HomeMy WebLinkAboutResolution 98-99 - Revision of City of Huntington Beach Empl J !
(9) 12/21/98 - Council/Agency Agenda - Page 9
E-5. (City Council)Approve City Acceptance From PLC Land Company Of A Sewer Line
Easement Within Tract No. 14355 (The Bluffs) -n/w Corner Of Garfield Avenue & Edwards
Street (650.80) -Accept Sewer Line Easement within Tract No. 14355 (The Bluffs)from PLC
Land Company and authorize the Mayor and City Clerk to execute the Sewer Line Easement
from PLC Land'Company to the City of Huntington Beach and instruct the City Clerk to record the
document with the County Recorder. Submitted by the Public Works Director
[Approved 6-0 (Julien: Absent)]
E-6. (City Council)Accept Bids For Repair/Replacement Of Street Improvements Along Scenario
Drive - MSC-398 -Approve Contract With Kalban, Inc. (600.90) - 1. Accept the low bid
submitted by Kalban, Inc. and approve and authorize execution of the City—funded Construction
Contract Between The City Of Huntington Beach And Kalban, Inc. For The Reconstruction And
Improvements Of Various City Streets (MSC-398). Submitted by the Public Works Director
[Approved 5-0 (Julien: Absent, Harman: ABSTAINED)]
E-7. (City Council)Approve Lease Agreement Between City And Michael Mehalick For Downtown
Library Annex Space (600.10)-Approve and authorize the Mayor and City Clerk to execute a
Lease Agreement Between The City Of Huntington Beach And Michael Mehalick For The Premises
At 525 Main Street(Library 790-Foot Annex) In The City Of Huntington Beach for a term of one
year 10/1/98-9/30199. Submitted by the Acting Director of Administrative Services. '
[Approved 6-0 (Julien: Absent)] vl�eei�o
E-8. (Citv Couna op eso ution No.98-99 -Revision Of Huntington Beach Employee
Deferred Compensation Plan (700.55) -Adopt Resolution No. 98-99 'A Resolution of the City
Council of the City of Huntington Beach Amending Its Deferred Compensation Plan." Submitted by
the Anting Administrative Services Director
[Approved 6-0 u ien: sent]
E-9. (City Council)Accept Progress Report On The Mobile Home Advisory Board (430.80)-
Receive, review and file the report and accept the report as complete-Report To The City Council
On The Activities And Actions Of The City Of Huntington Beach Mobile Home Advisory Board.
Submitted by the Economic_Development Director
[Approved 6-0 (Julien: Absent)]
E-10. (City CouncillRedevelopment Agency) Approve Continuation Of Mortgage Credit Certificate (MCC)
Program In Cooperation With County Of Orange (600.25)-Approve the continuation of the Mortgage
Credit Certificate Program in cooperation with the County of Orange, as set forth in Resolution No. 97-
001 adopted by the City Council on January 6, 1997. Submitted by the Economic Development Director
[Approved 6-0 (Julien: Absent)]
E-11. (City Council) Employee Classification And Compensation Study -Approve Consultant
Agreement-Between City &Johnson &Associates (600.10)- 1. Approve the selection of
Johnson and Associates to perform a limited classification and compensation study for a cost not to
exceed $50,000, and approve and 2. Authorize the Mayor and City Clerk to execute a Professional
Services Contract Between The City Of Huntington Beach And Johnson &Associates For
Classification And Compensation Study. Prepared by the Acting Director of Administrative Services
/
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Council/Agency Meeting Held: o I -n
r
rred/Continued to:
proved onditi ally A proved ❑ Denied EPlJ Ci Jerk's Signature
Council Meeting Date: December 21, 1998 Department ID Number: AS 98-033
CITY OF HUNTINGTON BEACH
REQUEST FOR COUNCIL ACTION
SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS
SUBMITTED BY: RAY SILVER, City Administrator0,60P x/o • 99
PREPARED BY: DAN T. VILLELLA, Director of Administrative Services
SUBJECT: APPROVE REVISION OF DEFERRED COMPENSATION PLAN
Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachments)
Statement of Issue: The City adopted an IRS Section 457 Deferred Compensation Plan in 1973,
amended the plan in 1989, and again in 1991. The Plan needs to be updated to conform to the latest
revisions to the Internal Revenue Code.
Funding Source: Not applicable.
Recommended Action: Adopt Resolution '794? amending the City of Huntington Beach Employee
Deferred Compensation Plan.
Alternative Action(s): None.
Analysis: The Federal Government allows City employees to defer a portion of their current
compensation until retirement or earlier date if they leave the employment of the City. This is similar
to 401 K plans in the private sector.
Changes in Internal Revenue Code Section 457 were signed into law on August 20, 1996, by
President Clinton as part of the Federal Legislation "Small Business Job Protection Act of 1996". The
new law changes the requirements for eligible Deferred Compensation Plans and requires that the
City's Plan be revised. All 457 Plan funds must now be held in "trust" for the participants to protect
the assets from creditors of a bankrupt or financially troubled public jurisdiction. This amendment
creates a trust for the City Deferred Compensation Plan.
The amended and restated Plan and Trust is the document provided by the International City
Managers Association (ICMA), the same institution through which a significant number of City
employees invest their deferred compensation.
The prepared resolution appoints the City as trustee. This is intended to bring the City into
compliance with Federal Law by year-end. City staff will be further examining the deferred
compensation plan and may recommend an alterative trustee to the City Council next year.
Rr-QUEST FOR COUNCIL ACTION
MEETING DATE: December 21, 1998 DEPARTMENT ID NUMBER: AS 98-033
Environmental Status: Not applicable.
Attachment(s):
NumberCity Clerk's
Page • Description
1. Resolution
2. City of Huntington Beach Deferred Compensation Plan and Trust
3. Legislative Draft of Deferred Compensation Plan and Trust
4. Prior Deferred Compensation Plan
RCA Author: Dan T. Villella
RCA/Revision to Deferred Comp -2- 12109198 6:09 PM
ATTACHMENT # 1
RESOLUTION NO. 98-99
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF HUNTINGTON BEACH
AMENDING ITS DEFERRED COMPENSATION PLAN
WHEREAS, the City of Huntington Beach (the "City") has employees rendering valuable
services; and
The City has established a deferred compensation plan for such employees that serves the
interest of the City 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
The City has determined that the continuance of the deferred compensation plan will
serve these objectives; and
Amendments to the InternalRevenue Code ("IRC")have been enacted that require
changes to the structure of and allow enhancements of the benefits of the deferred compensation
plan, including the addition of IRC Section 457(g); and
A major purpose of IRC Section 457(g) is to protect the deferred compensation assets of
government employees from the creditors of their governmental employers; and
A deferred compensation plan will become an "ineligible plan"if it does not comply with
the IRC Section 457(g) requirement by January 1, 1999; and
The effect of becoming an"ineligible plan" is to subject covered employees to liability
for income taxes on vested amounts deferred under the plan and to cause the City to be liable for
the amount of income tax which should have been withheld on deferred amounts; and
It has come to the attention of the City that its deferred compensation plan may not be in
compliance with IRC Section 457(g);
NOW,THEREFORE, the City Council of the City of Huntington Beach does hereby
resolve as follows:
Section 1. The above recitals are true and correct.
Section 2. In accordance with Section 457(g) of the Internal Revenue Code, all
amounts of compensation deferred pursuant to the Plan, all property and rights purchased with
such amounts, and all income attributable to such amounts, property, or rights shall be held in
trust for the exclusive benefit of participants and beneficiaries under the Plan. To implement
said trust, the City Council hereby amends and restates the Plan as set forth in Exhibit A.
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SF-98ResoltDet7 omp
12/10/98-#2
Section 3. This Resolution shall be effective immediately upon its adoption.
Section 4. The City Clerk shall certify the adoption of this Resolution and certify this
record to be a full true, correct copy of the action taken.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 21 st day of December , 1998.
Mayor
ATTEST: APPROVED AS TO FORM:
Le�l�riG
City Clerk it ttorng_ �` \10
J
REVIEWED AND APPROVED: INITIATED AND PROVE
ZX
City Ad inistrator Act' g beputy City Administrator/
Director of Administrative Services
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SF-98Resolt:DefComp
12/10/98-#2
EXHIBIT A
457 Deferred Compensation Plan and Trust Document
November 1996
DEFERRED COMPENSATION PLAN & TRUST 2.04 Beneficiary: The person or persons designated by
the Participant in his Joinder Agreement who shall
ARTICLE I. PURPOSE receive any benefits payable hereunder in the event of
the Participant's death. In the event that the Participant
The Employer hereby establishes the Employer's De- names two or more Beneficiaries, each Beneficiary shall
ferred Compensation Plan and Trust, hereafter referred be entitled to equal shares of the benefits payable at the
to as the "Plan." The Plan consists of the-provisions set -Participant's death, unless otherwise.provided in the
forth in this document. Participant's Joinder Agreement. If no beneficiary is
. .designated in the Joinder.Agreement, if the Designated
The primary purpose of this Plan is to provide retirement Beneficiary predeceases the Participant, or if the desig-
income and other deferred benefits to the Employees of the nated Beneficiary does not survive the Participant for a
.Employer and the Employees' Beneficiaries in.accordance period of fifteen.(15) days, then the estate of the Par-
with the provisions of Section 457 of the Internal Rev- ticipant shall be the Beneficiary.
enue Code of 1986, as amended (the "Code").
