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HomeMy WebLinkAbout12-Finance CITY OF SAN BERNARDINO - REQUEST FOR COUNCI' From: Barbara Pachon Subject: Resolution of the Mayor and Common Director of Finance Council amending and restating a Part time Seasonal and Temporary (PST) Dept: Finance Department Deferred Compensation Plan document (FICA-Substitute Plan or OBRA Plan). Date: May 27, 2008 M/CC Meeting Date: June 16,2008 Synopsis of Previous Council action: July 1,2002 Resolution 2002-178 Mayor and Common Council authorized submission of an amended City's deferred compensation plan in accordance with the Federal government's Economic Growth and Tax Relief Reconciliation Act of 2001. May 18, 1998 Resolution 98-214 Mayor and Common Council authorized an amendment to the City's deferred compensation plan to reflect changes in the United States Code Section 457. December 16, 1991 Resolution 91-493 Mayor and Common Council authorized agreement with Great Western Bank to perform services relating to the administration of the City's PST Deferred Compensation Plan. Recommended motion: Adopt Resolution. Signature Contact person: Jim Sharer Phone : e v 244 Supporting data attached: Ward: N/A FUNDING REQUIREMENTS: Amount: none Source: (Acct No.) (Acct Description) Finance: Council Notes: CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION STAFF REPORT Subiect• Resolution of the Mayor and Common Council amending and restating a Part-time, Seasonal and Temporary (PST) Deferred Compensation Plan document (FICA-Substitute plan or OBRA Plan). Background: The City of San Bernardino established a Part-time, Seasonal, and Temporary (PST) employee deferred compensation plan effective January 1, 1992. The Plan was established for these employees who are not members of the Public Employees Retirement System (PERS) to participate in a deferred compensation plan as an alternative to Social Security taxes. The City is required to have a retirement plan for PST employees since we are not a member of Social Security. The current PST employee plan document now needs to be amended and restated to reflect changes made in accordance with the 1997 changes in the United States Code Section 457, and the Federal government's Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). Many of these changes needed to be enacted by January 2008, so the new Plan document is effective as of that date. These changes include: 1. Funds held in a qualifying deferred compensation account will be maintained in a trust. The proposed plan revision establishes the City of San Bernardino Deferred Compensation Advisory Board as the Trust/Custodian of the plan. 2. Employees who separate are allowed to make one modification in their disbursement declaration. 3. The maximum deferral limit for calendar year 2008 is $15,500. 4. Participants within three years of normal retirement age, as defined by the plan document, may contribute up to twice the maximum deferral limit effective in the year the provision is being used. 5. Participants will no longer be subject to taxes on the distributions until the distributions are received. In addition, participants no longer need to choose a payout date when they separate from service, and they will be able to make changes to their payouts once payouts have begun. 6. EGTRRA repeals several required minimum distribution (RMD) requirements that were unique to 457 plans by allowing 457 plans to follow the new RMD rules that are applicable to qualified plans. 7. Eligible distributions from governmental 457 plans may rollover to tax-free 401(k)s and other tax qualified plans, 403(b) annuities, and other types of eligible plans that accept rollovers or an IRA. In addition, a surviving spouse may rollover eligible distributions from a deceased spouse's plan to his or her own eligible plan. 8. EGTRRA changes the criteria for determining when a distribution may be made from a 457 plan from the more restrictive "separation from service" standard to the "severance from employment" standard. Staff recommends that the Resolution be approved. Financial Impact: There is no cost to the City. Recommended Motion: Adopt Resolution. NATIONWIDE RETIREMENT SOLUTIONS, INC. DEFERRED COMPENSATION PLAN AND TRUST AGREEMENT FOR PART-TIME, SEASONAL,AND TEMPORARY EMPLOYEES AMENDED AND RESTATED PLAN DOCUMENT (FICA-Substitute Plan or OBRA Plan) Effective January 1, 2008 The Plan consists of the provisions set forth in this document,and is applicable to each Part-time,Seasonal and Temporary Employee (PST)who is required to participate in the Plan. The Plan is effective as to each Part-time,Seasonal and Temporary Employee upon the date he becomes a Participant by entering into and filing with the Administrator the Acknowledgement Form/Card referred to herein,or,in the case of a Takeover Plan,the Plan Sponsor's execution of an Entity Authorization Form. ARTICLE I Definitions 1.01. The following terms shall,for purposes of this