HomeMy WebLinkAbout2002-178
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RESOLUTION NO. 2002-178
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING
SUBMISSION OF AN AMENDED CITY OF SAN BERNARDINO DEFERRED
COMPENSATION PLAN IN ACCORDANCE WITH THE FEDERAL
GOVERNMENT'S "ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION
ACT OF 2001",
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BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE
7 CITY OF SAN BERNARDINO AS FOLLOWS:
8 Section 1. The Mayor of the City of San Bernardino is hereby authorized and directed
9 to submit to National Deferred Compensation on behalf of said City an amended City of San
10 Bernardino Deferred Compensation Plan that incorporates changes as a result of the Federal
11 Government's "Economic Growth and Tax Relief Reconciliation Act of2001" (EGTRRA). A
12 copy of the amended City of San Bernardino Deferred Compensation Plan is attached hereto and
13 incorporated herein by reference as fully as though set forth at length.
14 Section 2, This amended City of San Bernardino Deferred Compensation Plan shall
15 supersede and thus render null and void all prior submittals of plans and amendments thereto.
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BCL:C;\Windows\DESKTOP\Plan Document\DefComp EGTRRA Reso.doc
2002-178
1
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING
SUBMISSION OF AN AMENDED CITY OF SAN BERNARDINO DEFERRED
COMPENSATION PLAN IN ACCORDANCE WITH THE FEDERAL
GOVERNMENT'S "ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION
ACT OF 2001",
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5 I HERBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
6 Common Council of the City of San Bernardino at a j oint regular
meeting thereof, held
7 on the 1st day of July , 2002, by the following vote, to wit:
8 Council Members: AYES NAYS ABSTAIN ABSENT
9 ESTRADA X
10 LIEN x
11 MCGINNIS -1L-
12 DERRY ----X-
13 SUAREZ X
14 ANDERSON X
15 MCCAMMACK X
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)4(lJ1dM0}~ ~cb1)
CITY CLERK (}
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The forgoing Resolution is hereby approved this 3D.i day of July
,2002.
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Approved as to form
and legal content:
J ith Valles, Mayor
'ty of San Bernardino
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JAMES F. PENMAN,
City Attorney
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:C:\Windows\DESKTOP\Plan Document\DefComp EGTRRA Reso.doc
2002-178
CITY OF SAN BERNARDINO
RESTATED AND AMENDED IRC 457 NON QUALIFIED DEFERRED COMPENSATION
PLAN AND TRUST/CUSTODIAL DOCUMENT
FOR PUBLIC EMPLOYEES
The Plan consists of the provisions set forth in this document, and is applicable to each
Participant who elects to participate in the Plan. The Plan is effective as to each such Participant
upon the date he becomes a Participant by executing a Participation Agreement with the
Administrator .
Section 1.
Name:
The name of this Restated and Amended Deferred Compensation Plan and Trust/Custodia]
Document is the City of San Bernardino, State of California, Deferred Compensation Plan,
hereinafter referred to as the "P]an". This Plan is the continuation in restated form of the City of
San Bernardino Deferred Compensation Plan initially established by the City of San Bernardino
Reso]ution 1 ]817 on June 20,1974, and amended numerous times thereafter.
Section 2.
Purpose:
The primary purpose ofthe Plan is to attract and retain personnel by permitting them to enter into
agreements with the Employer that will provide for deferral of payment of a portion of current
Compensation until death, retirement, termination of employment, or other events as provided
herein, in accordance with applicable provisions of State law, and applicable Sections of the
Internal Revenue Code. Except as otherwise stated herein, this amended and restated Plan shall
become effective January ],2002.
Section 3.
Definitions:
For the purposes of this Plan when used and capitalized herein the following words and phrases
shal] have the meanings set forth below.
3.1 "Account" means the Participant account maintained for the purpose of recording
deferred compensation, exchanges, withdrawals, and other account activity as well as any
investment gains or losses allocated thereto.
3.2 "Administrator" means the organization selected by the Emp]oyer to administer the Plan.
