HomeMy WebLinkAboutDeferred Compensation Plan 1973-1991 Resolution 3698 - Resol REQUEST FOR CITY COUNLIL ACTION
Date December 2, 1991
Submitted to:
Honorable Mayor and City Council APPROVED BY CITY COUNCIL
Submitted by: Michael T. Uberuaga, City Administrator
19�
Prepared by: Robert J. Franz, Deputy City Administrator TY ERK
Subject: Revision of Deferred Compensation Plan
Consistent with Council Policy? YXY Yes [ ] New Policy or Exception P. :;qt: 3(0
Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions,Attachments: �(Q
STATEMENT OF ISSUE:
The City adopted a Deferred Compensation Plan in 1973 and amended that plan in 1989,
for the benefit of its employees. The Plan needs to be updated to conform to the latest
revisions to the Internal Revenue Code.
RECOMMENDATION:
Adopt Resolution No. 3698 amending the Huntington Beach Employee Compensation Plan.
ANALYSIS:
Changes in Internal Revenue Code Section 457 which set forth the requirements for
eligible Deferred Compensation Plans require that the City's Plan be revised.
FUNDING SOURCE:
Not applicable; none.
ALTERNATE ACTION:
None.
ATTACHMENT:
1. Resolution No. 3698, with attached exhibit.
2. City of Huntington Beach Deferred Compensation Plan.
0214U
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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.
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PASSED AND ADOPTED by the City Council of the City of
Huntington Beach at a regular meeting thereof held on
the 211d day of December 1991.
Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk City, , me
REVIEWED AND APPROVED: ATE A ED:
i y Administrator irect Adm' nistr ive
Services
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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.
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(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 -
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% 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 -
(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.
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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 P1an .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 .
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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 XII , 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
wit,hdrawals . 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
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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 unforesseable
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- P-articipant ' s deferred compensation account
shall continue in full force and effect .
11.2 The Amounts 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
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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.
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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.
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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:
Nnoe
ABSENT: Councilmembers:
None
City er an ex-officlo Clerk
of the City Council of the City
of Huntington Beach, California
J
,r- o
Address any reply to: P.O.Box 231,Los An¢n'=s,Calif.90053
4tJ`, Internal Revenue Service
O f � Date: In reply refer to:
2.'J June 21, 1973 � 412:MCED(213)688-4173
J � _
O�
c> City of Huntington Beach
CITY P Office of the City Attorney
P. O. Box 190
Huntington Beach, California 92648
LA:IT:1973-8
451
Gentlemen:
This is in response to letters dated May 10, 1973, May 21, 1973 and
June 12,. 1973, requesting approval of the City of Huntington Beach
Deferred Compensation Plan adopted and approved by the City Council on
June 4, 1973..
The Plan provides for future payments to participants or their
beneficiaries upon death or other termination of employment or upon
death after termination of employment.
Upon enrollment as prescribed in the plan the City sball not pay a
participant in the Plan his full compensation but shall defer such
portion of his compensation as is specified by the participation
agreement. Such amounts deferred may be subject to limitations in
amount as determined' by the City.
Amounts deferred shall be invested at the request of the employee in
one of three broad categories of investment programs outlined in the
Plan but the specific investments made within any one program shall be
at the sole discretion of the City.
The City shall maintain a separate book account for each participant
to which it shall credit an amount equal to the deferred income of
the participant and the book account will also reflect any earnings
or losses attributable to amounts invested by the City. However,
all amounts of deferred compensation as well as earnings thereon
shall at all times be and remain an asset of the City and be available
for payment of City debts until such time as employment is terminated.
Neither the Plan nor the participant's account shall be deemed to
constitute a trust for the participant or his beneficiary and the City
shall be the legal owner of all investments. Neither the participant,
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CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
To Ms . Alicia Wentworth From John O' Connor
City Clerk Deputy City Attorney
Subject Attached original determination Date June 25 , 1973
letter from IRS re Deferred
Compensation Plan
Attached hereto is the original determination letter from
the Internal Revenue Service .approving the City 's Deferred
Compensation Plan. Please retain this :letter in your files
as an official document .