2.05 Deferred Compensation: The amount of Normal
This Plan shall bean agreement solely between the Compensation otherwise payable to the Participant
Employer and participating Employees. The Plan and which the Participant and the Employer mutually agree
Trust forming a part hereof are established and shall be to defer hereunder, any amount credited to a
maintained for the..exclusive benefit of eligible..Employ- Participant's Account by reason of a transfer.under-
ees and:their Beneficiaries. - No part of the corpus or section 6.09, or any other amount which the Employer
income of the Trust shall revert to the Employer or be agrees to credit to a Participant's Account.
used for or diverted to purposed other than the exclu-
sive benefit of Participants and their Beneficiaries. 2.06 Employee: Any individual who provides.services
for_the Employer, whether as an employee of the
ARTICLE 11. DEFINITIONS -Employer or as an independent-contractor, and who has
been designated by the Employer as eligible to partici-
2.01 Account: The-bookkeeping account maintained for pate in the Plan.
each Participant reflecting the cumulative amount of the
Participant's Deferred Compensation, including any 2.07 Includible Compensation: The amount of an
income, gains, losses, or increases or decreases in market Employee's compensation from the Employer for a
value attributable to the Employer's investment of the taxable year that is attributable to services performed for
Participant's Defer1red Compensation, and further the Employer and that is includible in the Employee's
reflecting any distributions to the Participant or the gross income for the taxable year for federal income tax
Participant's Beneficiary and any fees or expenses purposes; such term does not include any amount
charged against such Participant's Deferred Compensa- excludable from gross income under this Plan or any
tion. other plan described in Section 457(b) of the Code or
any other amount excludable from gross income for
2.02 Accounting Date: Each business day that the New federal income tax purposes. Includible Compensation
York Stock Exchange is open for trading, as provided in shall be determined without regard to any community
Section 6.06 for.valuing the Trust's assets. property laws.
2.03 Administrator: The person or persons named to 2.08 Joinder Agreement: An agreement entered into
carry out certain nondiscretionary administrative funs- between an Employee and the Employer, including any
tions.under the Plan, as hereinafter described. The amendments or modifications thereof. Such agreement
Employer may remove any person as Administrator shall fix the amount of Deferred Compensation, specify
upon 60 days' advance notice in writing to such person, 3 preference among the investment alternatives desig-
in which case the Employer shall name another person nated by the Employer, designate the Employee's
or persons to act as Administrator. The Administrator Beneficiary or Beneficiaries, and incorporate the terms,
may resign upon 60 days' advance notice in writing to conditions, and provisions of the Plan by reference.
the Employer, in which case the Employer shall name
another person or persons to act as Administrator.
. . . ... . . ... . . . . . . . . . . .. . . . . .. . .. . . . . . . . .. . . . . . . . . . . .. . . . . .. . .. . .. . . . . .. . ... .. . . . . . . . . . . .. . . . . .. .. . . .. . . . . .. . .
Two
ICMA RETIREMENT CORPORATION
2.09 Normal Compensation: The amount of compensa- to have actually terminated. In the case of a Participant
tion which would be payable to a Participant by the who is an independent contractor of the Employer,
Employer for a taxable year if no Joinder Agreement Separation from Service shall be deemed to have oc-
were in effect to defer compensation under this Plan. curred when the Participant's contract under which
services are performed has completely expired and
2.10 Normal Retirement Age: Age 70-1/2, unless the terminated, there is no foreseeable possibility that the
Participant has elected an alternate Normal Retirement Employer will renew the contract or.enter into a new
Age by written instrument delivered to the�Administra- •contract for the Participant's services,-atid:is not-antici-
tor prior to Separation from Service. A Participant's pared that the Participant will become an Employee of
Normal Retirement Age determines the period-during the Employer.
which a Participant may utilize the catch-up limitation
of Section 5.02 hereunder.,Once a Participant.has to 2.15 Trust: The Trust created under Article VI of the
any.extent utilized the catch-up limitation of Section Plan which shall consist of all compensation deferred
5.02, his Normal Retirement Age may not be changed. under the Plan, plus any income and gains thereon, less
any losses, expenses and distributions to Participants and
A Participant's alternate Normal Retirement Age may Beneficiaries.
not be earlier than the earliest date that the Participant
will become eligible to retire and receive unreduced ARTICLE Ill. ADMINISTRATION
retirement benefits under the Employer's basic retire-
ment plan covering the Participant and may not be later 3.01 Duties of the Employer: The Employer shall have
than the date the Participant will attain age 70-1/2. If a the authority to make all discretionary decisions affect-
Participant continues employment after attaining age ing the rights or benefits of Participants which may be
70-1/2, not having previously elected alternate Normal required in the administration of this Plan. The
Retirement Age, the Participant's alternate.Normal -Employer's decisions shall be afforded the maximum
Retirement Age shall not be later than the.mandatory deference permitted by applicable law.
retirement age, if any, established by the Employer, or
the age at which the Participant actually separates from 3.02 Duties of Administrator: The Administrator, as
service if the Employer has no mandatory retirement agent for the Employer, shall perform nondiscretionary
age. If the Participant will not become eligible to administrative functions in connection with the Plan,
receive benefits under a basic retirement plan main- including the maintenance of Participants' Accounts,
tained by the Employer, the Participant's alternate the provision of periodic reports of the status of each
Normal Retirement-Age may not be earlier than age 55 Account, and the disbursement of benefits on behalf
and may not be later than age 70-1/2. of the Employer in accordance with the provisions of
this Plan.
2.11 Participant: Any Employee who has joined the
Plan pursuant to the requirements of Article IV. ARTICLE IV. PARTICIPATION IN THE PLAN
2.12 Plan Year: The calendar year. 4.01 Initial Participation: An Employee may become a
Participant by entering into a Joinder Agreement prior
2.13 Retirement: The first date upon which both of the to the beginning of the calendar.month in which the
following shall have occurred with respect to a partici- Joinder Agreement is to become effective to defer
pant: Separation from Service and attainment of age 65. compensation not yet earned.
2.14 Separation From Service: Severance of the 4.02 Amendment of Joinder Agreement: A Participant
Participant's employment with the Employer which niay amend an executed Joinder Agreement to change
constitutes a "separation from service" within the the amount of compensation not yet earned which is to
meaning of Section 402(d)(4)(A)(iii) of the Code. In be deferred (including the reduction of such future
general, a Participant shall be deemed to have severed deferrals to zero) or to change his investment preference
his employment with the Employer for purposes of this (subject to such restrictions as may result from the
Plan when, in accordance with the established practices of nature of terms of any investment made by the Em-
the Employer, the employment relationship is considered ployer). Such amendment shall become effective as of
. . . .. .. .. .. . . . . .. . . . . .. . . . . . . . . . . .. .. . . .. . . . . . . . . . . .. . . . . .... . . .. . . . . .. . . . . . . . . . . . . . . . . .. . . . . .. .. . . .. . .. . . . . .
Three
457 Deferred Compensation Plan and Trust Document
November 1996 the beginning of the calendar month commencing after ARTICLE VI. TRUST AND INVESTMENT
the date the amendment is executed. A Participant may OF ACCOUNTS
at any time amend his joinder Agreement to change the
designated Beneficiary, and such amendment shall 6.01 Investment of Deferred Compensation: A Trust is
become effective immediately. hereby created to hold all the.assets of the Plan for the
exclusive benefit of Participants and Beneficiaries,
ARTICLE V. LIMITATIONS ON DEFERRALS except that expenses and taxes may be paid from the
Trust as provided in Section 6.03.. The trustee shall be
5.01 Normal Limitation: Except as provided in section the Employer or such other person which agrees to act
5.02, the maximum amount of Deferred Compensation in that capacity hereunder.
for any Participant for any taxable year shall not exceed
the lesser of$7,500.00, as adjusted for the cost-of-living 6.02.Investment.Powers: The trustee or the Plan Ad-
in accordance with Code section 457(e)(15) for taxable ministrator, acting as agent for the trustee, shall have
years beginning after December 31, 1996 (the "dollar the powers listed in this Section with respect to invest-
limitation"), or 33-1/3 percent of the.Participant's ment of Trust assets, except to the extent that the
Includible Compensation for the taxable year. This investment of Trust assets is directed by Participants,
limitation will ordinarily be equivalent to the lesser of pursuant to Section 6.05.
the dollar limitation in effect for the taxable year or 25
percent of the Participant's Normal Compensation. (a) To invest and reinvest the Trust without dis-
tinction between principal and income in any form
5.02 Catch-Up Limitation: For each of the last three (3) of tangible or intangible property, real, personal, or
taxable years of a Participant ending before his attain- mixed, and wherever situated, including, but not by
ment of Normal Retirement Age, the maximum amount way of limitation, common or preferred stocks,
of Deferred Compensation shall be the lesser of: (1) shares of regulated investment companies and other
S15,000 or (2) the sum of(i) the Normal Limitation for mutual funds, bondsi loans, notes, debentures,
the taxable year, and (ii) the Normal Limitation for mortgages, certificates of deposit, interest, or par-
each prior taxable year of the Participant commencing ticipation, equipment trust certificates, commercial
after 1978 less the amount of the Participant's Deferred paper including but not limited to participation in
Compensation for such prior taxable years. A prior pooled commercial paper accounts, contracts with
taxable year shall be taken into account under the insurance companies including but not limited to
preceding sentence only if(i) the Participant was eli- insurance, individual or group annuity, deposit
gible to participate in the Plan for such year (or in any administration, and guaranteed interest contracts,
other eligible deferred compensation plan established deposits at reasonable rates of interest at banking
under Section 457 of the Code which is properly taken institutions including but not limited to savings
into account pursuant to regulations under section 457), accounts and certificates of deposit, and other forms
and (ii) compensation (if any) deferred under the Plan of securities or investments of any kind, class, or
(or such other plan) was subject to the deferral limita- character whatsoever and representing interests in
tions set forth in Section 5.01 any form of enterprise, wherever it may be located,
organized or operated within or without the United
5.03 Other Plans: The amount excludable from a States of America, whether such investments are
Participant's gross income under this Plan or any other income producing or nor, without being limited in
eligible deferred compensation plan under section 457 any respect by statute or court rule or decision of
of the Code shall not exceed S7,500.00 (or such greater any jurisdiction now or hereafter in force purport-
amount allowed under Sections 5.01 or 5.02 of the in; to limit or otherwise affect such investments.