Plan,have the meaning set forth below. (a) ACKNOWLEDGEMENT FORM/CARD means the application to the Administrator to participate in the Plan. (b) ADMINISTRATOR means Nationwide Retirement Solutions,Inc. (c) ACCOUNT BALANCE means the bookkeeping account maintained with respect to each Participant which reflects the value of the deferred Compensation credited to the Participant, including the Participant's Annual Deferrals, the earnings or losses of the Participant's account (net applicable account expenses and fees) allocable to the Participant. The Account Balance includes any Plan Sponsor contributions,any Eligible Rollover Accounts(s),any plan-to-plan transfers,and any account established for a Beneficiary after a Participant's death. If a Participant has more than one designated Beneficiary at the time of the Participant's death,then a separate account shall be established and maintained for each Beneficiary. (d) ANNUAL DEFERRAL means the amount of Compensation deferred by a Participant during a calendar year of Compensation and any contributions by the Plan Sponsor to the Participant's account. The minimum amount deferred into the Account Balance must equal at least 7.5%of Participant's Compensation,or such other minimum amount as shall be required for the Plan to be considered a retirement system under IRC Section 3121(b)(7)(F) and Treas.Reg. 31.3121(b)(7)-2. All Participant Compensation deferred shall be invested into the Nationwide group fixed annuity. The Annual Deferral amounts deferred by a Participant or contributed by the Plan Sponsor are on a pre-tax basis. (e) BENEFICIARY means the person(s)properly designated by a Participant under Article VII, or,if none,the Participant's estate,which is entitled to receive benefits under the Plan after the death of the Participant. (� COMPENSATION means all cash compensation for services to the Plan Sponsor,including salary,wages, fees, commissions,bonuses,and overtime pay that is includible in the Part-time, San Bernardino PST Plan 1 June 12,2008 ©Nationwide Retirement Solutions,Inc. Seasonal and Temporary Employee's gross income for the calendar year,plus amounts that would be cash Compensation for services to the Plan Sponsor includible in the Part-time, Seasonal and Temporary Employee's gross income for the calendar year but for a Compensation reduction election under IRC Sections 125, 132(f,401(k),403(b),or 457(b),including an election to defer Compensation under Article II Election to Defer Compensation of the Plan. After December 31,2008,wage differential payments pursuant to 3401(h)(2),are considered Compensation for purposes of retirement plans. (g) CUSTODIAN means any bank,trust company,or financial institution that may be appointed by the Employer to have custody of some or all of the assets of the Plan. (h) ELIGIBLE RETIREMENT PLAN means an individual retirement account described in IRC Section 408(a),individual retirement annuity described in IRC Section 408(6),a qualified trust described in IRC Section 401(a),an annuity plan described in IRC Section 403(a) or 403(b),or an eligible governmental plan described in IRC Section 457(b). (i) ELIGIBLE ROLLOVER ACCOUNT means the separate bookkeeping account(s) maintained by the Administrator within the Plan for a Participant for amounts of eligible rollover contributions under Section 6.01 Eligible Rollover Contributions to the Plan. (j) 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),and a non-spouse Beneficiary under IRC Section 402(c)(9)(e). (k) EMPLOYEE means all part-time, seasonal, or temporary employees of the Employer any portion of whose income is subject to withholding of federal income tax. (1) 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 I31 of the same year. (m) INCLUDIBLE COMPENSATION means a Part-time,Seasonal,and Temporary Employee's actual wages in box 1 of Form W-2 for a given year for services performed for the Plan Sponsor, but subject to a maximum of$200,000 (or such higher maximum as may apply under IRC Section 401(a)(17)) and increased(up to the dollar maximum) by any Compensation reduction election under IRC Sections 125, 132(f),401(k),403(b),or 457(b),including an election to defer Compensation under Section 2.02 Election Required for Participation. The amount of Includible Compensation shall be determined without regard to community property laws. (n) INVESTMENT FUND means a fund established by the City of San Bernardino as a convenient method of setting aside a portion of its assets to meet its obligations under the Plan for the Trust of custodial account,without distinction between principal and income. (o) IRC means the Internal Revenue Code of 1986,as now in effect or as hereafter amended. All citations to sections of the Code are to such sections as they may from time to time be amended or renumbered. (p) OBRA means the Omnibus Budget Reconciliation Act of 1990,as now in effect or as hereafter amended. San Bernardino PST Plan 2 June 12,2008 