JO :lm
AttachAnt
City of Huntington Beach - 2 -
his beneficiaries or the creditor of a participant or beneficiary
shall be entitled to any claim or lien against the investment
assets. A participant or his beneficiary may not sell, assign
transfer or encumber, in any manner, any part of any interest in
the Plan and any attempt to do so shall release the City from
any and all further liability under the Plan. The participant or
his beneficiary shall have only the right to receive the benefits
payable under the Plan.
Based on the terms of this plan it is concluded that neither the
current amounts deferred on behalf of any participant nor any
investment earnings attributable to such deferred amounts constitute
taxable income to the participant. Income will be realized only at
such time as money or other property is actually received or
otherwise made subject to the direction and control of a participant
or his beneficiary.
This is a determination letter.
-Very truly yours,
District Director
a rrq c e d
CITY OF HUNTINGTON BEACH
DEFERRED COMPENSATION PLAN
I
TITLE
The, title of this plan is the "Deferred Compensation Plan
. of the City of-Huntington Beach" (hereinafter referred to as
II
PURPOSE
The purpose of this Plan is to permit employees of the
City of Huntington Beach to defer a portion of their compensation
and to provide for retirement , disability and death benefits .
III
DEFINITIONS
For purposes of this Plan, the following words and phrases
1
shall have the following meanings ascribed to them:
3 .1 . "City" shall mean the City of Huntington Beach .
3 . 2 . "Employee" shall mean a permanent employee of the
City of Huntington Beach who executes an agreement to defer
a portion of his compensation pursuant to this Plan .
3. 3 . "Participant" shall mean an employee who has elected
to participate in the Plan .
1 .
3 . 4 . "Participation agreement" shall mean an agreement
,. _,xecuted and riled by an employee pursuant to Section IV of
iiis Plan, in which the employee elects to become a partici_-
.pant under the Plan .
3 . 5 . "Compensation" shall mean the total of all amount.,
:.ayable by the City to or for the benefit o1' an employee (if' tie
�:rere not a participant in the Plan) for actual services during.;
'C"le period that he is a participant under the Plan .
3 . 6 . "Employment Year" shall mean the calendar year, January
1 through December 31 , except that in the initial year an employee
participates in the Plan , it shall mean the portion of the calendar
year remaining after his election to participate in the Plan .
3 . 7 . "Disability" means the inability of the participant
to engage in his usual occupation by reason of a medically
' determinable physical or mental impairment , as determined by
the City on the basis of advice 1'rom a physician or physicians .
3 . 8 . "Beneficiary" shall mean any person , trust , corpora-
tion , or firm or any combination of the foregoing designated
by employee to receive benefits under the Plan . Any such
designation shall be revocable unless otherwise provided in
such instrument . If employee does not file a beneficiary
designation with the City , the beneficiary :;hall be the estate
of suc:li employee .
IV
PAR`I'ICIPAN`I' IN THE PLAN
Election to Participate in Plan :
4 . 1 Each employee may elect to become a participant of the
2 .
.,, plan and defer payment of part of hi., uompen:>ation by execut-ing;
z
A _, '. ri tten oarti ci pation agreement and filing .it with the City -
(a) no later than the day preceding commence-
ment of any employment ,year; or,
(b ) no later than thirty ( 30 ) day:, after the
Plan is established ; or,
( c ) no later than thirty ( 30 ) day::> after commenc-
.- ing el,i_ployment with the City .
Duration of Participation Agreement :
4 . 2 . A participation agreement shall be effective for the
first employment year following its execution and filing except
.Then it is executed and filed pursuant to Section 4 . 1 (b ) or
r�
Section 4 . 1 ( c ) in which case it shall be effective for the re-
,naini_ng portion of the employment year following its execution
;?yid riling. A participation agreement shall continue from year,
to year and remain in full force and effect unless terminated
as provided in Section 4 . 3 .