Plan), less any amount excluded from gross income Assets of the Trust ma, be invested in securities or
under section 403(b), 402(a)(8), or 402(h)(1)(B) of the new ventures that involve a higher degree of risk
Code, or any amount with respect to which a deduction than investments that have demonstrated their
is allowable by reason of a contribution to an organiza- investment performance over an extended period
tion described in section 501(c)(18) of the Code. of time.
.. . . . . . . . .. . . . . . . :... .... . . . .. . . . . .. . . . . .. .. . . .. . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .. . . . . .. . .
Four
ICAIA RETIREMENT COP, PORATION
(b) To invest and reinvest all or any part of the otherwise dispose of any such property, without
assets of the Trust in any common, collective or regard to restrictions applicable to fiduciaries or
commingled trust fund that is maintained by a bank others and without the approval of any court.
or other institution and that is available to Em-
ployee plans described under sections 457 or 401 of (g) To sell for cash or credit, redeem, exchange for
.the.Code, or any successor provisions thereto, and other property, convey, transfer, or otherwise
during the period of time that an investment dispose of any property held in the Trust in any
through any such medium shall exist, to the extent manner and at an}• tinie,-by private contract or at
of participation of the Plan, the declaration of trust public auction or otherwise, and no other person
of such common, collective, or commingled trust shall be 'bound to see to the application of the
fund shall constitute a part of this Plan purchase money or to inquire into the validity,
expediency, or propriety of any such sale or other_
(c) To invest and reinvest all or any part of the disposition.
assets of the Trust in any group annuity, deposit
administration or guaranteed interest contract issued (h) To enter into contracts for or to make commit-
by an insurance company or other financial institu- ments either alone or in company with others to
tion on a commingled or collective basis with the purchase or sell at any future date any property
assets of any other 457 plan or trust qualified under acquired for the Trust.
section 401(a) of the Code or any other plan de-
scribed in section 401(a)(24) of the Code, and such (i) To vote or to refrain from voting any stocks,
contract may be held or issued in the name of the bonds, or.other securities held in the Trust, to
Plan Administrator, or such custodian as the Plan exercise any other right appurtenant to any securi-
Administrator may appoint, as agent and nominee ties or other property held in the Trust, to give
for the Employer. .During the period that an invest- general or special proxies or powers of attorney with
ment through any such contract shall exist, to the or .without power of substitution with respect to
extent of participation of the Plan, the terms and such securities and other property, to exercise any
conditions of such contract shall constitute a part of conversion privileges, subscription rights, or other
the Plan. options or privileges with respect to such securities
and other property and make any payments inciden-
(d) To purchase part interests in real property or in tal thereto, and generally to exercise, personally or
mortgages on real property, wherever such real by general or limited power of attorney, any of the
property may be situated, and to delegate to a powers of an owner with respect to stocks, bonds,
property manager or the holder or holders of a securities, or other property held in the Trust at
majority interest in such real property or mortgage any time.
on real property the management and operation of
any part interest in such real property or mortgages. (j) To oppose or to consent to and participate in
any organization, reorganization, consolidation,
(e) To hold cash awaiting investment and to keep merger, combination, readjustment of finances, or
such portion of the Trust in cash or cash balances, similar arrangement with respect to any corporation,
without liability for interest, in such amounts as may company, or association, any of the securities of
from time to time be deemed to be reasonable and which are field in the Trust, to do any act with
necessary to meet obligations under the Plan or reference thereto, including the exercise of options,
otherwise to be in the best interests of the Plan. the making of agreements or subscriptions and the
payment of expenses, assessments, or subscriptions
(t) To retain, manage, operate, administer, divide, that may be deemed necessary or advisable in
subdivide, partition, mortgage, pledge, improve, connection therewith, and to accept, hold, and
alter, demolish, remodel, repair, and develop in any retain ariy securities or ocher property that may be
manner any property, or any part of or partial so acquired.
interest in any property, real or personal, held in the
Trust, to lease such property for any period of time,
and to grant options to sell, exchange, lease, or
. . . .... .. .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .. . . . . . . . . . . .. . . . . .. . . . . .. . . . . .. . . . . . . . .. . . . . .
F.ivc
457 Deferred Compensation Plan and Trust Document
November 1996
(k) To deposit any property held in the Trust with (o) To make, execute, acknowledge, and deliver
any protective, reorganization, or similar commit- any and all deeds, leases, mortgages, conveyances,
tee, and to delegate discretionary power thereto and contracts, waivers, releases, or other instruments in
to pay and agree to pay part of its expenses and writing necessary or proper for the accomplishment
compensation and any assessments levied with of any of the foregoing powers.
respect to any such property so deposited.
(p) To open and maintain any bank account or
(1) To hold, to authorize the holding of,-and to accounts:in-the name of-the. Plan, the Employer, or
register any investment to the Trust in the name of any nominee or agent of the foregoing, including
the Plan, the Employer, or any nominee or.agent of the Plan Administrator, in any bank or banks.
any of the foregoing, including the Plan Administra-
tor, or in bearer form, to deposit or arrange for the (q) To do any and all other acts that may be
deposit of securities in a qualified central depository deemed necessary to carry out any of the powers set
even though, when so deposited, such securities may forth herein.
be merged and held in bulk in the name of the
nominee of such depository with other securities 6.03 Taxes and Expenses: All taxes of any and all kinds
deposited therein by any other person, and to whatsoever that may be levied or assessed under existing
organize corporations or trusts under the laws of any or future laws upon, or in respect to the Trust, or the
Jurisdiction for the purpose of acquiring or holding income thereof, and all commissions or acquisitions or
title to any property for the Trust, all with or dispositions of securities and similar expenses of invest-
without the addition of words or other action to ment and reinvestment of the Trust, shall be paid from
indicate that property is held in a fiduciary or the Trust. Such reasonable-compensation of the Plan
representative capacity but the books and records of Administrator, as may be agreed upon from time to time
the Plan shall at all times show that all such invest- by the Employer and the Plan Administrator, and
ments are part of the Trust. reimbursement for reasonable expenses incurred by the
Plan Administrator in performance of its duties hereun-
(m) Upon such.terms as may.be deemed advisable der (including but not limited to fees for legal, account-
by the Employer or the Plan Administrator, as the ing, investment and custodial services) shall also be paid
case may be, for the protection of the interests of from the Trust.
the Plan'or for the preservation of the value of an
investment, to exercise and enforce by suit for legal 6.04 Payment of Benefits: The payment of benefits
or equitable remedies or by other action, or to from the Trust in accordance with the terms of the Plan
waive any right or claim on behalf of the Plan or may be made by the Plan Administrator, or by any
any default in any obligation owing to the Plan, to custodian or other person so authorized by the Em-
renew, extend the time for payment of, agree to a ployer to make such disbursement. The Plan Adminis-
reduction in the rate of interest on, or agree to any trator, custodian or other person shall not be liable with
other modification or change in the terms of any respect to any distribution of Trust assets made at the
obligation owing to the Plan, to settle, compromise, direction of the Employer.
adjust, or submit to arbitration any claim or right in
favor of or against the Plan, to exercise and enforce 6.05 Investment Funds: In accordance with uniform and
any and all rights of foreclosure, bid for property in nondiscriminatory rules established by the Employer and
foreclosure, and take a deed in lieu of foreclosure the Plan Administrator, the Participant may direct his/
with or without paying consideration therefor, to her Accounts to be invested in one (1) or more invest-
commence or defend suits or other legal proceedings ment funds available under the Plan-, provided, how-
whenever any interest of the Plan requires it, and to ever, that the Participant's investment directions shall
represent the Plan in all suits or legal proceedings in not violate any investment restrictions established by the
any court of law or equity or before any body or Employer. Neither the Employer, the Administrator,
tribunal. nor any other person shall be liable for any losses
incurred by virtue of following such directions or with
(n) To employ suitable consultants, depositories, any reasonable administrative delay in implementing
agents, and legal counsel on behalf of the Plan. such directions.
. . . . . . . . . . . . . . . .. . ... . .. . ... . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . .. . .