0 Nationwide Retirement Solutions,Inc. (q) PARTICIPANT means any Part-time,Seasonal,and Temporary(PST) employee who is subject to IRC Section 3121(b)(7) (F),as amended,and the regulations thereunder,and who must participate under this Plan by signing the Acknowledgement Form/Card. (r) PLAN means the Part-Time,Seasonal,and Temporary(PST)Deferred Compensation Plan for City of San Bernardino Temporary Employees as set forth in this plan document and as it may be amended from time to time. (s) PLAN SPONSOR means the City of San Bernardino,which is an eligible governmental i re performed b Part-time employer pursuant to IRC Section 457(e)(1),for which services a p y , Seasonal,and Temporary Employee,and which participates in this Plan. (t) PLAN YEAR means the calendar year in which the Plan becomes effective,and each succeeding calendar year during the existence of the Plan. (u) PART-TIME, SEASONAL AND TEMPORARY EMPLOYEE means any person who receives any type of Compensation from the Plan Sponsor for services rendered to the Plan Sponsor(including,but not limited to,elected or appointed officials and salaried employees). (v) SEVERANCE FROM EMPLOYMENT means the date on which the Participant dies,retires or otherwise has a Severance from Employment with the Plan Sponsor. (w) SPOUSE means a person of the opposite sex who is a husband or wife,as defined under Title 1, Chapter 1,Section 7 of the United States Code. (x) TAKEOVER PLAN shall mean this Plan when established by a Plan Sponsor to replace an existing FICA-Substitute or OBRA plan. (y) TRUSTEE/CUSTODIAN means the entity or person hereafter appointed by the City of San Bernardino to act as Trustee or Custodian of the Trust in accordance with the Plan. (z) VALUATION DATE means each business day/the last day of the calendar month/the last day of the calendar quarter/each December 31. 1.02 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. ARTICLE II Election to Defer Compensation 2.01 Eligibility to Participate—New Part-time, Seasonal,and Temporary Employee (PST). A new Part-time,Seasonal,Temporary Employee shall,as a condition of employment participate in the Plan by signing and filing with the Administrator an Acknowledgement Form/Card and thereby consenting to a reduction of salary by the Annual Deferral amount specified in the Acknowledgement Form/Card. Allocations to the Participant's Account Balance must equal at least 7.5% of the Participant's Compensation,or such other minimum amount as shall be required for the Plan to be considered a retirement system under IRC Section 3121(b)(7)(F) and Treas. Reg. 31.3121(b)(7)-2,and the reduction in the Participant's salary shall begin immediately thereafter. San Bernardino PST Plan 3 June 12,2008 I0 Nationwide Retirement Solutions,Inc. 2.02 Eligibility to Participate—Current Part-time,Seasonal and Temporary Employee (PST). A PST employee who is newly eligible to participate in the Plan shall,prior to becoming eligible to participate in the Plan,sign and file with the Administrator an Acknowledgement For and thereby consent to a reduction of salary by the Annual Deferral amount specified in the Acknowledgement Form/Card. Allocations to the Participant's Account Balance must equal at least 7.5%of the Participant's Compensation or such other minimum amount as shall be required for the Plan to be considered a retirement system under IRC Section 3121(b)(7)(F) and Treas.Reg. 31.3121(b)(7)-2,and the reduction in the Participant's salary shall begin no earlier than the first pay period commencing during the first month after the date on which the Acknowledgement Form/Card is filed with the Administrator. 2.03 Takeover Plans. If the Plan is a Takeover Plan,a Part-time,Seasonal,and Temporary Employee who participated in the predecessor plan shall become a Participant in the Plan upon the Plan Sponsor's execution of the Entity Authorization Form. Allocations to each such Participant's Account Balance must equal at least 7.5%of the Participant's Compensation,or such other minimum amount as shall be required for the Plan to be considered a retirement system under IRC Section 3121(b)(7)(F) and Treas.Reg. 31.3121(b)(7)-2,and the reduction in the Participant's salary shall begin immediately thereafter. 2.04 Information Provided by the Participant. Each Part-time,Seasonal and Temporary Employee enrolling in the Plan should provide to the Plan Sponsor at the time of initial enrollment,and later if there are any changes,any information necessary or advisable for the Plan Sponsor to administer the Plan,including,without limitation,whether the Part-time,Seasonal and Temporary Employee is a Participant in any other eligible plan under IRC Section 457(b). 2.05 Amendment of Participation Elections. Subject to other provisions of the Plan,and if permitted by the Plan Sponsor, the Participant may revise his participation elections. 