Termination of Participant Agreeirrent :
4 . 3 Plan participation may be voluntarily terminated by
participant effective upon expiration of any employment year
during which the participant has elected to participate in the
Plan . Written notice of termination, signed by the participant ,
mu .t be filed with the City at least ten ( 1.0 ) days, :i.n advance
of the cornmencement of the employment year in which the partic -
pant desires to terminate participation under, the Plan. Where
participant has terminated his participation agreement , he cannot
4�F5 elect to again participate in the Plan for the employment year
3.
succeeding termination . HolJever, participant may
C,
ec to participate
-pate in Subsequent employment years by signinril
-,ticipation agreement prior to commencement of such f'utut-e
k:.,::!ployment year as provided in Section )I . 1 ( a) Amount:, payable
1;0 all 0111ploye'e Upon terminlauic)n of hi;� participation agreement
under this Plan shall be payable only pursuant to Section VII
of this Plan.
V
DEFERRAL OF COMPENSATION
During each employment year in which the employee is
a participant in the Plan , the City shall riot pay said
employee his full compensation , but shall defer such portion
of his compensation as is specified by the employee in the
j
p1-:trticipation agreement . Compensation shall be deferred in
equal amounts over each pay period of tl-ie employee ' s employment
year . Minimum deferrable amount of compensation shall be 'Three
Hundred Dollars ( $300 - 00 ) per calendar year with appropriate
initial year apportionment under Section 4 . 1 (b ) and Section
4 . 1 (c ) .
VI
ADMINISTRATION OF PLAN
Administration by City :
6 . 1 The Plan shall be administered by the City through the
City ' s Finance Director under the direction of the City Council .
An investment advisory board consisting of three designated
members of the Management Employees ' Organization may recommend
fir::
to City suggested forms of investment , however, the function of
_
this advisory board is purely advisory and the City shall leave:
tie sole and exclusive discretion in the i_rive stinent of.' Plan fund:; .
Types of Investments :
6 . 2 The Plan shall consist of three types of investment
i o:;ra�ns and upon executi.nn, the participation agreement an em-
ployee shall designate this deferred compensation objective .
Types of investment programs shall be limited to :
(a) Class A : Investments of a type where primary
emphasis is placed upon maximum security of princi-
pal and assured rate of return .
(b ) Class 5 : Investments of a type affording an
opportunity for a greater rate of return and/or
x-
appreciation than Class A but which carries less
tH
t
rise: than Class C .
( c ) Class C : Investments of a type affording em-
ployees a maximum rate of return and/or apprecia-
tion in .value .
The specific investmert:; included under Classes A, B and C
shall be determined pursuant to 6 . 1 supra, at the sole discretion
of City , and City shall invest all deferred compensation funds
as in its sole judgment will best achieve the employees ' ob-
jective .
Investment Accounts :
6 . 3 . The City shall establish for each participant an in-
vestment account , in order to provide a convenient method of
5 .
rriea-surin& its obligations to the participant under the Plan.
The City shall invest in such account amounts, equal to the
,-ompensation deferred by the pai-t-I.ciparit under, thi:i P I art. Tf e
sets of the account Shall be invested pursuant to 6 . 2 . in such
:.annex as the laws of the State of California ii,iay allow .
The City shall maintain a separate book account for each
::)articipant to which it shall credit an amount equal- to the
deferred income of the participant . The participant ' s book account
further be credited yearly with car,nings , gains or losses
thereto,- which have
iave been ear-tied by the participant ' s
-1-iivestment account during the preceding year .
Plan Funds Asset of City :
6 . 4 . All amounts of deferred compensation, whether or not
tp invested by the City , shall at all times be and remain an asset
of the City . Any and all dividends , capital gains distributions,
interest or other income payable on an,,; of the city Is investment
of' deferred compenstion also shall be an asset of the City . The
City shall have the sole right to vote any shares of stock which
it may acquire by such investment . The investment account shall
at all times remain a part of the general assets of the City and
shall remain available for the payment of City debts . Neither
the existence of the Plan nor the investment account shall be
deemed to create a trust and the City shall_ at all times be the
legal owner of the investment account . Neither the existence
of the Plan nor the investment account shall entitle any partic-1-
parit , the beneficiary of any participant , or the creditor of any
In IQ
participant to a claim or lien against the assets of the invest
6 .
inent. account . The, and li-! ;; hci-ief.iciary shall have
-iefit:-; pl-iyahle -,he
_Dniy the rio'lit to ieceive the bet under I Plan .