Six
ICMA RETIREMENT C O R P O R A T I O N
6.06 Valuation of Accounts: As of each Accounting than cash, unless the Employer and the Administra-
Date, the Plan assets held in each investment fund for agree to hold such other assets under the Plan.
offered shall be valued at fair market value and the Any such transferred amount shall be treated as a
investment income and gains or losses for each fund _ deferral subject to the limitations of Article V,
shall be determined. Such investment income and gains except that, for purposes of applying the limitations
or losses shall be allocated proportionately among all of Sections 5.01 and 5.02, an amount deferred
Account balances on a fund-by-fund basis. The alloca- during any taxable year under the plan from which
tion shall be in the proportion that each such Account the transfer is accepted shall be treated as if it has
balance as of the immediately preceding Accounting been deferred under this Plan during such taxable
Date bears to the total of all such Account.balances as of year and compensation paid by the transferor em-
that Accounting Date. For purposes of this Article, all ployer shall be treated as if it had-been paid by the
Account balances include the Account balances of all Employer.
Participants and Beneficiaries.
(b) Outgoing Transfers: An amount may be trans-
6.07 Participant Loan Accounts: Participant Loan ferred to an eligible deferred compensation plan
Accounts shall be invested in accordance with Section maintained by another employer, and charged to a
8.03 of the Plan. Such Accounts shall not share in any Participant's Account under this Plan, if(I) the
investment income and gains or losses of the investment Participant has separated from service with the
funds described in Sections 6.05 and 6.06. Employer and become an employee of the other
employer, (ii) the other employer's plan provides
6.08 Crediting of Accounts: The Participant's Account that such transfer will be accepted, and (iii) the
shall reflect the amount and value of the investments or Participant and the employers have signed such
other property obtained by the Employer through the agreements as are necessary to assure that the
investment of the Participant's Deferred.Compensation Employer's liability to pay benefits to the Partici-
pursuant.to Sections 6.05 and 6.06. It is anticipated that pant has been discharged and assumed by the other
the Employer's investments with respect to a Participant employer. The Employer may require such docu-
will conform to the investment preference specified in mentation from the other plan as it deems necessary
the Participant's joinder Agreement, but nothing herein to effectuate the transfer, to confirm that such plan
shall be construed to require the Employer to make any is an eligible deferred compensation plan within the
particular investment of a Participant's Deferred Com- meaning of section 457 of the Code, and to assure
pensation. Each Participant shall receive periodic that transfers are provided for under such plan. Such
reports, not less fre4uetitly than annually, showing the transfers shall be made only under such circum-
then current value of his/her Account. stances as are permitted under section 457 of the
Code and the regulations thereunder.
6.09 Transfers:
6.10 Employer Liability: In no event shall the
(a) Incoming Transfers: A transfer may be accepted Employer's liability to pay benefits to a Participant
from an eligible deferred compensation plan main- under this Plan exceed the value of the amounts cred-
tained.by another employer and credited to a ited to the Participant's Account; neither the Employer
Participant's Account under the Plan if(I) the nor the Administrator shall be liable for losses arising
Participant has separated from service with that from depreciation or shrinkage in the value of any
employer and become an Employee of the Em- investments acquired under this Plan.
ployer, and (ii) the other employer's plan provides
that such transfer will be made. The Employer may
require such documentation from the predecessor
plan as it deems necessary to effectuate the transfer,
to confirm that such plan is an eligible deferred
compensation plan within the meaning of Section
457 of the Code, and to assure that transfers are
provided for under such plan. The Employer may
refuse to accept a transfer in the form of assets other
. . . .. .. . . ... . . ... . . . . .. . . . . .. . . . . .. . . . . .. . . . . .. . . . . . . . . . . .. . . . . . . . . .... .. .. .. . . . . .. . . . . . . . . . . . . . . . . .. . ... .. . .
Seven
457 Deferred Compensation Plan and 'trust Document
November 1996
ARTICLE VII. BENEFITS (b) One lump-sum payment;
7.01 Retirement Benefits and Election on Separation (c) Approximately equal monthly, quarterly, semi-
from Service: Except as otherwise provided in this annual or annual payments, calculated to continue
Article VII, the distribution of a Participant's Account for a period certain chosen.by the Participant.
shall commence as of April 1 of the calendar year after
the Plan Year of the Participant's Retirement, and the (d) Annual Payments equal to the minimum distri-
distribution of such Retirement benefits shall.be made butions required under Section 401(a)(9) of the
in accordance with one of the payment options de- Code over the life expectancy of the Participant or
scribed in Section 7.02. Notwithstanding the foregoing, over the life expectancies of the Participant and his
but subject to the following paragraph of this Section Beneficiary.
7.01, the Participant may irrevocably elect within 60_
days following Separation from Service to have the (e) Payments equal to payments made.by the issuer
distribution of benefits commence on a fixed determin- of a retirement annuity policy acquired by the
able date other than that described in the preceding Employer.
sentence which is.,-.at least 61 days after Separation from.
Service, but not later than April 1 of the year following (f) A split distribution under which payments under
the year of the Participant's Retirement or attainment options (a), (b), (c) or (e) commence or are made at
of age 70-1/2, whichever is later. Notwithstanding the the same time, as elected by the Participant under
foregoing provisions of this Section 7.01, no election to Section 7.01, provided that all payments commence
defer the commencement of benefits after a separation (or are made) by the latest benefit commencement
from service shall operate to defer the distribution of date under Section 7.01 and that once a payment is
any amount in the Participant's Loan Account in the made subsequent payments will be made in substan-
event of a default of the Participant's loan. tially nonincreasing amounts.
Effective on or after January 1, 1997, the Participant (g) Any payment option elected by the Participant
may elect to defer the commencement of distribution of and agreed to by the Employer and Administrator,
benefits to a fixed determinable date later than the date provided that such option must provide for substan-
described above, but not later than April 1 of the year tially nonincreasing payments for any period after
following the year of the Participant's retirement or the benefit commencement date under Section 7.01.
attainment of age 70-1/2, whichever is later, provided
(a) such election is made after the 61st day following A Participant's or Beneficiary's selection of payment
Separation from Service and before commencement of option made after December 31, 1995, under Subsec-
distributions and (b) the Participant may make only one tions (a), (c), or (g) above may include the selection of
(1) such election. Notwithstanding the foregoing, the an automatic annual cost-of-living increase. Such
Administrator, in order to ensure the orderly adminis- increase will be based on the rise in the Consumer Price
tration of this provision, may establish a deadline after Index for All Urban Consumers (CPI-U) from the third
which such election to defer the commencement of quarter of the last year in which a cost-of-living in-
distribution of benefits shall not be allowed. crease was provided to the third quarter of the current
year. Any increase will be made in periodic payment
7.02 Payment Options: As provided in Sections 7.01, checks beginning the following January. The first cost-
7.04 and 7.05, a Participant or Beneficiary may elect to of-living increase will be based on the rise in the CPI-U
have value of the Participant's Account distributed in from the third quarter of 1995 to the third quarter of
accordance with one of the following payment options, 1996, and will be applied to a►nounts paid beginning
provided that such option is consistent with the limita- January 1997.
tions set forth in Section 7.03.
A Participant's or Beneficiary's election of a payment
(a) Equal monthly, quarterly, semi-annual or annual option must be made at least 30 days before the pay-
payments in an amount chosen by the Participant, ment of benefits is to commence. If a Participant or
continuing until his/her Account is exhausted; Beneficiary fails to make a timely election of a payment
option, benefits shall be paid monthly under option (c)
. . . .. . . . . .. . . . . .. . . . .. . . . . . . . . . . . ... . . ... . . . . .. . . . . . . . . . . ... . . . . . . . . . .. . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . .. .. .. . .
Eight
Above for a period of five years or such shorter period of (b) If the designated Beneficiary does not continue
time necessary to ensure that the amount of any install- to live for the remaining period of payments under
ment is not less than S1,200 per year, without the the payment option, then the commuted value of
inclusion of a cost-of-living increase. any remaining payments under the payment option
shall be paid in a lump sum to the estate of the
7.03 Limitation on Options: No payment option may be Beneficiary. In the event that the Participant's estate
selected by a Participant under subsections 7.02(a) or (c) is the Beneficiary, the commuted value of any
unless the amount of any installment is not less than remaining payments.under the payment option shall
S1,200 per year. No payment option may be selected be paid to the estate in a lump sum.
by a Participant or Beneficiary under Sections 7.02,
7.04, or 7.05 unless it satisfies the requirements of 7.05 Pre-retirement Death Benefits:
Sections 401(a)(9) and 457(d)(2) of the Code, including
that payments commencing before the death of the (a) Should the Participant die before he has begun
Participant shall satisfy the incidental death benefits to receive the benefits provided by Section 7.01, the
requirement under section 457(d)(2)(B)(i)(1). A cost-of- value of the Participant's Account shall be payable
living increase included as part of a payment option to the Beneficiary commencing within the 30-day
selected under Section 7.02 shall not be considered to period commencing on the 91st day after the
fail to satisfy the requirement under section 457(d)(2)(b) Participant's death, unless the Beneficiary elects a
that any distribution made over a period of more than 1 different fixed or determinable benefit•commence-
year can only be made in substantially nonincreasing ment date within 90 days of the_Participant's death.
amounts. Unless otherwise elected by the Participant Such benefit commencement date shall be not later
(or spouse, in the case of distributions described in than the later of(I) December 31 of the year fol-
Section 7.05 below) by the time distributions are lowing the year of the Participant's death, or (ii) if
required to begin, life expectancies shall be recalculated the Beneficiary is the Participant's spouse, Decem-
annually. _Such eleccioa shall be irrevocable as to the ber 31 of the year in which the.Participant would
Participant (or spouse) and shall apply to all subsequent have attained age 70-1/2.