2.06 Amendment of Annual Deferral Election. A Participant may amend the amount of Compensation to be deferred by filing with the Administrator an amendment on a form and in the procedural manner approved by the Administrator,subject to the minimum Annual Deferral requirements under the Plan. Any amendment which increases or decreases the amount of Annual Deferrals for any pay period shall be effective only if an agreement providing for such an amendment is entered into before the beginning of the month in which the pay period commences. Any amendment of the Annual Deferrals shall be effective prospectively only and only if the amendment does not reduce the allocations to the Participant's Account Balance below 7.5%of the Participant's Compensation,or such other minimum amount as shall be required for the Plan to be considered a retirement system under IRC Section 3121(b)(7)(F) and Treas.Reg. 31.3121(b)(7)-2. 2.07 Leaves of Absence. Unless a deferral election is otherwise revised,if a Participant is absent from work by leave of absence,Annual Deferrals under the Plan shall continue to the extent that Compensation continues. 2.08 Participant Disability. A disabled Participant may elect to defer Compensation during any portion of a period of disability to the extent the Participant has actual Compensation (not imputed compensation and not disability benefits) from which to defer to the Plan and has not had a Severance from Employment,as determined by the Plan Sponsor. 2.09 Protection of Persons Who Serve in a Uniformed Service. A Part-Time,Seasonal and Temporary Employee whose employment is interrupted by qualified military service under IRC Section 414(u) or who is on a leave of absence for qualified military service under IRC Section 414(u) San Bernardino PST Plan 4 June 12,2008 0 Nationwide Retirement Solutions,Inc. may elect to make additional Annual Deferrals upon resumption of employment with the Plan Sponsor equal to the maximum Annual Deferrals that the Part-time,Seasonal and Temporary Employee could have elected during that period if the PST employment with the Plan Sponsor had continued(at the same level of Compensation)without the interruption or leave,reduced by the Annual Deferrals,if any,actually made for the PST employee during the period of the interruption or leave. This right applies for five (5) years following the resumption of employment(or,if sooner, for a period equal to three times the period of the interruption or leave). 2.10 Treatment of Differential Wage Payments for Retirement Plan Purposes. (a) Differential Wage Payments to Active Duty Members of the Uniformed Services. Wage differential payments that are made by the Plan Sponsor after December 31,2008,to a Public Employee with respect to any period during which a Public Employee is performing service in the uniformed services while on active duty for a period of more than thirty(30) days,and represents all or a portion of the wages the Public Employee would have received from the Plan Sponsor if the Public Employee were performing service for the Plan Sponsor shall be treated as a payment of wages by the Plan Sponsor to the Public Employee. A Public Employee receiving a differential wage payment shall be treated,(i) as an employee of the Plan Sponsor,and(ii) the differential wage payment shall be treated as compensation under IRC Section 219(f (1). (b) Special Rule for Distributions to Active Duty Members of the Uniformed Services. Notwithstanding subsection (a)(i) above, for purposes of Section 5.01(b) herein,a Public Employee shall be treated as having been severed from employment during any period the individual is performing service in the uniformed services. ARTICLE III Limitations on Amounts Deferred 3.01 Basic Annual Limitation. The maximum amount of the Annual Deferral under the Plan for any calendar year shall not exceed the lesser of(i) the Basic Annual Limitation or (ii) the Participant's Includible Compensation for the calendar year. The Applicable Dollar Amount is the amount established under IRC Section 457(e)(15) applicable as set forth below: 2002 $11,000 2003 $12,000 2004 $13,000 2005: $14,000 2006: $15,000,adjusted for cost-of-living after 2006 to the extent provided under IRC Section 415(d). 3.02 Special Rules. For purposes of this Article III,the following rules shall apply: (a) Participant Covered By More Than One Eligible Plan. If the Participant is or has been a Participant in one or more other eligible plans within the meaning of IRC Section 457(b) for a given year,then this Plan and all such other plans shall be considered as one plan for purposes of applying the foregoing limitations of this Article III. For this purpose,the Plan Sponsor shall take into account any other such eligible plan established by the Plan Sponsor. San Bernardino PST Plan 5 June 12,2008 ©Nationwide Retirement Solutions,Inc. (b) Disregard Excess Deferrals. For purposes of Section 3.01 Basic Annual Limitation,an individual is treated as not having deferred Compensation under the Plan for a prior taxable year to the extent Excess Deferrals under the Plan are distributed,as described in Section 3.03 Correction of Excess Deferrals. 