HomeMy WebLinkAbout1991-493
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RESOLUTION NO.
91-493
RESOLUTION OF THE CITY OF SAN BERNARDINO ADOPTING A
DEFERRED COMPENSATION PLAN FOR PARTTIME, SEASONAL AND
TEMPORARY EMPLOYEES EFFECTIVE JANUARY 1, 1992.
WHEREAS effective January 1, 1992, the Omnibus BUdget
Reconciliation Act of 1990 subjects service performed by
state and local government employees who are not members of
a retirement system to Social Security Taxes; WHEREAS the
Treasury Department has issued Proposed regulations which
permit participation in a Deferred Compensation Program (Sec.
457) as an alternative to Social Security Taxes; WHEREAS to
qualify, Deferred Compensation Plans are required to allocate
at least 7.5 percent (7.5%) of a worker's annual compensation
into the employee's account.
WHEREAS Deferred Compensation Plan has been designed to
meet the requirements of an alternative plan to Social
Security Taxes for employees who are not members of the
Public Employees Retirement System (P.E.R.S.).
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO AS FOLLOWS:
SECTION 1.
ARTICLE I - NAME
The name of this Plan is the City of San Bernardino PST
16 Deferred
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Compensation
Plan
(hereinafter
referred
to
as
the
"Plan").
SECTIONS 2.
ARTICLE II - DEFINITIONS
For the purpose of this Plan, certain words or phrases used
herein will have the following meanings:
A.
"Beneficiary" means a Beneficiary of the Participant,
22 hiS/her estate, or any other person whose interest in the plan is
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derived from the Participant. Any designation of a Beneficiary
shall be by written instrument filed with the City and shall be
revocable unless otherwise provided in the Beneficiary designation
instrument.
If a Participant does not file a Beneficiary
1 designation with the City, his/her Beneficiary shall be the estate
2 of such Participant.
S B. "Compensation" shall mean wages payable to officers and
4 employees of the city.
5 c. "Deferred Compensation" shall mean the amount of
6 compensation not yet earned, which the Participant and the City
7 mutually agree shall be deferred in accordance with the provisions
8 of the Plan.
9 D. "Termination of Service" shall mean the severance of the
10 Participant's employment or contract with the City prior to
11 retirement.
12 E. "City" shall mean the city of San Bernardino, provided
13 that the Plan Administrator or the designee for that purpose,
14 shall exercise on behalf of the city any discretion or other
15 function given to the city under the Plan.
16 F. "Plan Administrator" shall mean a Committee composed of
17 the City Administrator, Personnel Director and Finance Director,
18 or their designees.
19 G. "Participant" means a Parttime, Seasonal or Temporary
20 Employee who is eligible to defer compensation under the Plan.
21 H. "Includible Compensation" means compensation for service
22 performed for the city which (taking into account the provisions
23 of Internal Revenue Code section 403 (b) and 457) is currently
24 includible in gross income.
25 I. "Plan Year" shall mean the period commencing January 1
26 and ending December 31.
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1 J. "Normal Retirement Age" shall mean, as to each
2 Participant, the age designated by the Participant within the
3 range of ages ending with 70 1/2, and beginning not earlier than
4 the earliest age at which an employee would have the right to
5 retire under the Public Employees Retirement System. For a
6 Participant who continues in the service of the City after age 70
7 1/2, Normal Retirement Age shall be the age at which the
8 Participant separates from service with the City.
9 SECTION 3. ARTICLE III - ADMINISTRATION
10 The Plan Administrator shall have full authority to adopt
11 rules and regulations for the administration of the Plan and to
12 interpret, alter, amend, or revoke any rules and regulations so
13 adopted. All forms shall be approved by the Plan Administrator.
14 SECTION 4. ARTICLE IV - ELIGIBILITY
15 All employees in fUll-time, part-time, temporary, contract,
16 and seasonal positions or elected officials of the City who are
17 not members of the Public Employees Retirement System shall be
18 participants in this Plan.
19 SECTION 5. ARTICLE V - ENROLLMENT
20 Each eligible officer or employee shall file a written
21 enrollment election with the City on or before the first day on
22 which the participant becomes an employee or participant under the
23 provisions of Article IV.
24 The election shall continue thereafter in full force and
25 effect unless the Participant ceases to qualify as an officer or
26 employee to be a Participant in the Plan as provided in Article IV
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1 or VIII.