years. The life expectancy of a nonspouse Beneficiary
may not be recalculated. (b) Unless a Beneficiary elects a different payment
option prior to the benefit commencement date,
death benefits under this Section shall be paid in
7.04 Post-retirement Death Benefits: approximately equal annual installments over five
years, or over such shorter period as may be neces-
(a) Should the Participant die after he/she has begun sary to assure that the amount of any annual install-
to receive benefits under a payment option, the ment is not less than 53,500. A Beneficiary shall be
remaining payments, if any, under the payment treated as if he/she were a Participant for purposes
option shall be payable to the Participant's Benefi- of determining the payment options available under
ciary within the 30-day period commencing with Section 7.02, provided, however, that the payment
the 61st day after the Participant's death, unless the option chosen by the Beneficiary must provide for
Beneficiary elects payment under a different pay- payments to the Beneficiary over a period no longer
ment option that is available under Section 7.02 than the life expectancy of the Beneficiary, and
within 60 days of the Participant's death. Any provided that such period may not exceed (15) years
different payment option elected by a Beneficiary if the Beneficiary is not the Participant's spouse.
under this section mist provide for payments at a
rate that is at least as rapid under the payment (c) In the event that the Beneficiary dies before the
option that was applicable to the Participant. In no payment of death benefits has commenced or been
event shall the Employer or Administrator be liable completed, the remaining value of the Participant's
to the Beneficiary for the amount of any payment Account shall be paid to the estate of the Benefi-
made in the name of the Participant before ciary in a lump sum. In the event that the
the Administrator receives proof of death of the Participant's estate is the Beneficiary, payment shall
Participant. be made to the estate in a lump sum.
. . . .. ... . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . .. . . . . .. . . . . .. . . .. . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . .. . . ;
,v i
457 Defe "d Compensation Plan and Tru orument
November 1996
7.06 Unforeseeable Emergencies: ARTICLE Vill. LOANS TO PARTICIPANTS
(a) In the event an unforeseeable emergency occurs, 8.01 Availability of Loans to Participants:
a Participant may apply to the Employer to receive
that part of the value of his/her Account that is (a) Effective January 1, 1997, the Employer may
reasonably needed to satisfy the emergency need. If elect to make loans available to Participants in this
such an application.is approved by the Employer, Plan. If the.Employer,has,elected-to make-.loans
the Participant shall be paid only such amount as-the available to Participants, a Participant may apply for
Employer deems necessary to meet the emergency a loan from the Plan subject to the limitations and
need, but payment shall not be made to the extent other provisions of this.Article.
that the financial hardship may be relieved through
cessation of deferral under the Plan, insurance or (b) The Employer shall establish written guidelines
other reimbursement, or liquidation of other assets governing the granting of loans, provided that such
to the extent such liquidation would not itself cause guidelines are approved by the Plan Administrator
severe financial hardship. and are not inconsistent with the provisions of this
Article, and that loans are made available to all
(b) An unforeseeable emergency shall be deemed to Participants on a reasonably equivalent basis.
involve only circumstances of severe financial
hardship to the Participant resulting from a sudden 3.02 Terms and Conditions of Loans to Participants:
unexpected illness, accident, or disability of the Any loan by the Plan to a Participant under Section
Participant or of a dependent (as defined in section 8.01 of the Plan shall satisfy the following requirements:
152(a) of the Code) of the Participant, loss of the
Participant's property due to casualty, or other (a) Availability. Loans shall be made available to all
similar and extraordinary unforeseeable circum- Participants on a reasonably equivalent basis.
stances arising as a result of events beyond the
control of the Participant. The need to send a (b) Interest Rate. Loans must be adequately secured
Participant's child to college or to purchase a new and bear a reasonable interest rate.
home shall not be considered unforeseeable emer-
gencies. The determination as to whether such an (c) Loan Limit. No Participant loan shall exceed the
unforeseeable emergency exists shall be based on the present value of the Participant's Account.
merits of each individual case.
(d) Foreclosure. In the event of default on any
7.07 Transitional Rule for Pre-1989 Benefit Elections: installment payment, the outstanding balance of the
In the event that, prior to January 1, 1989, a Participant loan shall be a deemed distribution. In such event,
or Beneficiary has commenced receiving benefits under an actual distribution of a plan loan offset amount
a payment option or has irrevocably elected a payment will not occur until a distributable event occurs in
option or benefit commencement date, then that pay- the Plan.
ment option or election shall remain in effect notwith-
standing any other provision of the Plan. (e) Reduction of Account. Notwithstanding any
other provision of this Plan, the portion of the
7.08 be Minimis Accounts: Notwithstanding the fore- Participant's Account balance used as a security
going provisions of this Article, if the value of a interest held by the Plan by reason of a loan out-
Participant's Account does not exceed S3,500 and (a) no standing to the Participant shall be taken into
amount has been deferred tinder the Plan with respect account for purposes of determining the amount of
to the Participant during the 2-year period ending on the Account balance payable at the time of death or
the date of the distribution and (b) there has been no distribution, but only if the reduction is used as
prior distribution under the Plan to the Participant repayment of the loan.
pursuant to this Section 7.08, the Participant may elect
to receive or the Employer may distribute the Participant's
entire Account without the consent of the Participant.
Such distribution shall be made in a lump sum.
. . . . .. .. . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . .. . . . . . . . ...... . . . .. . . . . .. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .. . . . .
:. -- T e n
i C M A__ R-E T i REM E N T C O R PO RAT ' D N
(f) Amount of Loan. At the time the loan is made, (within such term) instituted at the end of such
the.principal amount of the loan plus the outstand- period of suspension.
ing balance (principal plus accrued interest) due on
any other outstanding loans to the Participant from (i) Prepayment. The Participant shall be permitted
the Plan and from all other plans of the Employer to repay the loan in whole or in part at any time
that are qualified employer plans under section prior to maturity, without penalty.
72(p)(4) of the Code shall not exceed the least of:
0) Promissory Note. The loan shall be evidenced
(1) $50,000, reduced by the excess (if any) of by a promissory note executed by the Participant
and delivered to the Employer, and shall bear
(a) The highest outstanding balance of loans interest at a reasonable rate determined by the
from the Plan during the one (1) year Employer.
period ending on the day before the date
on which the loan is made, over (k) Security. The loan shall be secured by an
assignment of the Participant's right, title and
(b) The outstanding balance of loans from the interest in and to his/her Account.
Plan on the date on which such loan is
made; or (1) Assignment or Pledge. For the purposes of
paragraphs (0 and (g), assignment or pledge of any
(2) One-half of the value of the Participant's portion of the Participant's interest in the Plan and a
interest in all of his/her Accounts under loan, pledge, or assignment with respect to any
this Plan. insurance contract purchased under the Plan, will be
treated as a loan.
(g) Application for Loan. The Participant must
give the Employe r.adequate written notice, as (m) Other Terms-and Conditions. The Employer
.determined by the Employer, of the amount and shall fix such other terms and conditions of the loan
desired time for receiving a loan. No more than as it deems necessary to comply with legal require-
one (1) loan may be made by the Plan to a Partici- merits, to maintain the qualification of the Plan and
pant in any calendar year. No loan shall be ap- Trust under section 457 of the.Code, or to prevent
proved if an existing loan from the Plan to the the treatment of the loan for tax purposes as a
Participant is in,default to any extent. distribution to the Participant. The Employer, in
its discretion for any reason, may fix other terms
(h) Length of Loan. Any loan issued shall require and conditions of the loan, not inconsistent with
the Participant to repay the loan in substantially the provisions of this Article and section 72(p) of
equal installments of principal and interest, at least the Code.
monthly, over a period that does not exceed five (5)
years from the date of the loan; provided, however, 8.03 Participant Loan Accounts:
that if the proceeds of the loan,are applied by the
Participant to acquire any dwelling unit that is to be (a) Upon approval of a loan to a Participant by the
used within a reasonable time (determined at the Employer, an amount not in excess of the loan shall
time the loan is made) after the loan is made as the be transferred from the Participant's other invest-
principal residence of the Participant, the five (5) ment fund(s), described in Section 6.05 of the Plan,
year limit shall not apply. In this event, the period to the Participant's Loan Account as of the Account-
of repayment shall not exceed a reasonable period ing Date immediately preceding the agreed upon
determined by the Employer. Principal installments date on which the loan is to be made.
and interest payments otherwise due may be sus-
pended for up to one (1) year during an authorized (b) The assets of a Participant's Loan Account may
leave of absence, if the promissory note so provides, be invested and reinvested only in promissory notes
but not beyond the original term permitted under received by the Plan from the Participant as consid-
this Subsection (h), with a revised payment schedule eration for a loan permitted by Section 8.01 of the
Plan or in cash. Uninvested cash balances in a
. . . .. . . . ... . . . . .. . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . .. .. . . . . . .. . . . . .. . . . . . . . .. ... . .. . .. . . . . .. . . . . . . . . . . . . . . . . . . . .
