee and that the Deputy City Administrator/Administrative Services is authorized to implement said plan; and the City of Huntington Beach consents to the plan and assumes the obligations to be performed on its part as set forth in said plan; and That the updated plan shall be operative immediately; and That at the end of each calendar year the City shall prepare a financial statement of the amount of employee compensation deferred pursuant to said plan and the types of investments held under such plan. - 1 - PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 2nd day of December 1991. Mayor ATTEST: APPROVED AS TO FORM: City Clerk Cit me REVIEWED AND APPROVED: TE A ED: i Administrator erect Adm' nistr ive Services 1 - 2 - 6336 EXHIBIT "A" CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, California 92648 DEFERRED COMPENSATION PLAN The City of Huntington Beach, California hereby revises and amends the City of Huntington Beach, California, Deferred Compensation Plan for its Employees (hereinafter called the Plan) . The Plan consists of the provisions set forth in this document and is applicable to each employee who adopts the Plan. The Plan is effective as to each such employee upon the date he/she becomes a "Participant" by signing and filing with the Plan Administrator the Participation Agreement herein referred in Article V. ARTICLE I PURPOSE 1. 1 The purpose of this Plan is to allow Employees to defer a portion of their compensation to a future time. Such compensation will be withheld by the Employer each pay period and will be invested in the manner allowed. 1. 2 Amounts Deferred under this Plan are excludable from gross income for federal and state tax purposes, until they are paid or otherwise made available to the Participant or a Beneficiary. 1 .3 Participation in this Plan shall not be considered as an employment contract between the Employer and the Employee nor as giving the Employee any right to continued employment . ARTICLE II DEFINITIONS 2 . 1 Whenever used in this Plan, the following capitalized words and phrases shall have the meanings set forth below, unless a different context is clearly expressed: (a) AMOUNTS DEFERRED means compensation withheld under this Plan, plus any income resulting from the investment of the compensation withheld. (b) BENEFICIARY means a person designated by a Participant, a Participant' s estate, or any person, whose rights under this Plan are derived as a result of the Participant ' s death. - 1 - 6336 (c) THE COMMITTEE means persons appointed by the Plan Administrator to assist and advise the administrator of this plan. (d) EMPLOYEE means any person who is eligible to participate in the Employees ' Retirement System, including a vested independent contractor. (e) EMPLOYER means the City of Huntington Beach, California . (f) NORMAL RETIREMENT AGE means any age, at the option of the Participant, that is within the range of ages (1) beginning no earlier than the earliest age at which the participant has the right to retire under the Employee ' s Retirement System and to receive immediate benefits and (2) ending no later than age 70-1/2 . However, if a participant continues to work beyond the specified ages, Normal Retirement Age shall be the date or age designated by the Participant, which shall not be later than the mandatory retirement age applicable to the Participant or the date the Participant separates from service with the Employer. (g) PARTICIPANT means an Employee, as defined, who enters into a written agreement with the respective Employer to defer compensation under this Plan. (h) PLAN ADMINISTRATOR shall mean the Deputy City Administrator/Administrative Services. (i) CODE means Internal Revenue Code of the United States . 2 .2 The plural shall include the singular and the singular shall include the plural, unless the context clearly indicates the contrary. ARTICLE III ADMINISTRATION 3 . 1 The mode of investment of the funds must be approved by the City Treasurer or his designee. 3 .2 This Plan shall be administered by the Plan Administrator who shall represent the Employer in all matters concerning the administration of this Plan. 3 . 3 The Committee may engage services, as necessary, to establish, administer, and maintain this Plan under the Plan Administrators ' direction. 2 - 6336 3 .4 The Plan Administrator is authorized to adopt, amend, or revoke rules for the administration of the Plan. ARTICLE IV ELIGIBILITY 4 . 1 Only employees of an employer as defined in Section 2 . 1 may defer compensation under this plan. ARTICLE V ENROLLMENT 5 . 1 An eligible Employee may become a Participant by entering into a written agreement (hereinafter Participation Agreement) with the Employer to have compensation withheld by the Employer each pay period and invested as provided under Article VII . 5 .2 The Participant shall specify in the Participation Agreement the amount of compensation to be withheld and preferences for investment. The Participant may designate Beneficiaries in the Participant Agreement. 5 .3 The Participant Agreement shall remain in effect until it is modified or revoked in accordance with rules established by the Plan Administrator. A former Participant, who is an eligible Employee, may again become a Participant by entering into a new Participation Agreement as provided for by the Plan Administrator. 5 .4 Compensation may be deferred during a calendar month only if a Participation Agreement has been entered into before the first day of that month. 5 . 5 Compensation to be deferred under this Plan shall be subject to minimum amounts which the Plan Administrator may specify and maximum amounts set forth in Sections 5 . 6 and 5 .7 as applicable. 5 . 6 Except as provided in Section 5 .7, the maximum amount that may be deferred for each taxable year of the Participant is 33-1/3`s of the Participant ' s includable compensation (as defined in regulations regarding Section 457 of the Code) for the taxable year or $7, 500, or the maximum allowed by the Code, whichever is less. 5 . 