VII
DISTRIBUTION OP BENE,'FITS
The following are the exclusive inethod:3 of distribution
of benefits under the Plan .
Termination of Services :
7 - 1.. Upon the termination of employment , other than by the
death of participant , the City Shall pay to the participant
one of the following benefits , the ;ielection of the type of
benefit to be at the sole discretion of the City :
(a) A lump sum payment of the full amount of
benefits credited to the participant ' s book
account .
(b ) Consecutive monthly installments over a
specified period of time, not to exceed -fifteen ( 15)
years from the date distribution is commenced; pro-
vided further, no monthly payment shall be less than
Fifty Dollars ($50 - 00) per month .
( c) In monthly installments over a time interval
not greater than the life expectancy of participant ;
provided further, no monthly payment shall be less
than Fifty Dollars ( $50 - 00) . Life expectancy shall
be determined by .the City on the date of the initial
installment distribution payment .
Disability :
7 . 2 . In the event of termination o.1' employment by reason
7 .
of disability , distribution of berief'its .-,hall be as provided Irl
Section 7 . 1 . supra .
Death Prior to Termination of' Services
7 . 3 . In the event of the death of the participant while
ay -ie o t - e o- till an employe( of City , the City :'.hall_ p, or f, 11 C I
lowin-- benefits to the participant ' s beneficiary , the selection
of the benefits to be at the sole discretion of the City :
(a) A lump- sum payment of the full amount of
benefits credited to the participaht ' s book account .
b ) In consecutive monthly installments over a
time interval not to exceed fifteen ( 15) years
from the date distribution commenced; provided"
further, no monthly payment sfrall be less than
Fifty Dollars ( $'50 . 00) per month .
Death Subsequent to Termination of E'mployment
In the event of death of partic_ipant subsequent to
termination of services with the City , the City shall pay to
participant ' s beneficiary , one of the following benefits , the
selection of the benefit to be at the sole discretion of the
City :
(a) A lump sum payment of the remaining balance of
benefits credited -to the participant ' s bo-ok account .
(b ) In consecutive monthly in:itallment.-I over,
time interval riot to exceed fN'teen ( 15) years
f'rom the date distribution is commenced; provided
further, no monthly payment shall be less than
Fifty Dollars ( $50 -00 ) per month .
VIII
w; MISCELLANEOUS CONDITIONS OF PLAN
Status of Participants :
8 . 1 . Neither the establishment of the Plan nor any modifi-
cation thereof, nor the establishment of any book account nor,
the payment of any benefits , shall be construed as giving to any
participant or any other person any legal or equitable right
against the employer, except as herein provided; and, in no event ,
shall the terms of employment of any employee or participant
be modified or in any way be affected hereby .
Nonassignability :
8 . 2 . The interest of a participant under the Plan shall
not be sold, assigned, transferred or encumbered in whole or in
part directly or by operation of law or otherwise, in any manner;
S�
and any attempt by employee to sell , assign , transfer, or encumber,
shall release City from any and all further liability under this
Plan .
Designation of Beneficiaries :
8 . 3 . Each participant shall have the right , by written
notice to the City , to designate the beneficiary 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 at the time of participant ' s
death , the beneficiary shall be the estate of participant .
Governing Law :
8 . 4 . This Plan shall be construed, administered, and
`r
enforced according to the laws of the State of California.
9 .
IX
�s
AMENDMENT AND `l'ERMINA`l'ION
9 . 1 . The City may at any time and from time to time
: odify , amend , or terminate the Plan in whole or in part or
cease deferring compensation pursuant to the Plan , by delivering
to each participant a written copy of such modification , amend-
ment or termination or of a notice that it ceases deferring com-
pensation; 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 .
Discharge of City ' s Obligation under Plan :
9 . 2 . The City may at any time discharge .in full its
obligation under the Plan to any participant by distributing
xy.
to any participant or, following the death of a participant ,
to his beneficiary , all amounts credited to participant ' s
book account .
10 .