__.. - E I cy e - -
457 Deferred., Compensation Plan and Trust notu "fell t
November 1996
Participant's Loan Account shall not bear interest. Nothing in this Section shall be construed to autho-
Neither the Employer, the Administrator, nor any rize any amount to be distributed under the Plan at
other person shall be liable for any loss, or by reason a time or in a form that is not permitted under
of any breach, that results from the Participant's Section 457 of the Code. Any Payment made to a
exercise of such control. person other than the Participant pursuant to this
Section shall be reduced by required income tax
(c) Repayment of-principal and payment of..interest -withholding; the fact.that_payment.is made to a
shall be made by payroll deduction or, where person-other than the Participant may not prevent
repayment cannot be made by payroll deduction, by such payment from being includible in the gross
check, and shall be.invested in one (1) or more income of the Participant for withholding and
other investment funds, in accordance .with Section income tax reporting purposes.
6.05 of the Plan, as of the next Accounting Date
after payment thereof to the Trust. The amount so (b) Release.from Liability to Participant: The
invested shall be deducted from the Participant's Employer's liability to pay benefits to a Participant
Loan Account. shall be reduced to the extent that amounts have
been paid or set aside for payment to a spouse,
(d) The Employer shall have the authority to former spouse, or child pursuant to paragraph (a) of
establish other reasonable rules, not inconsistent the Section. No such transfer shall be effectuated
with the provisions of the Plan, governing the unless the Employer or Administrator has been
establishment and maintenance of Participant Loan provided with satisfactory evidence that the Em-
Accounts. ployer and the Administrator are released from any
further claim by the Participant with respect to such
ARTICLE IX NON-ASSIGNABILITY amounts. The Participant shall be deemed to have
released the Employer.and the Administrator from
9.01 In General: Except as provided in Article VIII any claim .with-respect to such amounts, in any case
and Section 9.02, no Participant or Beneficiary shall in which (i) the Employer or Administrator has been
have any right to commute, sell, assign, pledge, transfer served with legal process or otherwise joined in a
or otherwise convey or encumber the right to receive proceeding relating to such transfer, (ii) the Partici-
any payments hereunder, which payments and rights pant has been notified of the pendency of such .
are expressly declared to be non-assignable and proceeding in the manner prescribed by the law of
tion-transferable. the jurisdiction in which the proceeding is pending
for service of process in such action or by mail from
9.02 Domestic Relations Orders: the Employer or Administrator to the Participant's
last known mailing address, and (iii) the Participant
(a) Allowance of Transfers: To the extent required fails to obtain an order of the court in the proceed-
under final judgement, decree, or order (including ing relieving the Employer or Administrator from
approval of a property settlement agreement) made the obligation to comply with the judgment, decree,
pursuant to a state domestic relations law. any or order.
portion of a Participant's Account may be paid or
set aside for payment to a spouse, former spouse, or (c) Participation in Legal Proceedings: The Em-
child of the Participant. Where necessary to carry ployer and Administrator shall not be obligated to
out the terms of such an order, a separate Account defend against or set aside any judgement, decree, or
shall be established with respect to the spouse, order described in paragraph (a) any legal order
former spouse, or child who shall be entitled to relating to the garnishment of a Participant's ben-
make investment selections with respect thereto in efits, unless the full expense of such legal action is
the same manner as the Participant; any amount so borne by the. Participant. In the event that the
set aside for a spouse, former spouse, or child shall Participant's action (or inaction) nonetheless causes
be paid out in a lump sum at the earliest date that the Employer or Administrator to incur such ex-
benefits may be paid to the Participant, unless the pense, the amount of the expense may be charged
order directs a different time or form of payment. against the Participant's Account and thereby reduce
the Employer's obligation to pay benefits to the
. . . .. . . ... . . . . . . . . . . . . . ... . . . . . . . . . . . . . .. . . . . .. ... ... . ... .. . .. . . . . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . .. . .
Twclve
_ I C M A RETIREMENT C O R PORATION
Participant. In the course of any proceeding relating Except as may be required to maintain the status of the
to divorce, separation, or child support, the Em- Plan as an eligible deferred compensation plan under
ployer and Administrator shall be authorized to section 457 of the Code or to comply with other
disclose information relating to the Participant's applicable laws, no amendment or termination of the
Account to the Participant's spouse, former spouse, Plan shall divest any Participant of any rights with
or child (including the legal representatives of the respect to compensation deferred before the dace of the
spouse, former spouse, or child), or to a court. amendment or termination.
ARTICLE X. RELATIONSHIP TO OTHER PLANS ARTICLE X11. APPLICABLE LAW
AND EMPLOYMENT AGREEMENTS
This Plan and Trust shall be construed under the laws of
This Plan serves in addition to any other retirement, the state where the Employer is located and is estab-
pension, or benefit plan or system presently in existence -lished with the intent that it meet-the requirements of
or hereinafter established for the benefit of the - - an "eligible deferred compensation plan" under Section
Employer's employees, and participation hereunder shall 457 of the Code, as amended. The provisions of this
not affect benefits-receivable under any such plan or Plan and Trust shall be interpreted wherever possible in
system. Nothing contained in this Plan shall be deemed conformity with the requirements of that section.
to constitute an employment contract or agreement -
between any Participant and the Employer or to give ARTICLE X111. GENDER AND NUMBER
any Participant the right to be retained in the employ of
the Employer. Nor shall anything herein be construed The masculine pronoun, whenever used herein, shall
to modify the terms of any employment contract or include the feminine pronoun, and the singular shall
agreement between a Participant and the Employer. include the plural, except where the context requires
otherwise.
ARTICLE X1. AMENDMENT OR TERMINATION
OF PLAN
The Employer may at any time amend this Plan pro-
vided that it transmits such amendment in writing to the
Administrator at least 30 days prior to the effective date
of the amendment. The consent of the Administrator
shall not be required in order for such amendment to
become effective, but the Administrator shall be under
no obligation to continue acting as Administrator
hereunder if it disapproves of such amendment. The
Employer may at any time terminate this Plan.
The Administrator may at any time propose an amend-
ment to the Plan by an instrument in writing transmic-
red to the Employer at least 30 days before the effective
date of the amendment. Such amendment shall become
effective unless, within such 30-day period, the Em-
ployer notifies the Administrator in writing that it
disapproves such amendment, in which case such
amendment shall not become effective. In the event
of such disapproval, the :Administrator shall be under
no obligation to continue acting as Administrator
hereunder.
. .. . . ... . .. . . . . .. . . . .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . .. . .. . .. . .
Tit i►tecn
Res. No. 98-99
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 Civy
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 21st day of December, 1998 by the
following vote:
AYES: Bauer, Garofalo, Green, Dettloff, Harman, Sullivan
NOES: None
ABSENT: Julien
L�l1wr�,G
City Clerk and ex-officio Clerk of the
City Council of the City of Huntington
Beach, California
ATTACHMENT #2
CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach,California 92648
DEFERRED COMPENSATION TRUST
The City of Huntington Beach, California hereby revises the Huntington Beach Deferred
Compensation Plan and creates the City of Huntington Beach, California Deferred Compensation
Trust for its Employees (hereinafter called the Trust). The Trust consists of the provisions set
forth in this document and is applicable to each employee who adopts the Trust. The Trust is
effective as to each such employee upon the date he/she becomes a "Participant" by signing and
filing with the Trustee the Participation Agreement herein referred in Article V.
ARTICLE I
TRUST PURPOSE
1.1 The purpose of this Trust 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 Trust 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 Trust 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 Trust,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 Trust,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 Trust are derived as a result of the
Participant's death.
(c) EMPLOYEE means any person who is eligible to participate in either the Public
Employees'Retirement System(P.E.R.S.) or Public Agency Retirement System
- (P.A.R.S.) - .-.
(d) 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 Trust.
(h) TRUST ADMINISTRATOR shall mean the Deputy City Administrator/
Administrative Services.
(i) PROVIDER TRUST is a Trust created pursuant to an agreement between the City
of Huntington Beach and a vendor for the purpose of administrative and
investment services of funds set aside by the City of Huntington Beach in
connection with the employee deferred compensation Trust agreements.
(j) TRUSTEE shall-mean the City of Huntington Beach
(k) TRUSTEE COMMITTEE means persons appointed by the Trust
Administrator to assist and advise the administrator of this Trust.
(1) CODE means Section 457 of 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
ADNIINISTRATION
3.1 This Trust shall be administered by the Trust Administrator who shall represent the
Employer in all matters concerning the administration of this Trust.
3.2 The Trustee Committee shall recommend services, as necessary to establish, administer
and maintain this Trust under the Trust Administrators' direction.
3.3 The Trust Administrator is authorized to adopt, amend,or revoke rules for the
- administration of the Trust. -. -
2
ARTICLE IV
ELIGIBILITY
4.1 Only employees as defined in Section 2.1 may defer Compensation under this Trust.
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 preference for investment. The Participant may designate
Beneficiaries in the Participation Agreement.
5.3 The Participant Agreement shall remain in effect until it is modified or revoked in
accordance with rules established by the Trust Administrator. A former Participant,who
is an eligible Employee,may again become a Participant by entering a new Participation
Agreement as provided for by the Trust 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 Trust shall be subject to minimum amounts
which the Trust Administrator may specify and maximum amounts set forth in Sections
5.6 and 5.7.
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 regard Section 457 of the Code) for the taxable year or$7,500,
whichever is less or the maximum allowed by the Code.
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 lessor the maximum allowed by the Code,.-__.
(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 -
3 .