7 During one or more of the Participant ' s last three taxable years ending before the Participant attains Normal Retirement age, a Participant may utilize the catch up provision as follows: (a) The maximum amount that may be deferred for each taxable year of the catch up period is the sum of the underutilized limitation, as computed under (b) or $15, 000, whichever is less . 3 - 6336 (b) Underutilized limitation shall be computed by adding (1) the maximum amount under Section 5 . 6 for the taxable year and (2) the amount which a Participant could have deferred but did not defer (i .e. , the maximum amount under Section 5 . 6 less any amount previously deferred) for any prior taxable years in which the Participant was eligible to participate in this Plan or another eligible plan. A prior taxable year can be taken into account only if such taxable year began after December 31, 1978. (c) The Participant may only utilize the catch up provisions once, regardless of whether the Participant fully utilizes these provisions or rejoins the Plan. 5 . 8 In the case of Employees who participate in another plan under any Section of the Code, the maximum amounts set forth in Sections 5. 6 and 5 .7 shall be reduced in accordance with regulations regarding Section 457 of the Code. ARTICLE VI ASSETS 6 . 1 All assets of the Plan (including Amounts Deferred, property and rights to property purchased with Amounts Deferred, and income attributable to Amounts Deferred, property, or rights to property) shall remain the exclusive property of the Employer, subject to the claims of the general creditors of the Employer only, until paid or otherwise made available to the Participant or Beneficiary under this Plan. 6 .2 Neither the Participant nor the Beneficiary shall have any property interest whatsoever in any specific asset of the Employer on account of participation in this Plan. To the extent that the Participant or Beneficiary acquires a right to the payment of benefits under this Plan, the right shall be no greater than the right of general creditor of the Employer. 6 .3 The right to receive any payments under this Plan are non-assignable and non-transferable. Any attempt to assign or transfer shall not be recognized and shall impose no liability upon the Plan Administrator. 6 .4 Except as otherwise required by law, Amounts Deferred under this Plan shall not be subject to attachment, garnishment, or execution or be transferable by operation of law in the event of bankruptcy or insolvency of the Participant or otherwise. 4 - 6336 ARTICLE VII INVESTMENTS 7. 1 The Plan Administrator is authorized to enter into contracts with the companies selected to provide the investment products for this Plan. 7.2 The Plan Administrator is authorized to determine the type of investment products and the number of companies for each type of investment product that will be available under the Plan. The Plan Administrator may also direct that additional investments shall be made in a particular investment product or company under the Plan. 7 . 3 At the time of enrollment each Participant may designate preferences as allowed by the Plan Administrator for the investment of Amounts Deferred by the Participant from among the investment products and companies available under the Plan. However, the designation of investment preferences does not give the Participant any right, title or interest in the Amounts Deferred. 7 .4 Designation, changes or revocations of investment preferences shall be made in accordance with rules established by the Plan Administrator. 7 . 5 Any action taken by the Plan Administrator or Committee regarding the investment of Amounts Deferred shall not be considered as guaranteeing any investment nor attesting to the suitability of any investment for the purposes of meeting future obligations of the Participant. The City, Plan Administrator, Committee or Agents are not liable to any Participant for investment results . ARTICLE VIII ACCOUNTS AND REPORTS 8 . 1 To facilitate any orderly administration of the Plan, the Plan Administrator shall maintain a deferred compensation account for each Participant. However, the maintenance of the account does not give the Participant any rights except as otherwise provided in this Plan. 8 .2 Each Participant ' s account shall be credited with the amount of compensation deferred and shall be further adjusted by an increase or decrease resulting from investments made under Article VIII , any costs for implementing and administering the Plan, if charged, and any withdrawals or payments of benefits . 8 . 3 Each Participant shall be provided with written reports on the Participant ' s deferred compensation account in accordance with rules established by the Plan Administrator. 5 _ 6336 ARTICLE IX BENEFITS 9 . 1 Benefits under this Plan shall only be paid or made available to the Participant upon (a) separation from service, except as provided in Articles XI and X11, or (b) the occurrence of an unforeseeable emergency as provided in Article X. 9 .2 Election of benefits shall take place no later than 60 days after the close of the calendar year in which the Participant or former Participant attains 70 . 5 years of age. 9 .3 Payment of benefits shall be made primarily for the benefit of Participants or former Participants . Thus, the method for payment selected by the Participant shall be such that benefits payable to a Beneficiary are not more than incidental. 9 .4 If a participant dies before the entire amount of benefits is paid to the Participant, the entire amount of benefits (or the remaining part if payment has commenced) shall be paid to the Beneficiary as follows : (a) If the Beneficiary is the Participant ' s primary beneficiary, that primary beneficiary has the right to select the same benefits as would have been available to the Participant . (b) If the Beneficiary is not the Participant ' s primary beneficiary, benefits shall be paid over a period not in excess of 15 years . 9 . 