2 The election shall specify the percentage of biweekly
3 earnings to be contributed to the Plan by the Participant.
4 Maximum contributions will be based on the maximum salary cap
5 which the federal government establishes for Social Security
6 contributions, providing such deferred amount does not exceed the
7 lesser of $7,500 or 33 1/3% of Participant's includible
8 compensation, as defined by applicable federal laws and
9 regulations, in any taxable year.
10 SECTION 6. ARTICLE VI - CHANGE IN ENROLLMENT
11 Changes in the amount of deferment will automatically occur
12 when a change in compensation occurs, based on the percentage of
13 biweekly earnings.
14 SECTION 7. ARTICLE VII - REVOCATION
15 An enrollment election shall remain effective and no
16 revocation is permitted for as long as Participant meets the
17 eligibility criteria as provided in Article IV and Article XIII.
18 SECTION 8. ARTICLE VIII - TERMINATION OF EMPLOYMENT
19 Upon termination of a Participant's employment with the City,
20 any agreements to defer compensation will be deemed to have been
21 revoked.
22 SECTION 9. ARTICLE IX - PARTICIPANT ACCOUNT
23 The city shall maintain or have maintained, an account ("The
24 Participant Account") for each Participant, to which shall be
25 credited an amount equal to the deferred income of the
26 Participant, less any charges for administrative costs. Each
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1 Participant Account shall further be credited monthly with
2 earnings, gains, or losses applicable thereto, for the preceding
3 quarter.
4 The City will furnish to each Participant statements of his
5 or her account at such times as determined by the Plan
6 Administrator. The account statements will disclose:
7 A. The accumulated amounts of compensation which have been
8 deferred and invested.
9 B. Any amounts credited to the Participant's Account by way
10 of interest, dividends or other proceeds flowing from his/her
11 accumulation.
12 c. The balance of such Participant's Account.
13 SECTION 10. ARTICLE X - DISTRIBUTION OF BENEFITS
14 Distribution of benefits to each Participant shall commence
15 not later than sixty (60) days after the end of the calendar year
16 following a distribution event, or 180 days after Participant's
17 termination of service, whichever is earlier, providing the
18 Participant has submitted written notification to the City
19 requesting distribution irrevocably not less than thirty (30) days
20 prior to the date on which the distribution is to be made or is to
21 commence. A Participant who fails to elect a mode of distribution
22 by such date will be deemed to have elected immediate lump sum
23 distribution of all amounts deferred. In the event a distribution
24 event occurs prior to the date the Participant attains Normal
25 Retirement Age, the Participant may irrevocably elect, prior to
26 the time any amounts become payable, to defer payment of some or
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1 all of such amounts until such time as the Participant attains
2 Normal Retirement Age.
3 A. In the event of retirement, the amount credited to the
4 Participant's account shall be distributed to him in anyone or
5 more of the methods as stated in Article XI.
6 B. In the event of the Participant's termination of service
7 with the City, all amounts credited to the Participant's account
8 shall be distributed to him in anyone or more of the methods as
9 stated in Article XI.
10 C. In the event of the death of the Participant, all
11 amounts in Participant's account shall be distributed to the named
12 beneficiary (ies) or estate over a period not greater than:
13 1. The life expectancy of the beneficiary, if the
14 beneficiary is the Participant's surviving spouse, or
15 2. Fifteen (15) years, if the beneficiary is not the
16 Participant's surviving spouse.
17 SECTION 11. ARTICLE XI - MODE OF DISTRIBUTION
18 All funds in a Participant's Account shall be distributed by
19 anyone of the following methods:
20 Participant accounts of less than $3,500:
21 A. In a lump sum.
22 Participant accounts of $3,500 or more:
23 A. In a lump sum.
24 B. In consecutive periodic payments monthly, quarterly,
25 semiannual or annual installments over the life expectancy of the
26 Participant, or Participant and his or her spouse. Life
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expectancy shall be actuarially determined by the Plan
Administrator based on the date the initial distribution shall
begin.
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11 B = MINIMUM DISTRIBUTION
Y - X
12 For purposes of the preceding formula, "B" is equal to the
13 value of the Account on December 31 of the preceding calendar
14 year; "Y" is equal to the life expectancy of the Participant (or
life expectancy of the Participant and his Beneficiary)
his or her birthday (or their birthdays) in the 70 1/2
C. Notwithstanding the provisions of Article X or other
provisions of Article XI, Beginning with the Calendar year in
which the Participant attains age 70 1/2 (the 70 1/2 calendar
year) and for each calendar year thereafter, distribution during
such calendar year from the participant's account shall be an
amount not less than that determined pursuant to the following
formula:
15 the joint
16 based on
17 calendar
year; and "X" is the number of calendar years that have
18 ended since the Participant attained age 70 1/2 (including the 70
1/2 calendar year).