1
5.6 less any amount previously deferred) for any prior taxable years in which the
Participant was eligible to participate in this Trust or another eligible Trust. A
prior taxable year can be taken into account only if such taxable year began after
December 31, 1978.
(c) The Participant may.only.utilizethe.catch up provisions once,regardless of
whether the Participant fully utilizes these provisions or-rejoins the Trust.
5.8 In the case of Employees who participate in another Trust 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 Trust(including amount 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 Participant
and shall be held in Trust until paid or otherwise made available to the Participant or
Beneficiary under this Trust.
6.2 The Participant or Beneficiary shall have a beneficial interest in the Trust account.
6.3 The right to receive any payments.under this Trust are non-transferable. Any attempt to
assign or transfer shall not be recognized and shall impose no liability upon the Trust
Administrator.
6.4 Except as otherwise required by law,Amounts Deferred under this Trust 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.
ARTICLE VII
INVESTMENTS
7.1 The Trust Administrator is authorized to select and enter into contracts with Trust
Providers selected to provide the investment products for this Trust.
7.2 At the time of enrollment each Participant may designate preferences as provided by the
Trust Provider for the investment of Amounts Deferred by the Participant.
7.3 Designation, changes or revocations of investment preferences shall be made in
accordance with rules established by the Code.
4
7.4 Any action taken by the Trust Administrator or Trustee 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 Trustee,Trust Administrator,Trustee Committee or
Trust Providers are not liable to any Participant for investment results.
ARTICLE VIII
ACCOUNTS AND REPORTS
8.1 To facilitate orderly administration of the Trust,the Trust Administrator shall
maintain a deferred compensation account for each Participant.
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 Trust, 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 Trust Administrator.
.ARTICLE IX
. .BENEFITS
9.1 Benefits under this Trust 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 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. - - - - - -=
_ 5
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 Code. Additionally, a participant may irrevocably
elect 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
Code. In the absence of.an election of the method for payment of benefits shall be
paid in accordance with-the Code.
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 Beneficiary entitled to receive the
Participant's benefits shall have all 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 Trust
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 in accordance with the Code to the _
extent reasonably-needed to satisfy-the emergency and shall be paid as directed by Trust
---- - 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 Trust;
(b) Cessation of deferrals under the Trust; or
(c) Liquidation of the Participant's assets,to the extent that the liquidation of
assets would not itself cause severe financial hardship.
6
ARTICLE XI
TRANSFERS BETWEEN EMPLOYERS UNDER THIS TRUST
11.1 In the event a Participant changes employment from the employer of this Trust,the
change in employment shall not be considered as a separation from service under this
Trust. The Participant!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 under the new Employer's Trust. The new Employer then shall maintain the
Participant's rights under its Trust.
ARTICLE XII
TRUST-TO-TRUST TRANSFERS
12.1 When a Participant separates from service (i.e.,no longer employed by an Employer
under this.Trust),benefits shall not be-payable upon separation-from services;-regardless
of any other provision of this Trust, and Amounts Deferred by the Participant may be
transferred to another employer Trust if the following conditions exist:
-(a) The Participant separates from service to accept employment with an entity
which has an eligible Trust
(b) The Participant has become a-Participant in the eligible Trust of that entity; and
(c) The eligible Trust of that entity accepts the transfer of previously deferred
amounts under another eligible Trust.
12.2 This Trust shall accept the transfer of a Participant's previously deferred amounts under
another eligible Trust which has a Trust-to-Trust transfer.provision.- __-_-._-.__--_-_. ...__._. -_-.-_
ARTICLE XIII
AMENDMENT OR TERNIINATION OF THE TRUST
13.1 The Trustee is authorized to amend this Trust or adopt a new Trust in accordance
with IRS code. 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 In the event the Trustee amends an existing Trust, adopts a new Trust or revokes future
contributions in a Trust,these changes will not eliminate the participant's rights under
the old Trust or Trust providers, if it continues to exist. The participant will have the
- ---- option of maintaining existing investments with the old Trust or transferring all, or a
7
portion of those investments to another available Deferred Compensation Trust approved
by the Trustee, as allowable under the Code.
ARTICLE XIV
MISCELLANEOUS
14.1 - . The Trust Administrator,the Trustee,the Trustee Committee and Trust Providers shall be
held harmless by the.Participant and the Participant's Beneficiaries,-heirs, successors, and
assignees for all acts.performed under the Trust in-good faith,including,but not limited
to the investment of Amounts Deferred.
14.2 The Trust Administrator or Trustee does not represent or guarantee that any-particular
federal or state tax consequences will occur because of participation in this Trust.
14.3 The Trustee shall indemnify and hold harmless the Trust Administrator and Trustee
Committee, for acts performed under the Trust in good faith.
ARTICLE XV
APPLICABLE LAW
15.1 This Trust,which is intended to be zn eligible deferred compensation Trust within
the meaning of Section 457 of.the Code.-shall be interpreted consistent with that
Section and all-regulations regarding that Section.
8
ATTACHMENT #3
LEGISLATIVE DRAFT
EXHIBIT"A"
CITY OF HUNTINGTON BEACH
.2000 Main Street
Huntingtop::Beach,,Califomia:92648
DEFERRED.COMPENSATION-PLAN-TRUST
The City of Huntington Beach,:California hereby revises the,City.of Huntington Beach,
California, Deferred Compensation Plan and creates the City of Huntington.Beach, California
Deferred Compensation Trust for its Employees (hereinafter called the Pfan Trust). The Plan Trust
consists of the provisions set forth in this document and is applicable to each employee who adopts
the Trust Plan. The Trust Plan is effective as to each such employee upon the date he/she becomes
a "Participant" by signing and filing with the Trustee Plan AdministFata the Participation Agreement
herein referred in Article V.
ARTICLE I
TRUST PURPOSE
1.1 The purpose of this Trust Plan is to allow Employees to defer a portion of their
- compensation to.a future time. Such compensationwill-be•withheld by-the Employer
each pay period and will be invested in the manner allowed.
1.2 Amounts Deferred under this Trust 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 Trust 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 11
DEFINITIONS
2.1 Whenever used in this Trust Pan, 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 Trust Plan,
plus any income resulting from the investment of the compensation withheld.
1
3Wq JattymisdpersdrftW6197
(b) BENEFICIARY means a person designated by a Participant, a Participant's
estate, or any person, whose rights under this Trust Plan are derived as a result
of the Participant's death. .
assist and advise the administFat&of this plan.
(d)(c) : EMPLOYEE means:any,person:who is.eligible to-participate in either the Public
Employees' Retiremenf.System:(P:E:R.S.)-or Public Agency Retirement
System (P.A.R.S
(e)(d) 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 Trust
PU-m.
N(h) TRUST PLAN ADMINISTRATOR shall mean the Deputy City
Administrator/Administrative Services.
(i) PROVIDER TRUST is a Trust created pursuant to an agreement between
the City of Huntington Beach and a vendor for the purposes of
administrative and investment services of funds set aside by the City of
Huntington Beach in connection with the employee deferred compensation -.-
-_..--Trust agreements. - -----=------- -- - -- -
(j) TRUSTEE shall mean the City of Huntington Beach.
(k) THE TRUSTEE COMMITTEE means persons appointed by the Trust
Administrator to assist and advise the administrator of this plan.
(4)(1) CODE means Section 457 of the 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.
2 -_
3/k/gJattym1sc/persdrf W7/97
ARTICLE III
ADMINISTRATION
designee.
.3-.2(3.1) This Trust Wan shall be administered by the Trust Wan Administrator who shall
represent the Employer in all matters concerning the administration of this Trust
Wan.
34(3.2) The Trustee Committee shall recommend Fnay engage services, as necessary,
to establish, administer, and maintain this Trust Wan under the Trust Wan
Administrators' direction.
3-.4(3.3) The Trust Wan Administrator is authorized to adopt, amend, or revoke rules for
the administration of the Trust Wan.
ARTICLE IV
ELIGIBILITY
4.1 Only employees of an empleyef as defined in Section 2.1 may defer Compensation en
under this pan Trust.
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 Vil.
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 Trust Wan 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 Trust Wan 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.
3 —_
3/k/gJattym1sc1persdrft/3/2M7 _ . _
5.5 Compensation to be deferred under this Trust Phan shall be subject to minimum
amounts which the Trust PUA 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, whichever is less or.the.maximum allowed by.the Code., wh;Gheyer`s hies
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 or the maximum allowed by the Code.
(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 Trust elan or another eligible plan
Trust. 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 Trust F4c
5.8 In the case of Employees who participate in another Klan Trust 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 Trust PUA (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
Participant and shall be held EmpleyeF,
of the gmpleyeF , in Trust asssunt-until paid or otherwise made available to the
Participant or Beneficiary under this Trust Plan.
6.2 The Participant or Beneficiary shall have a beneficial interest in the Trust account. Te
the extent that the PadiGipaRt OF 13enefiGiaF hpnpfib;
y aGqUiFes a Fight to the payment
- -
Under-this P{ah,
EmploeT.
4 — .
3WgJattymisc/persdrftrM6/97._. .
6.3 The right to receive any payments under this Trust Plan are 1ble and non-
transferable. Any attempt to assign or transfer shall not be recognized and shall
impose no liability upon the Trust P as Administrator.
6.4 Except as otherwise required by law, Amounts Deferred under this Trust P4.am shall not
be subject to attachment;garnishment;or-execution.or.be transferable.by-,operation of
law in the event of bankruptcy or insolvencyof the Participant or otherwise.