3.3 "Beneficiary" means the person or persons, a Participant designates to receive his interest
under the Plan after the Participant's death. The designation may be made, revoked
and/or changed only by a written instrument signed by the Participant and filed with the
Administrator prior to the Participant's death. If the Participant fails to designate a
Beneficiary or if no designated Beneficiary survives the Participant, his Beneficiary shall
be his spouse ifhe is married, or, if not, his estate.
Page 1 of 14
2002-178
3.4 "Code" or "IRC" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended.
3.5 "Compensation" means all payments made by the Employer as remuneration for services
rendered, including salaries, fees, etc.
3.6 "Deferred Compensation" means the amount of Compensation that a Participant elects to
defer into the Plan under the Participation Agreement.
3.7 "Disability" means the inability of a Participant to engage in his usual occupation by
reason of a medically determinable physical or mental impairment as determined by the
Employer on the basis of advice from a physician or physicians.
3.8 "Eligible Rollover Account" means the separate Account maintained by the
Administrator within the Plan for a Participant for amounts of Eligible Rollover
Distributions.
3.9 "Eligible Rollover Distribution" means an eligible rollover distribution as defined in IRC
Section 402( c)( 4), including Eligible Rollover Distributions to a surviving spouse under
IRC Section 402( c )(9).
3.10 "Eligible Retirement Plan" means an Eligible Retirement Plan as defined in IRC Section
402(c)(8)(B).
3.11 "Employee" means any officer, employee or elected official of the Employer, who has
been designated by the Employer as an Employee for participation in the Plan.
3.12 "Employer" means the City of San Bernardino, the City of San Bernardino Municipal
Water Department, and the City of San Bernardino Community Development
Commission.
3.13 "Employer Contribution" means the contribution made by the Employer to the Plan.
3.14 "Employment Period" means a period from January 1 through December 31 of the same
year, except that the first Employment Period of an Employee hired on any date other
than January 1 shall be the period beginning with the date of employment and ending on
December 31 of the same year.
3.15 "Includible Compensation" means, for the purposes of the limitations on deferrals,
Compensation for services performed for the Employer which is currently includible in
gross income after giving effect to all provisions of the IRC. The amount of Includible
Compensation shall be determined without regard to any community property laws.
Page 2 of 14
2002-178
3.16 "Independent Contractor" means any person receiving any type of compensation from the
Plan Sponsor or any of its agencies, departments, subdivisions or instrumentalities for
which services are rendered pursuant to one or more written or oral contracts, if such
person is not an Employee.
3.17 "Investment and Trust/Custodial Fund" means a fund established by the Employer as a
convenient method of setting aside a portion of its assets to meet its obligations under the
Plan.
3.18 "Normal Retirement Age" means the age specified in writing by the Participant. If the
Employer has a Employer's Retirement System, the Normal Retirement Age specified by
the Participant must be an age at which the Participant is eligible to retire pursuant to the
Employer's basic pension plan, by virtue of age, length of service, or both, without the
consent of the Employer and with the right to receive immediate retirement benefits
without actuarial or similar reduction because of retirement before some later specified
age. If the Employer has no Employer's basic pension plan, the Normal Retirement Age
specified by the Participant must be at least age 50. In no event shall Normal Retirement
Age be later than age 70 \1,.
3.19 "Participant" means any Employee or Independent Contractor who is or has been eligible
to defer Compensation to, and retains rights to benefits under, this Plan and who
participates in this Plan by signing a Participation Agreement.
3.20 "Participation Agreement" means the agreement executed and filed by an Employee with
the Administrator under which the Employee elects to become a Participant in the Plan.
3.21 "Plan" means the Employer's Deferred Compensation Plan as set forth in this document
and as it may be amended from time to time.
3.22 "Plan Year" means the calendar year in which the Plan becomes effective, and each
succeeding calendar year during the existence of this Plan.
3.23 "Severance From Employment" means the severance of a Participant's employment with
the Employer, as defined by IRC 457(d)(1)(A), or on account of the Participant's death or
retirement. An Independent Contractor shall not be considered Severed From
Employment from the Employer and shall not receive any benefits under the Plan unless
(i) at least 12 months have expired since the date on which the last contract, pursuant to
which the Independent Contractor provided any services to the Employer, was
terminated, and (ii) the Independent Contractor has performed no services for the
employer during the 12 month period referred to herein either as an Independent
Contractor or Employee.