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20 For purposes of this section C, the following rules shall
21 apply when determining the minimum distribution.
22 1. The minimum distribution to be made with respect to
23 the 70 1/2 calendar year may be delayed until no later than April
24 1 of the following calendar year;
25 2. If, pursuant to clause 1, all or part of a minimum
26 distribution is delayed until after December 31 of the 70 1/2 year
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1 calendar year, the value of "B" for the calendar year following
2 the 70 1/2 calendar year shall be reduced by the amount of such
3 delayed distribution;
4 3. The life expectancy of a Beneficiary may be used
5 only if the interest of such person is payable on account of the
6 death of the Participant (i.e., such person is a primary
7 beneficiary);
8 4. If there is more than one primary beneficiary, the
9 life expectancy of the oldest primary beneficiary shall be used;
10 5. a. Except as provided in (B) primary
11 beneficiaries (and life expectancy) shall be determined as of the
12 required Beginning Date of the Participant.
13 b. with respect to the 70 1/2 calendar year, it
14 is permissible to use the life expectancy of any beneficiary
15 designated during such year or at any time prior to the
16 Participant's Required Beginning Date, and
17 c. If a primary beneficiary is added or changed
18 after the Required Beginning Date of the Participant, the life
19 expectancy of the new primary beneficiary shall be substituted for
20 all subsequent calendar years if the life expectancy of such new
21 beneficiary (determined as of the Required Beginning Date) .
22 6. If a primary beneficiary is a trust, the life
23 expectancy of the beneficiary is a trust, the life expectancy of
24 the beneficiaries of the trust shall be used, provided;
25 a. The trust is a valid trust under state law, or
26 would be if funded.
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1 b. The trust is irrevocable.
2 c. The trust beneficiaries who are beneficiaries
3 of the Account of the Participant shall be treated as not having
4 a primary beneficiary, even if there are natural persons also
5 named as primary beneficiaries.
6 Participants who are still employed by tae City at or after
7 age 70 1/2 may delay commencement of required distributions until
8 separation from service. To the extent any of the foregoing does
9 not comply with the requirements of Internal Revenue Code Section
10 401(a) (9) and the Treasury Department Regulations thereunder, the
11 Plan shall be administered in accordance with such provisions.
12 D. In the event that an account balance may be of a small
13 amount or for other good and sufficient reason, the City may
14 elect, in its sole discretion to disapprove the method selected by
15 the Participant and to choose another method of distribution
16 permitted by this article.
17 SECTION 12. ARTICLE XII - LEAVE OF ABSENCE
18 A. Approved leave of absence with pay shall not affect
19 agreements with Participants in this plan.
20 B. Approved leave of absence without pay shall be
21 considered to be temporary revocation of the Participant's
22 agreement to participate in this Plan. Participation in the Plan
23 will be automatically reinstated as of the first day of the next
24 period subsequent to the termination of the leave of absence
25 status.
26 SECTION 13.
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ARTICLE XIII - TERMINATION OR AMENDMENT
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1 A. The City may at any time terminate this plan. Upon such
2 termination, the Participants in the Plan will be deemed to have
3 withdrawn from the Plan as of the date of such termination and the
4 Participant's full compensation on a nondeferred basis will be
5 thereupon restored, and the city agrees to pay such Participants
6 the amount of money determined as if the Participant had
7 terminated his employment.
S B. The City may also amend the provisions of this Plan at
9 any time; provided, however, that no amendment shall affect the
10 rights of Participants or their Beneficiaries to the receipt of
11 payment of benefits, to the extent of any compensation deferred at
12 the time of the amendment as adjusted for investment experience
13 hereunder prior to and subsequent to the amendment.
14 SECTION 14. ARTICLE XIV - MISCELLANEOUS
15 A. The Plan shall not be construed as giving any
16 Participant any right to continue his employment with the City.
17 B. The Plan has been adopted in the State of California and
18 shall be construed and governed in all respects under and by the
19 laws of said State.
20 c. The captions used in the Plan are for the purpose of
21 convenience only and shall not limit, restrict or enlarge the
22 provisions of the Plan.