3.03 Correction of Excess Deferrals. (a) If Annual Deferrals credited to a Participant's Account Balance during the current Plan Year exceed the limitations described above as determined by the Plan Sponsor, the Administrator shall return the excess as directed by the Plan Sponsor as soon as administratively practicable after the Administrator is notified that there is an Excess Deferral. (b) If the Annual Deferral on behalf of a Participant for any calendar year exceeds the limitations described above as determined by the Plan Sponsor,or the Annual Deferral on behalf of a Participant for any calendar year exceeds the limitations described above when combined with other amounts deferred by the Participant under another eligible deferred compensation plan pursuant to IRC Section 457(b) then the Annual Deferral, to the extent any excess of the applicable limitation (adjusted for any income or loss in value,if any,allocable thereto), shall be distributed as soon as administratively practicable by the Administrator at the determination and direction of the Plan Sponsor. ARTICLE IV Plan Sponsor Contributions 4.01 The Plan Sponsor may contribute to the Plan for Participants. Plan Sponsor contributions shall vest at the time such contributions are made. Plan Sponsor contributions shall apply toward the maximum deferral limits in the Plan Year that such contributions are made. ARTICLE V Distribution of Benefits 5.01 Benefit Distributions at Retirement or Other Severance from Employment. A Participant may elect to commence distribution of benefits at any time after retirement or other Severance from Employment. Distributions from the Plan may not be made to a Participant earlier than: (a) the calendar year in which the Participant attains age 70'/2;or (b) the calendar year in which the Participant retires or otherwise has a Severance from Employment. All irrevocable elections of a benefit commencement date by a Participant or a Beneficiary made prior to January 1,2002 and defaulted distributions (other than a defaulted distribution to an annuity option)may be voided at the election of the Participant or the Beneficiary. In no event may distribution of benefits commence later than the date described in Section 5.03(b) Required Beginning Date. All irrevocable elections of a Benefit Commencement Date made by Participants prior to January 1,2002 and defaulted distributions (other than a defaulted distribution to an annuity option)may be voided at the election of the Participant. San Bernardino PST Plan 6 June 12,2008 ©Nationwide Retirement Solutions,Inc. 5.02 Forms of Distribution—Benefit Payment Options. Benefits shall be paid in accordance with the payment option elected by the Participant. Payment,method of payment,and settlement options are available as provided by each of the available investment specifications. The Participant shall elect the method of payment based upon the options then available under the Plan,including but not limited to lump sum distributions,periodic payment by fixed amount,periodic payment by fixed time period,partial lump sum payment or purchased annuity. A Participant or Beneficiary who has chosen a payment option,other than the purchased annuity option,shall have the ability to change his payment option subject to any restrictions or limitations imposed by the Plan,the Administrator, an investment option provider,any regulatory agency,or as otherwise required by law. 5.03 Required Minimum Distributions. All distributions under the Plan must comply with IRC Section 401(a)(9) and the regulations issued thereunder. The provisions of this Section 5.03 will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year. The term Designated Beneficiary as used in this Section 5.03 shall have the meaning set forth in Treas.Reg. 1.401(a)(9)-4. (a) Requirements of Treasury Regulations Incorporated into Plan. All distributions required under this Section 5.03 will be determined and made in accordance with the Treasury Regulations promulgated under IRC Section 401(a)(9). (b) Required Beginning Date. The Participant's entire interest will be distributed,or begin to be distributed,to the Participant no later than the Participant's required beginning date,which is to begin no later than April 1 following the calendar year in which the Participant attains age 70'/2 or has a Severance from Employment,whichever is later. (c) Death of Participant before Distributions Begin. If the Participant dies before distributions begin,the Participant's entire interest will be distributed,or begin to be distributed,no later than as follows: (1) If the Participant's surviving Spouse is the Participant's sole Designated Beneficiary, distributions to the surviving Spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant dies,or by December 31 of the calendar year in which