3.24 "Trustee/Custodian" means a bank, trust company, financial institution, or other legally
authorized entity appointed by the Employer to have custody of Plan assets in the
Investment and Trust/Custodial Fund.
Page 3 of 14
2002-178
3.25 "Unforeseeable Emergency" means severe financial hardship to the Participant resulting
from a sudden and unexpected illness or accident of the Participant or a Participant's
dependent (as defined in IRC Section 152(a)), loss of the Participant's property due to
casualty, or other similar extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Participant.
Section 4.
Particioation in the Plan:
4.1 Particioation. Each Employee may elect to become a Participant in the Plan and defer
payment of Compensation not yet eamed by executing a Participation Agreement and
filing it with the Administrator at any time during active employment with the Employer.
Compensation shall be deferred for any calendar month only if a Participation Agreement
providing for such deferral has been entered into and is effective before the beginning of
such month.
4.2 Designation of Beneficiarv. The Participant shall have the right to file a Beneficiary
election with the Employer designating the person or persons who shall receive the
benefits payable under the Plan in the event of the Participant's death. The form for this
purpose shall be provided by the Administrator and will have no effect until it is signed
by the Participant and accepted by the Administrator prior to the Participant's death. If
the Participant dies without electing a Beneficiary under the Plan, benefits will be paid to
the Participant's estate. The Participant maintains the sole responsibility for filing a
proper beneficiary election with the Administrator.
4.3 Modification of Deferral. A Participation Agreement shall remain in effect until it is
terminated or modified. A Participant may modify an existing Participation Agreement
to effect subsequent deferrals in accordance with rules established by the Employer.
Such modification must be filed by the Participant with the Employer prior to the
beginning of the month for which the modification is to be effective.
4.4 Termination of Deferral. A Participant may terminate further deferrals of Compensation
under the Plan by filing with the Administrator an executed notice of termination of his
Participation Agreement. Any revocations or terminations of deferrals shall be effective
prospectively only. Participant Account balances shall not be payable to an Employee
upon terminating deferrals under the Plan unless such Account balances would be
otherwise payable to the Participant under the Plan.
4.5 Selection of Investment Ootions bv the Particioant. The Participant shall select one or
more investment options in the Investment and Trust/Custodial Fund into which the
Participant's Deferred Compensation shall be allocated; provided that any amounts so
allocated equal or exceed a minimum of $10.00 per pay period. The Employer shall
invest, or cause to be invested, the Participant's deferrals in accordance with such
selection.
Page 4 of 14
2002-178
4.6 Selection of Investment Options bv the Beneficiarv. After the death of the Participant,
his Beneficiary shall have the right to amend the Participant's, or the Beneficiary's own,
investment specification in the procedural manner approved by the Employer.
Section 5.
Amount of Deferrals: Deferral of Compensation:
5.1 Deferral of Compensation. During each Employment Period in which a Participant
participates in the Plan, the Employer shall defer payment of such part of the Participant's
Compensation as the Participant has specified in the Participation Agreement.
5.2 Emplover Contribution. The Employer may contribute to the Plan for Participants.
Employer contributions shall vest at the time the contributions are made and shall apply
towards the maximum annual deferral limits of the Plan.
5.3 Limitation. The amount of Compensation which may be deferred by a Participant and the
amount of Employer contributions, if any, made to a Participant's Account are subject to
the following limitations:
a. Annual Limitation. Except as provided in Paragraph (b) below, the maximum
amount that a Participant may defer during an Employment Period, when added to the
amount of any Employer Contribution for such Participant during the Employment
Period, shall not exceed the lesser of (i) the maximum dollar amount under IRC
Section 457(b )(2)(A) as adjusted for cost of living adjustments described in IRC
Section 457(e)(15) or (ii) 100% of the Participant's Includible Compensation as
provided in IRC Section 457(b )(2)(B).