5 A Participant may elect before benefits become payable, the method, for payment of benefits (except for emergency withdrawals under Article X) from among the options made available by the Plan Administrator. Additionally, a Participant may irrevocably elect before benefits become payable to defer payment of some or all of the benefits to a fixed or determinable future time (to the extent allowable under regulations regarding Section 457 of the Code) . The elections shall be made in accordance with rules established by the Plan Administrator. In the absence of an election of the method for payment of benefits, benefits shall be paid in accordance with the Plan Administrator rules . 9 . 6 A Participant may designate a Beneficiary or Beneficiaries who will receive the Participant ' s benefits in the event of the Participant ' s death. If a Beneficiary has not been designated or the designation is ineffective, the Participant ' s estate shall become the Beneficiary. Upon the death of the Participant, any - 6 - 6336 Beneficiary entitled to receive the Participant' s benefits shall have all the rights of the Participant . ARTICLE X UNFORESEEABLE EMERGENCY 10 . 1 In the event a Participant incurs an unforeseeable emergency as defined in Section 10 . 2, the Participant may apply for an emergency withdrawal in accordance with the Plan rules . 10 .2 An unforeseeable emergency means severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a Participant ' s dependent (as defined in Section 152(a) of the Code) , loss of the Participant ' s property due to casualty, or similar extraordinary and unforeseeable circumstances beyond the control of the Participant . 10 .3 Emergency withdrawals shall only be permitted by the Plan Administrator to the extent reasonably needed to satisfy the emergency and shall be paid as directed by Plan Administrator. An emergency withdrawal shall only be approved to the extent that severe financial hardship cannot be relieved by: (a) Reimbursement or compensation from sources other than an emergency withdrawal under the Plan; (b) Cessation of deferrals under the Plan; or (c) Liquidation of the Participant' s assets, to the extent that the liquidation of assets would not itself cause severe financial hardship. ARTICLE XI TRANSFERS BETWEEN EMPLOYERS UNDER THIS PLAN 11 . 1 In the event a Participant changes employment from one Employer under this Plan, the change in employment shall not be considered as a separation from service under this Plan. The Participant ' s deferred compensation account shall continue in full force and effect . 11. 2 The :mounts Deferred in the Participant' s account may be transferred to and become an asset of the new Employer . The new Employer then shall maintain the Participant ' s rights under its Plan. ARTICLE XII PLAN-TO-PLAN TRANSFERS 12 . 1 When a Participant separates from service (i .e. , no longer employed by an Employer under this Plan) , benefits 7 - 6336 shall not be payable upon separation from service, regardless of any other provision of this Plan, and Amounts Deferred by the Participant may be transferred if the following conditions exist: (a) The Participant separates from service to accept employment with an entity which has an eligible plan and is located within the State of California . (b) The Participant has become a Participant in the eligible plan of that entity; and (c) The eligible plan of that entity accepts the transfer of previously deferred amounts under another eligible plan. 12 . 1 This Plan shall accept the transfer of a Participant ' s previously deferred amounts under another eligible plan which has a plan-to-plan transfer provision. ARTICLE XIII AMENDMENT OR TERMINATION OF THE PLAN 13 . 1 The City Council is authorized to amend this Plan or adopt a new plan at any time. However, no amendment or substitution shall affect the right of a Participant or Beneficiary to receive payment of benefits, to the extent of any compensation deferred before the time of the amendment or substitution. 13 . 2 The City Council is authorized to terminate this Plan at any time. In the event of termination, the Participants in this Plan will be considered as having withdrawn from the Plan as of the date of termination of the Plan. Participants shall be treated as though they had separated from service, deferrals shall cease, and benefits shall be payable as pursuant to the Code. ARTICLE XIV MISCELLANEOUS 14 . 1 The Plan Administrator is authorized to determine any matters concerning the right of Participants under this Plan and the Plan Administrator ' s determination shall be final and binding on the Participants and Beneficiaries . 14 . 2 The Plan Administrator, the Employer, the Committee and their agents shall be held harmless by the Participant and the Participant' s Beneficiaries, heirs, successors, and assignees for all acts performed under the Plan in good faith, including but not limited to the investment of Amounts Deferred. - 8 - 6336 14 . 3 The Plan Administrator or Employer does not represent or guarantee that any particular federal or state tax consequences will occur because of participation in this Plan. 14 .4 The Employer shall indemnify and hold harmless the Plan Administrator, Committee, and agents for acts performed under the plan in good faith. ARTICLE XV APPLICABLE LAW 15 . 1 This Plan shall be construed under the laws of the State of California. 15 .2 This Plan, which is intended to be an eligible state deferred compensation plan within the meaning of Section 457 of the Code, shall be interpreted consistent with that Section and all regulations regarding that Section. 9 - 6336 Res. No. 6336 STATE OF CALIFORNIA COUNTY OF ORANGE ss: CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex--officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on the 2nd day of December , 19 91 , by the following vote: AYES: Councilmembers; Robitaille, Moulton-Patterson, Winchell , Silva, Green, MacAllister, Kelly NOES: Councilmembers: unnp ABSENT: Councilmembers: None &Otc� a2�" City Cler nd ex-officio Clerk of the City Council of the City of Huntington Beach, California