the Participant would have attained age 70'/2,if later. (2) If the Participant's surviving Spouse is not the Participant's sole Designated Beneficiary, distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died. (3) If there is no Designated Beneficiary as of September 30 of the year following the year of the Participant's death,and there are no other Designated Beneficiaries,the Participant's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (4) If the Participant's surviving Spouse is the Participant's sole Designated Beneficiary and the surviving Spouse dies after the Participant but before distributions to the surviving Spouse begin,this Section 5.03 will apply as if the surviving Spouse were the Participant. (d) Required Minimum Distributions during Participant's Lifetime. During the Participant's lifetime,the minimum amount that will be distributed for each distribution calendar year is the lesser of: San Bernardino PST Plan 7 June 12,2008 ©Nationwide Retirement Solutions,Inc. (1) the quotient obtained by dividing the Participant's Account Balance by the distribution period in the Uniform Lifetime Table set forth in Treas.Reg. 1.401(a)(9)-9,using the Participant's age as of the Participant's birthday in the distribution calendar year;or (2) if the Participant's sole Designated Beneficiary for the distribution calendar year is the Participant's Spouse,the quotient obtained by dividing the Participant's Account Balance by the number in the Joint and Last Survivor Table set forth in Treas.Reg. 1.401(a)(9)-9,using the Participant's and Spouse's attained ages as of the Participant's and Spouse's birthdays in the distribution calendar years. (e) Death On or After Date Distributions Begin and Participant Survived by Designated Beneficiary. (1) If the Participant dies on or after the date distributions begin and there is a Designated Beneficiary,the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participant's Designated Beneficiary,determined as follows: The Participant's remaining life expectancy is calculated using the age of the Participant in the year of death,reduced by one for each subsequent year. (2) If the Participant's surviving Spouse is the Participant's sole Designated Beneficiary,the remaining life expectancy of the surviving Spouse is calculated for each distribution calendar year after the year of the Participant's death using the surviving Spouse's age as of the Spouse's birthday in that year. For distribution calendar years after the year of the surviving Spouse's death,the remaining life expectancy of the surviving Spouse is calculated using the age of the surviving Spouse as of the Spouse's birthday in the calendar year of the Spouse's death,reduced by one for each subsequent calendar year. (3) If the Participant's surviving Spouse is not the Participant's sole Designated Beneficiary,the Designated Beneficiary's remaining life expectancy is calculated using the age of the Beneficiary in the year following the year of the Participant's death,reduced by one for each subsequent year. (4) No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Participant's death,the minimum amount that will be distributed,in accordance with Section 7.01 Acceptance of Beneficiary Designation by Administrator,for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the Participant's remaining life expectancy calculated using the age of the Participant in the year of death,reduced by one for each subsequent year. (1) Death before Date Distributions Begin and Participant Survived by Designated Beneficiary. If the Participant dies before the date distributions begin and there is a Designated Beneficiary,the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the remaining life expectancy of the Participant's Designated Beneficiary. (1) No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Participant's death, distribution,in accordance with Section 7.01 Acceptance of Beneficiary San Bernardino PST Plan 8 June 12,2008 ©Nationwide Retirement Solutions,Inc. Designation by Administrator,of the Participant's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (g) Death of the Surviving Spouse before Distributions to Surviving Spouse are Required to Begin. If the Participant dies before the date distributions begin,the Participant's surviving Spouse is the Participant's sole Designated Beneficiary,and the surviving Spouse dies before distributions are required to begin,this Section 5.03 will apply as if the surviving Spouse were the IParticipant. (h) Election of Payment Option. If a Participant or Beneficiary fails to elect a payment option that meets the requirements of IRC Section 401(a)(9),the Administrator will initiate such a distribution. A Participant or Beneficiary who has chosen a payment option,other than an annuity option,shall have the ability to change his or her payment option. 