b. "+50 Catch-Up" Deferrals. The maximum deferral amount described in Paragraph (a)
above and contributed under the Plan is increased for a Participant who has attained
age 50 (or older) by the end of each Employment Period. The additional amount
permitted to be contributed under this Paragraph is the lesser of (i) the applicable
dollar amount set forth in IRC Section 414(v)(2)(B) or (ii) the Participant's
Compensation for the taxable year reduced by any other elective deferrals of the
Participant for the taxable year. This Paragraph shall NOT be applicable for any
taxable year in which Paragraph (c) below applies.
c. "Traditional Catch-Up" Deferrals. For one or more of a Participant's last three
Employment Periods ending before the Participant attains Normal Retirement Age,
the maximum amount a Participant may defer shall be the lesser of (i) twice the
maximum deferral amount in effect under IRC Section 457(b)(2)(A) or (ii) the
limitation established for the taxable year under Paragraph (a) above, plus the
limitation established for purposes of Paragraph (a) for each of the prior taxable years
beginning after December 31, 1978, during which the Participant was eligible to
participate less the amount of Compensation deferred by or on behalf of the
Participant under the Plan for each of such prior taxable years.
Page 5 of 14
2002-178
5.4 USERRA. Notwithstanding the preceding provisions of this Section, a Participant who is
entitled to reemployment pursuant to the terms of the Uniformed Services Employment
and Reemployment Rights Act of 1994 (USERRA) may defer an additional amount
under the Plan as provided for in that Act for the years of his or her service in the
uniformed services (as defined by USERRA). Any such deferral will not be subject to
the limits set forth above in the year in which deferred, but will be subject to the limits for
the Employment Period to which such deferrals relate.
Section 6.
Investment and Trust/Custodial Fund Provisions:
6.1 Investment and Trust/Custodial Fund. The Employer shall establish an Investment and
Trust/Custodial Fund for the purpose of holding Plan assets for the exclusive benefit of
the Plan's Participants or Beneficiaries.
6.2 Trust/Custodial Provisions:
a. Trustees/Custodian. The Trustees/Custodian shall be, at any time the individual or
individuals duly appointed and authorized by the Employer. Resignation, removal
and appointment of such Trustees/Custodian, as well as compensation and expense
reimbursement of the Trustee/Custodian shall also be in accordance with appropriate
legal guidelines for resignation, removal, appointment, compensation and expenses of
City of San Bernardino.
b. Adoption of Investment Options. The Trustee/Custodian or the Employer shall work
with the Plan Administrator to adopt various investment options for the investment of
Plan assets. Additionally, the Trustee/Custodian or the Employer shall monitor and
evaluate the appropriateness of those offerings by the Plan. The Trustees/Custodian
or the Employer may de-select options that are determined to be no longer appropriate
for offering. In the event options are de-selected, the Trustees/Custodian or Employer
may move, or require Participants to move, account balances to an alternative
investment option offered by the Plan. By exercising such right to select investment
options or by failing to respond to notice to transfer from a de-selected option,
Participants and their Beneficiaries agree that no Plan fiduciaries will be liable for any
investment losses or lost investment opportunity under the Plan.
c. Designation of Fiduciaries. The Employer, Trustees/Custodians, Plan Administrator,
and their designees are fiduciaries under the Plan. Each fiduciary has only those
duties or responsibilities specifically assigned to him under the Plan or delegated to
him in writing by another fiduciary. Each fiduciary may assume that any direction,
information, or action of another fiduciary is proper and need not inquire into the
propriety of any such action, direction or information. Except as provided by law, no
fiduciary will be responsible for the malfeasance, misfeasance or nonfeasance of any
other fiduciary.
Page 6 of 14
2002-178
d. Fiduciary Standards.
1. The Trustees/Custodian and all other fiduciaries shall discharge their duties with
respect to this Plan solely in the interest of the Participants and Beneficiaries of
the Plan. Such duties shall be discharged for the exclusive purpose of providing
benefits to the Participants and Beneficiaries and defraying expenses of the Plan.