MEMORANDUM OF AGREEMENTS
Legend: MOSA Marine Officers Associations
EMT Executive Management Team
MEO Management Employees Organization
POA Police Officers Association
FA Firemens Association
SLA Surf Lifesaving Association
MEA Municipal Employees Association
TEMP Temporary Employees
NA Non-Associated Employees
PMA Police Management Association
ORD 1642 Personnel System 4/19/71
RES 3335 Employer-Employee Relations 6/1/71
RES NO ORGANIZATION DATE
3340 POA 7/26/71
3341 FA 7/26/71
3342 MEA 7/26/71
3343 SLA 7/26/71
3374 MEO 10/7/71
3507 MEO 6/19/72
3510 SLA 6/19/72
3516 FA 6/28/72
3517 POA 6/28/72
3518 MEA 7/3/72
3848 POA (Addendum) 2/19/74
3983 FA (Settlement Agreement) 11/18/74
4097 POA 7/7/75
4109 MEO 7/21/75
4110 EMT 7/21/75
4111 NA 7/21/75
4149 FA 10/23/75
4200 MEA (75-76) 3/3/76
4300 POA (76-77) 8/2/76
4327 MEO 9/13/76
4332 MEA 9/20/76
4340 FA (76-77) 10/6/76
4352 NA 10/26/76
4392 MOSA (76-77) 12/20/76
4482 MEA 6/20/77
4483 NA 6/20/77
4518 MEA 9/6/77
4701 MEO 11/20/78
4702 NA 11/20/73
4731 FA (78) 3/19/79
4738 POA (78) 4/2/79
4758 MOSA (78) 5/21/79
Minute Action MEA (78) 4/16/79
4767 EMT (78) 6/18/79
4775 FA 7/16/79
4777 MEA 7/16/79
4788 NA 8/6/79
4910 FA 8/4/80
4911 MEA 8/4/80
4912 NA 8/4/80
4916 MEO 9/2/80
4925 POA 10/20/80
4930 MOSA 10/20/80
5026 NA 8/3/81
5027 MEO (81-82) 8/3/81
5033 MEA 8/17/81
5045 MOSA 10/26/81
5046 FA 10/26/81
5047 POA 10/26/81
5202 FA 12/6/82
5292 MEO 8/22/83
5293 NA 8/1/83
5297 TEMP 8/1/83
5332 MEA (83-84) 12/5/83
5338 POA (83-85) 12/19/83
5344 FA 1/3/84
5348 MOSA 1/16/84
5412 TEMP 7/16/84
5424 MEO (84-86) 8/6/84
5445 NA 10/15/84
5455 MEA 10/15/84
5480 PMA 1/7/85
Per Wayne Lee - IRS Code S. 457 allows and governs deferred
compensation plans.
10/5/89
I
i
5"
RESOLUTION NO 3698
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF HUNTINGTON BEACH APPROVING 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 adopting 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 Finance Director is author-
ized 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.
BE IT FURTHER RESOLVED that the plan shall be operative
immediately, but shall apply only to compensation earned by a
participating employee subsequent to the date of filing a
written declaration to participate , and the City consents to
the participation of any employee of the City , such partici-
pation to be in accordance with the "Employee 's Participation
Agreement . "
BE IT FURTHER RESOLVED that at the end of each calendar
year the City shall prepare a financial statement of the amount
1.
of employee compensation deferred pursuant to said plan and
k the types of investments held under such plan.
PASSED AND' ADOPTED by the City Council of the City of
Huntington Beach at a regular meeting thereof held on the
4th day of June, 1973 .
M or
ATTEST:
ell 7)
City , Clerk
.APPROVED AS TO FORM:
C y At to
2. _
RL _ ,. No. 3698
STATE OF CALiFORNTA )
COUNTY OP' ORANC E
CITY OF HUNT I NCTON B .AC1! )
I, ALICIA M. WENTWORTH, the duly appointed, 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 more than a majority of all the members of said City Council
at a regular meeting thereof held on. the 4 th day
of June 19 73' by .the following vote:
AYES: Councilmen:
Shipley, Bartlett, Gibbs, Green, Coen, .Duke,,. Matney
NOES: Councilmen:
None
ABSENT: Councilmen:
None
o ,
City Clerk and ex-officio dj rk-
of the City Council of the City
of Huntington Beach, California