.ARTICLE VII
INVESTMENTS ,
7.1 The Trust P4an Administrator is authorized to select and enter into contracts with-the
eempanles Trust Providers selected to provide the investment products for this Trust
lam.
. 74 The.Plan AdMiniStFatOF is-authenzed to deteFFnine the type of investment pFeduds
undeF the Plan The Plan A dMini tFater may also direst that . dditieRal investment
7-4 7.2At the time of enrollment each Participant may:designate preferences as pFevlded
allewed•by the Trust Provider for-the investment of Amounts
Deferred by the Participant
available undeF the Plan. HeweyeF, the-designation of investment PFefeFeAGes dGes
7w.47.3 Designation, changes or revocations of investment preferences shall be made in
accordance with rules established by the Plan AdFAiniStFate Code.
_ 7 57.4 Any action taken by the Trust P4-m-Administrator or Trust 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 GUy Trustee, Trust P4an Administrator, Trust
Committee orbs-Trust Providers are not liable to any Participant for investment
results.
ARTICLE Vill
ACCOUNTS AND REPORTS
8.1 To facilitate any orderly administration of the Trust PlaA, the Trust PUan Administrator
shall maintain a deferred compensation account for each Participant. , the
FnaintenanGe of the aGGGunt does not give the PaFtiripaRt any Fights eXGept as
othenvise ►FOyi lend in this Plan- - - - - -
5 —_
- - 31WgJattym1sc/persdrft/3/27/97
f-
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 Vill, any costs for implementing and administering the Trust 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"Trust Plate
Administrator.
ARTICLE IX
BENEFITS
9.1 Benefits under this Trust PUn 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 withdrawals under Article X)from among the options
made available by the Code Plan AdFAiRiStFate . Additionally, a Participant may
irrevocably elect hefere-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 Code Plan AdministFate . In the absence of an election of the
method for payment of benefits, benefits shall be paid in accordance with the Code
PlaA A dMiniStFa�nr n ule-
TQ1'1'7"CGTf 7T1'T�o7LTGSV TTQT4�.
6 —
3Ik/g Jattymisc/persd r ilW7/97
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 Beneficiary entitled to receive
the Participant's benefits shall have all the rights of the Participant.
ARTICLE X
UNFORESEEABLE_EM ERG ENCY
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
Trust Pk-A 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 in accordance with the Code by the
Plan AdministFatOF to the extent reasonably needed to satisfy the emergency and shall
be paid as directed by Trust P4aR 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 Trust Pic-A;
(b) Cessation of deferrals under the Trust P4aa; 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 RL-AN TRUST
11.1 In the event a Participant changes employment from one Employerer of this Trust
PUiA, the change in employment shall not be considered as a separation from service
under this Trust ice. The Participant's deferred compensation account shall continue
in full force and effect.
11.2 The Amounts Deferred in the Participant's account maybe transferred to and become
an asset of the new Employer's Trust. The new Employer then shall maintain the
Participant's rights under its Trust fit. - - - -- -
7 —
3!k/gJattymisGpersdrf W7/97. -.- - - ---- - -- -----...._---
t-
ARTICLE XII
PIAN-TRUST TO-PL=AN TRUST TRANSFERS
12.1 When a Participant separates from service (i.e., no longer employed by an Employer
under this Trust Plan), benefits shall not be payable upon separation from services,
regardless of any other provision.of.this Trust Plan, and Amounts Deferred by the
Participant maybe transferred;to-another_employer Trust if the fo(lowing:conditions
exist:
(a) The.Participant-separates from service to-accept employment with an entity
which has an eligible i Trust.
(b) The Participant has.become a Participant in.the.eligible plan Trust of that entity;
and
(c) The eligible plan Trust of that entity accepts the transfer of previously deferred
amounts under another eligible plan.
.12.1 This Trust.-Plan shall accept.the-transfer.of a,Participant's previously.deferred amounts
under another eligible plan Trust which has a plan-Trust to-plan Trust transfer
provision.
ARTICLE XIII
AMENDMENT-OR TERMINATION OF THE PLAN
13.1 The Gity-Sewnsil Trust is authorized to amend this Trust Plan or adopt a new plan
Trust at-ante-in-accordance with IRS code. 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 Gity GeunGil is authe4zed to teFminate this Plan at any time. in the event of.
teFmination, the PaFtiGipaRts in this Plan will be GGAsideFed as having withdFaWR WFA
the Plan as of the date ef teFMination of the Plan. PaFtiripants shall be tFeated as
and beRefits shall be
• ,
payable cis PuFswant to the
13.2 In the event the Trustee amends an existing Trust, adopts a new Trust or revokes future
contributions in a Trust, these changes will not eliminate the participant's rights under
the old Trust or Trust providers, if it continues to exist. The participant will have the
option of maintaining existing investments with the old Trust or transferring all, or a
portion of those investments to another available Deferred Compensation Trust
approved by the Trustee, as allowable under the Code.
8
3/k/gJattym1sc/persdrftW6/97
:Y •
J� .
ARTICLE XIV
MISCELLANEOUS
on the P-RA;Gipants and BeneftiaFies-.
44.214.1 The Trust Pan Administrator, the€-mpleyer-Trustee, the Trust Committee and
theiF agents Trust Providers shall be held harmless by the Participant and the
Participant's Beneficiaries, heirs; successors, and assignees for all.acts performed
under the Trust P4an in good faith, including but not limited to the investment of
Amounts Deferred.
44-.314.2 The Trust'P4an-Administrator or Trust Empleyef does not represent or
guarantee that any particular federal or state tax consequences will occur because of
participation in this Trust flan.
44414.3 The€mpleyef Trustee shall indemnify and hold harmless the Trust Ran
Administrator, Trust Committee, and agents for acts performed under the plan Trust in
good faith.
ARTICLE XV
APPLICABLE LAW
45.4 This TFUSt Plan shall be G.GnStFued undeF the laws of the State Of GalifGFnia.
15.215.1 This Trust Plan, which is intended to be an eligible state deferred compensation
p4an Trust within the meaning of Section 457 of the Code, shall be interpreted
consistent with that Section and all regulations regarding that Section.
g --
3/WgJattym1sGpersdrftW6/97-
ATTACHMENT #4
REQUEt FOR CITY COUNCIL ACTION P R Y
41 91
Date December 2; 1991 MANAGEMENT
APPROVED By CITY CVUNCIL
Submitted to: Honorable Mayor and City Council
Submitted by: Michael T. Uberuaga, City Administrator �9 1
Prepared by: Robert J. Franz, Deputy City Administrator TYxx
Subject: Revision of Deferred Compensation Plan
Consistent with Council Policy? M Yes [ ] New Policy or Exception P G 3�
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.
i --
0214U
1
P I a WAS
� r
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
. :. Hunting:ton Beach at a regular meeting thereof held on
the 211d day of December 1991 .
Mayor
ATTEST: APPROVED AS TO FORM:
- City Clerk Cit me
REVIEWED AND APPROVED: TE A ED:
f ,
i 'y Administrator erect Adm' nistr ive
Services I,
- 2 -
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 -
(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 Benefi.ciaries 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 -Partici.pan.t -was
eligible to participate in thi.s _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 -
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 au.tho.r:ized to -determine the
type .of inves.tment .products .and the number of companies
for each type of A nvestment product that will be
available under the Plan. The Plan Administrator may
also direct that additional . investments _sha.11 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 .des.ignation 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 -
ARTICLE IX
BENEFITS
.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 _unfo.reseeable emergency. as
provided in Article X.
9 . 2 Election of benef•its .shall take place no later .than 60
days after the c:lose. .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_ benefic.iary 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 -
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 . Par .i:ci.p.ant 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 Participant ' 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
7 -
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 -
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 -
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:
None
ABSENT: Councilmembers:
None
y U I erk and ex-ofricio er
of the City Council of the City
of Huntington Beach, California
RCA ROUTING SHEET
INITIATING DEPARTMENT: Administrative Services
SUBJECT: Approve Revision of Deferred Compensation Plan
COUNCIL MEETING DATE: December 21 , 1998
RCA ATTACHMENTS-
STATUS-
Ordinance (w/exhibits & legislative draft if applicable) Not Applicable
Resolution (w/exhibits & legislative draft if applicable) Attached
Tract Map, Location Map and/or other Exhibits Not Applicable
Contract/Agreement (w/exhibits if applicable)
(Signed in full by the City Attorney) Not Applicable
Subleases, Third Party Agreements, etc.
(Approved as to form by City Attorney) Not Applicable
Certificates of Insurance (Approved by the City Attorney) Not Applicable
Financial Impact Statement (Unbudget, over $5,000) . Not Applicable
Bonds (If applicable) Not Applicable
Staff Report (If applicable) Not Applicable
Commission, Board or Committee Report (If applicable) Not Applicable
Findings/Conditions for Approval and/or Denial Not Applica e
'EXPLANATION FO:R MISSING ATTACHMENTS:
REVIEWED RETURNED FOR DED
Administrative Staff ( ) ( )
Assistant City Administrator (initial) ( ) ( )
City Administrator (Initial) ( ) ( )
City Clerk ( )
EXPLANATION FOR RETURN OF ITEM
Only)(Below Space For City Clerk's Use
RCA Author: Dan T. Villella