2. All fiduciaries shall discharge their duties with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person acting in
like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, and as defined by applicable
State law.
e. Trustees/Custodian's Powers and Duties. The Trustees/Custodian's powers and
duties shall be those defined under applicable State law.
f. Exemot Status. This Plan and Investment and Trust/Custodial Fund is intended to be
exempt from taxation under Section 501(a) of the IRC and is intended to comply with
Section 457(g) of the Code. The Trustees/Custodian shall be empowered to submit or
designate appropriate agents to submit this Plan and Investment and Trust/Custodial
Fund to the Internal Revenue Service for a determination of the eligibility of the Plan
under Section 457, and the exempt status of the Investment and Trust/Custodial Fund
under Section 501(a).
6.3 Investment Ootions. Each Participant may allocate the balances of his Account under the
Plan among the investment options provided under the Plan. A Participant may change
his investment options in accordance with rules established by the Employer and/or the
investment providers. Such modification may effect transfers of Compensation already
deferred and any Employer Contributions that may have already been made from one
investment option to another and/or may prospectively change the investments to which
future deferrals of Compensation and Employer Contributions, if any, shall be allocated,
effective as soon as practicable after the Participant makes the change.
6.4 Account. The Employer shall maintain an Account for each Participant to hold any
Deferred Compensation or Employer Contributions, as well as any gains or losses of such
funds. Each Participant's Account shall be revalued at least quarterly to reflect the
earnings, gains and losses creditable thereto or debitable therefrom in accordance with the
performance of the investment options selected by the Participant. The earnings, gains
and losses creditable to or debitable from an Account shall mean the actual earnings,
gains and losses of each investment option, on a pro-rata basis among the Accounts of
those Participants who selected that investment option.
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2002-178
Section 7.
Plan Administration:
7.1 Administration. The Plan shall be maintained by the Employer, which may implement
rules and regulations for the administration of the Plan consistent with terms of the plan.
All rules and regulations recommended by the Employer shall be final and conclusive
upon adoption by resolution of the Mayor and Common Council of the City of San
Bemardino.
7.2 Powers. The Employer, or its designee, shall have all powers to perform all duties
necessary to exercise its functions including, but not limited to, the:
a. Determination of Employees' eligibility, participation, and benefits under the Plan;
b. Establishment and maintenance of written records showing at any time the interest of
a Participant in his Account;
c. Interpretation and construction of the provisions of the Plan;
d. Direction to make disbursement of benefits under the Plan;
e. Appointment of, and delegation to, such agents, advisors, counselors and delegates
including an Administrator as may be necessary and appropriate for the
administration and operation of this Plan.
7.3 Revocability of Administrative Action. Any action taken by the Employer with respect
to the rights or benefits under the Plan of any person shall be revocable by the Employer
as to payments or distributions not theretofore made pursuant to such actions and
appropriate adjustments may be made in future payments or distributions to a Participant
or Beneficiary to offset any excess payment or underpayment theretofore made to such
Participant or Beneficiary.
Section 8.
Distribution of Benefits:
8. I General Provisions. Except for Unforeseeable Emergency withdrawals under Section 8.5,
and Voluntary In-Service Distribution withdrawals under Section 8.7 or otherwise
specifically allowed by the Plan, distributions from the Plan may not be made to a
Participant earlier than (i) the calendar year in which the Participant attains age 70 \1,; or
(ii) the calendar year in which there is a Severance From Employment by the Participant.
All irrevocable elections of a Benefit Commencement Date by Participants or
Beneficiaries made prior to January I, 2002 and defaulted distributions (other than a
defaulted distribution to an annuity option) may be voided at the election of the
Participant or Beneficiary.
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8.2 Mode of Pavment. Benefits shall be paid in accordance with the payment option elected
by a Participant. Payment amount, method of payment, and settlement options are
available as provided by each of the available investment options. The Participant shall
elect the mode of payment based upon the options then available. A Participant who has
chosen a payment option, other than a purchased annuity payment option, shall have the
ability to change his payment option, an administrative charge or restrictions may be
applicable as determined by the Employer and Administrator.
8.3 Provisions Reauired Pursuant to Code Section 40Ha)(9). Distribution of a Participant's
entire Account shall commence not later than April I following the calendar year in
which he attains age 701/2 or separates from service, which ever is later. Unless the form
of distribution is a single lump sum payment, distributions shall be made over a period
not exceeding the life expectancy of the Participant, or the joint life expectancy of the
Participant and his Beneficiary.