23 D. The Plan shall be binding upon and shall inure to the
24 benefit of the City, its successors and assigns, all Participants
25 and Beneficiaries and their heirs and legal representatives.
26 E. As used in the Plan, the masculine, feminine or neuter
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20 It is agreed that neither the Participant nor his Beneficiary
21 nor any other designee shall have any right to commute, sell,
22 assign, transfer or otherwise convey the right to receive any
23 payments hereunder which payments and right thereto are expressly
24 declared to be nonassignable and nontransferable; and, any such
25 assignment or transfer shall not be recognized by the City, and if
26 made by the Participant in writing shall be deemed to constitute
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1 gender, and the singular or plural number, shall each be deemed to
2 include the others unless the context clearly indicates otherwise.
3 F. Any notice or other communications required or permitted
4 under the Plan shall be in writing and, if directed to the City,
5 shall be sent to the Director of Finance at his principal office,
6 and, if directed to a Participant or to a Beneficiary at his/her
7 last known address as it appears on the City's records.
8 G. Deductions for employee contributions to retirement
9 systems shall be made without reference to amounts deferred
10 pursuant to this Plan, and shall be based upon the gross salary a
11 Participant would receive if he had not elected to defer income.
12 H. The City shall have the right to contract for
13 administration, accounting and investment services with regard to
14 operation of the Plan.
15 I. This Plan is intended to qualify as an eligible Deferred
16 Compensation Plan under Section 457 of the Internal Revenue Code,
and shall be interpreted and administered in a manner consistent
with Section 457.
SECTION 15.
ARTICLE XV - NONASSIGNABILITY
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an immediate revocation by the Participant. In the event that a
Participant commits or attempts to commit a prohibited act, the
city is relieved of all liability under the Plan. Except as
otherwise required by law notwithstanding this provision, any
compensation deferred or benefits paid pursuant to this Plan shall
not be subject to attachment, garnishment, or execution, or to
transfer by operation of law in the event of bankruptcy or
insolvency.
SECTION 16. ARTICLE XVI - COPIES OF THIS PLAN
A copy of this Plan shall be made available to each eligible
employee prior to his enrollment in the Plan.
SECTION 17. ARTICLE XVII - PLAN-TO-PLAN TRANSFERS
A. The City will accept funds from other eligible State
Deferred Compensation Plans established pursuant to section 457 of
the Internal Revenue Code to be transferred and added to the
Participant's account within the Plan provided that all of the
following conditions exist:
1. The funds so transferred were deferred by the
Participant from Compensation while employed by a political
20 subdivision located in the State of California and;
21 2. The funds so transferred are from a plan that
22 provides that if the Participant separates from service in order
23 to accept employment with another political subdivision located in
24 the State of California, payout will not commence upon separation
25 from service, regardless of any other provision of the plan, and
26 amounts previously deferred will automatically be transferred.
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3. Transfer amounts will be accepted on behalf of a
Participant only if the former plan provides assurance that such
plan is an eligible plan.
B. Amounts deferred by a former Participant shall be
transferred to another eligible plan of which the former
Participant has become a Participant provided that the other plan
is sponsored by an entity within the state of California and the
plan receiving such amounts provides for the acceptance of the
amounts.
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10 C. Regardless of any other provision of the Plan, if the
11 Participant separates from service with the City in order to
12 accept employment with another political subdivision located in
13 the state of California, payout will not commence upon separation
14 from service and amounts previously deferred will automatically be
15 transferred.
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18 I HEREBY CERTIFY that the foregoing resolution was duly
19 adopted by the Mayor and Common Council of the City of San
20 Bernardino at a regular meeting thereof, held on the
day of December , 1991, by the following vote, to
21 16th
22 wit:
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1 RESOLUTION TO ADOPT A DEFERRED COMPENSATION PLAN FOR PST EMPLOYEES
EFFECTIVE JANUARY 1, 1992.
13
The foregoing resolution is hereby approved this
14 day of December , 1991.
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2
3 Council Members:
4 ESTRADA
5 REILLY
6 HERNANDEZ
7 MAUDSLEY
8 MINOR
9 POPE-LUDLAM
10 MILLER
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Approved as to
18 form and legal content:
19
JAMES F. PENMAN,
City Attorney
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21 By: Uz~~ ? !c~<-
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AYES
ABSTAIN
ABSENT
NAYS
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~~~
city Clerk
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