8.4 Pavments to a Beneficiarv. If the Participant dies before the benefits to which he is
entitled under this Plan have been paid or exhausted, then the remaining benefits payable
under the Plan shall be paid to his designated Beneficiary. The Beneficiary shall have the
right to elect the time and mode of payment of such benefits, subject to the limitations set
forth in this Plan. Such election as to the time of payment (distribution commencement
date) shall be filed by the Beneficiary not later than ninety (90) days following the
Participant's death. Failure to file an election as to the form of payment may result in the
Administrator making a lump sum payment to the Beneficiary.
a. Death After Benefit Commencement. If the Participant dies after having begun to
receive payments, the remainder of such scheduled payments shall be suspended for a
period of sixty days after the Participant's death. During such suspension period, the
Beneficiary may elect to receive the balance of the Participant's Account in a single
lump sum or in another method of distribution, provided that any elected method will
distribute the remaining balance at least as rapidly as under the method of distribution
used prior to the Participant's death. If no such election is made by the Beneficiary
by the end of the sixty-day suspension period, the remaining Account balance shall be
paid to the Beneficiary by the same payment method originally selected by the
Participant.
b. Death Prior to Benefit Commencement. If the Participant dies before payments have
begun, payments to a Beneficiary must comply with one of the following
requirements:
I. If the Participant has no Beneficiary, or the Beneficiary is not a person, such as an
estate or a trust, the entire account value will be distributed within five (5) years
of the Participant's death; or
Page 9 of 14
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2. If the Beneficiary is not the Participant's spouse, then distribution of the Account
must begin on or before December 31 of the calendar year following the
Participant's death, and the entire account must be paid over a period not
extending beyond the life expectancy of the Beneficiary; or
3. If the Beneficiary is the Participant's surviving spouse, distribution of the Account
may be delayed until December 31 of the calendar year in which the Participant
would have attained age 70 Y:z at which time the entire account must then be paid
over a period not extending beyond the life expectancy ofthe spousal Beneficiary.
c. Interpretation: This section has been drafted in accordance with Treasury Regulations
issued under Section 40 1 (a)(9) of the Code. To the extent there is a conflict between
this Section and the IRC, the provisions of the IRC and applicable Treasury
Regulations shall prevail.
8.5 Unforeseeable Emerl!encv Withdrawals. Notwithstanding any other provisions of this
Plan, in the event of an Unforeseeable Emergency a Participant may request that benefits
be paid to him at any time. Such request shall be subject to any limitations specified by
the investment carrier. Benefits to be paid shall be limited strictly to the amount
necessary to meet the Unforeseeable Emergency constituting financial hardship to the
extent such Unforeseeable Emergency may be relieved:
a. through reimbursement or compensation by insurance or otherwise,
b. by liquidation of the Participant's assets (to the extent such liquidation would not
itself cause severe financial hardship), or
c. by cessation or temporary suspension of deferrals under the Plan.
Note: Foreseeable personal expenditures normally budgetable, such as a down payment
on a home, the purchase of an automobile, college or other educational expenses, etc.,
will not constitute an Unforeseeable Emergency. The decision of the Employer or its
designee concerning the payments of benefits under this Section shall be final.
8.6 Effect of ReemDlovment. If a Participant who has a Severance From Employment again
becomes an Employee, no distributions shall be made or continued to the Participant
while he is so employed. Any amounts which the Participant was entitled to receive on
his prior Severance from Employment shall be held until the Participant is again entitled
to a distribution under the terms of the Plan.
8.7 Voluntary In-Service Distributions. A Participant who is an active Employee of an
eligible Employer shall receive a distribution of the total amount payable to the
Participant under the Plan if the following requirements are met:
Page 10 of 14
2002-178
a. the total amount payable to a Participant under the Plan does not exceed $5,000 (or
the dollar limit underIRC Section 411 (a)(II), if greater); and
b. the Participant has not previously received an in-service distribution of the total
amount payable to the Participant under the PLAN; and
c. no amount has been deferred under the Plan with respect to the Participant during the
two-year period ending on the date of the in-service distribution; and
d. the Participant elects to receive the distribution.
Section 9:
Plan Transfers and Eligible Distribution Rollovers.
9.1 Outgoing Section 457 Plan to Plan transfers through Severance of Emplovment. If a
Participant terminates employment with the Plan Sponsor and accepts employment with
another employer which maintains an eligible deferred compensation plan (as defined in
IRC Section 457) and the new employer's plan accepts transfers, the Participant may
transfer his account balance from the Plan to the plan maintained by the new employer.
9.2 Outgoing Section 457 Plan to Plan transfers while Emploved. If the Employer offers an
eligible deferred compensation plan (as defined in IRC Section 457) other than the Plan,
and such other plan accepts transfers, the Participant may transfer the account balance
from the Plan to the other plan.
9.3 Incoming Section 457 Plan to Plan Transfers. Transfers from other eligible deferred
compensation plans (as defined in IRC Section 457) to the Plan will be accepted at the
Participant's request if such transfers are in cash or non-annuity products currently offered
under the Plan. Any such transferred amount shall not be subject to the contribution
limitations of Section 5.3, provided however, that the actual amount deferred during the
Employment Period under both Plans shall be taken into account in calculating the
deferral limitation for that year. For purposes of determining the limitation set forth in
Section 5.3, years of eligibility to participate in the prior plan and deferrals under that
plan shall be taken into account.
9.4 Incoming Eligible Rollover Distributions. The Plan may receive an Eligible Rollover
Distribution on behalf of a Participant from an Eligible Retirement Plan provided (a) the
Eligible Rollover Distribution is made entirely in the form of U.S. dollars, and (b) the
Participant demonstrates to the Administrator's satisfaction that the amount is a
qualifying eligible rollover distribution under IRC Sections 402(c)(4), 403(a)(4) or
408( d)(3).
Page 11 of14
2002-178
9.5 Outgoing Eligible Rollover Distributions. Subject to Section 8.1, a Participant may elect
at the time and in the manner prescribed by the Administrator, to have any portion of an
Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by
the Participant, provided the Participant presents to the satisfaction of the Administrator a
letter of acceptance or other written acknowledgment from the accepting plan that it is an
Eligible Retirement Plan qualified to accept the Eligible Rollover Distributions.
9.6 Purchase of Service Credits. At any time, a Participant may use all or a portion of an
account balance as a direct trustee-to-trustee transfer to a Retirement System to purchase
permissive service credit or for the repayment of service credits, provided that (a) the
Retirement System permits such a transfer, and (b) the Participant demonstrates to the
Administrator's satisfaction that the transfer is to a defined benefit governmental plan (as
defined in IRC Section 4I4(d)) and the transfer is permissible for the purchase of service
credit (as defined in Code Section 4I5(n)(3)(A)) or for the repayment of service credits
permissible by IRC Section 4l5(k)(3).
Section 10. Oualified Domestic Relations Orders.
10.1 Receipt of Orders. When the Employer, Administrator, Plan or Investment and
Trust/Custodial Fund receives a judgment, decree or order entered or enforceable
pursuant to local domestic relations or marital property law ("Qualified Domestic
Relations Order" or "QDRO"), and relating to the property rights of a Participant's
present or former spouse ("Alternate Payee"), then:
a. The Administrator shall promptly notify the Participant and Alternate Payee of the
receipt of the QDRO, and
b. Within a reasonable time, the Administrator will follow the procedures adopted by the
Employer to determine the validity of the QDRO. In the event the Administrator
believes that the QDRO is acceptable, it will forward the QDRO to the Employer for
approval. If the QDRO does not appear to be acceptable, the Administrator will
forward the QDRO to the Employer for a final determination and instruction to reject.
10.2 Validity ofa ODRO. A valid QDRO is ajudgment, decree, order, or approval ofa marital
property settlement made pursuant to state domestic relations law (including community
property law), relating to the property rights of a Participant and Alternate Payee. In
addition, the QDRO must:
a. Create or recognize the existence of the right of an Alternate Payee to all or a portion
of the benefits payable with respect to a Participant under the Plan;
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2002-178
b. Clearly specify the following information:
1. The name and last known mailing address of the Participant and Alternate Payee
covered by the QDRO; and
2. The amount or percentage, or the manner in which the amount or percentage is to
be determined, of the Participant's benefits to be paid to the Alternate Payee; and
3. The number of payments or period to which the QDRO applies; and
4. The plan to which such QDRO applies.
c. Provide a form of payment to the Altemate Payee that is permitted under the Plan;
and
d. Not require the payment of benefits to an Alternate Payee which are required by a
prior QDRO to be paid to another Altemate Payee.
10.3 Processing of a ODRO. If it has been determined that a QDRO applies to a Participant's
account, upon specific instruction from the Employer, the Administrator shall comply
with the QDRO. The Administrator may place a restrictive hold on a Participant's
account while it determines the validity of and/or processes a QDRO. The Administrator
shall establish a separate Account for the Altemate Payee and transfer the assigned value
or benefit from the Participant's Account into the Alternate Payee's Account.
lOA Rights of an Alternate Payee. The Alternate Payee is entitled to receive distributions
immediately upon the establishment of his account under Section 10.3, and
commencement of distributions must begin no later than April 1" following the year in
which the Alternate Payee attains age 70 \'2, in accordance with the terms of Section 8.3.
Distributions made to an Alternate Payee are reported as taxable income to the Alternate
Payee. State taxes, if applicable, and Federal taxes will be withheld from any distribution
on the Alternate Payee's account based upon the tax withholding elections of the
Alternate Payee. The Alternate Payee may not make any contributions to his Account but
is permitted to designate beneficiaries for the Account and to exercise exchanges among
the investment options as permitted by the Plan.
10.5 No Liabilitv for Previouslv Distributed Amounts. If it is determined that a QDRO is
valid and the Participant has begun receiving distributions from the Plan, the Alternate
Payee must commence distributions within sixty (60) days following the date the QDRO
is determined to be valid. The Administrator shall only process a QDRO to the extent
possible based upon the then current value or benefit in the Participant's Account.
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2002-178
Section II. Nonassignabilitv:
The interest of a Participant established under the Plan, shall not be assignable in whole
or in part, directly or by operation of law or otherwise, in any manner unless specifically
allowed through this document.
Section 12.
Miscellaneous:
12.1 No Effect on Emolovment. Neither the establishment of the Plan nor any modification
thereof, nor the establishment of an Account, nor any agreement between the Employer,
Administrator and the Trustee/Custodian, nor the payment of any benefits, shall be
construed as giving to any Participant or other person any legal or equitable right against
the Employer except as herein provided, and in no event shall the terms of employment of
the Employee, Independent Contractor, or Participant be modified or in any way affected.
12.2 Construction. This Plan shall be construed, administered and enforced according to the
Constitution, laws of the State of Cali fomi a, and the IRC.
Section 13. Amendment and Termination:
13.1 Amendment and Termination. The Employer may at any time modify, amend, suspend,
or terminate the Plan in whole or in part (including retroactive amendments) or cease
deferring Compensation pursuant to the Plan for some or all Participants. In the event of
such an action, the Employer shall deliver to each affected Participant a notice of such
modification, amendment or termination or a notice that it shall cease deferring
Compensation; provided, however, that the Employer shall not have the right to reduce or
affect the value of any Participant's Account or any rights accrued under the Plan prior to
such modification, amendment, termination or cessation.
13.2 Interoretation. This Plan is intended to be an eligible deferred compensation plan under
Section 457 of the Code, and shall be interpreted and administered in a manner consistent
with the IRC. The Employer reserves the right to amend the Plan to the extent that it may
be necessary to conform the Plan to the requirements of Section 457 of the Code and any
other applicable law, regulation or ruling, including amendments that are retroactive to
the effective date of the Plan. In the event that the Plan is deemed by the Intemal
Revenue Service to be administered in a manner inconsistent with the Code, the
Employer shall correct such administration.
Section 14. Gender and Plurals.
Whenever used herein, the masculine gender shall include the feminine and the singular
shall include the plural unless the provisions of the Plan specifically require a different
construction.
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