5.04 Order of Priorities. This Section 5.04 has been prepared in accordance with Treasury Regulations promulgated under IRC Section 401(c)(9). To the extent there is a conflict between Section 5.03 Required Minimum Distributions,or this Section 5.04 and the IRC,the provisions of the IRC and applicable Treasury Regulations shall prevail. For any calendar year,a Beneficiary may elect distribution of a greater amount(not to exceed the amount of the remaining Account Balance in lieu of the amount calculated using the formula set forth in Section 5.01 Benefit Distributions at Retirement or Other Severance from Employment). 5.05 Death Benefit Distributions. If the Participant dies before the benefits to which he is entitled under the 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 form Iof distribution of such benefits, subject to the limitations set forth in the Plan. 5.06 Amount of Account Balance. Except as provided in Section 5.02 Forms of Distribution—Benefit Payment Options,the amount of any payment under this Article V shall be based on the amount of the Account Balance on the preceding Valuation Date. 5.07 Treatment in the Case of Death or Disability Resulting from Active Military Service for Benefit Accrual Purposes. Death Benefits under USERRA-Qualified Active Military Service. A Participant who dies while performing qualified military service,as defined in IRC Section 414(u),the Beneficiary(ies) of the Participant are entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service)provided under the Plan had the Participant resumed and then terminated employment on account of death. ARTICLE VI Eligible Rollovers and Plan-to-Plan Transfers 6.01 Eligible Rollover Contributions to the Plan. (a) Incoming Rollover Contributions. A Participant who is a Part-time,Seasonal and Temporary Employee and who is entitled to receive an Eligible Rollover Distribution from another Eligible Retirement Plan may request to have all or a portion of the Eligible Rollover Distribution paid to the Plan,provided, San Bernardino PST Plan 9 June 12,2008 ©Nationwide Retirement Solutions,Inc. (1) the Eligible Rollover Distribution is made entirely in the form of U.S. dollars,and, (2) 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). (b) Definition of Eligible Rollover Distribution. For purposes of Section 6.01(a)Incoming Rollover Contributions,an Eligible Rollover Distribution means any contribution of all or any portion of a Participant's benefit under another Eligible Retirement Plan to the Plan,except that an Eligible Rollover Distribution does not include: (1) any installment payment for a period of 10 years or more, (2) any distribution made as a result of an Unforeseeable Emergency,or (3) For any other distribution,the portion,if any,of the distribution that is a required minimum distribution under IRC Section 401(a)(9). (c) Separate Account for Eligible Rollover Contributions. The Plan shall establish and maintain for the Participant an Eligible Rollover Account for any Eligible Rollover Distribution paid to the Plan from any Eligible Retirement Plan that is not an eligible governmental plan under IRC Section 457(b). In addition,the Plan shall establish and maintain for the Participant an Eligible Rollover Account for any Eligible Rollover Distribution paid to the Plan from any Eligible Retirement Plan that is an eligible governmental plan under IRC Section 457(b). 6.02 Permissive Rollovers to an Eligible Retirement Plan. (a) Eligible Rollover Distributions to Participants and Spouse Beneficiary (ies). A Participant or the surviving Spouse Beneficiary(ies) of a Participant who is entitled to an Eligible Rollover Distribution may elect,at the time and in the manner prescribed by the Administrator,to have all the Account Balance paid directly to an Eligible Retirement Plan specified by the Participant in a direct rollover. (b) Eligible Rollover Distributions by a Non-spousal Beneficiary: For distributions made after December 31St 2006,a Beneficiary who is a non-spouse and is a"designated beneficiary" (as defined in IRC Section 401(a)(9)(e)),may elect,at the time and in the manner prescribed by the Administrator,to have a direct trustee-to-trustee transfer of a deceased Participant's account from the Plan to an individual retirement plan described in IRC Section 408(a) or(b). Such individual retirement plan must be established to receive the distribution on behalf of the designated beneficiary and treated as an inherited IRA. Distributions meeting these requirements shall be treated as an Eligible Rollover Distribution for purposes of IRC Section 402(c)(11). (c) Eligible Rollover Distributions to a Roth IRA: For distributions made after December 31,2007,a Participant with an Eligible Rollover Distribution may elect to have the Eligible Rollover Distribution paid to a Roth IRA. Participants are solely responsible for determining whether a rollover made to a Roth IRA is an Eligible Rollover Distribution. The Plan,the Plan Sponsor,and the Administrator are not San Bernardino PST Plan 10 June 12,2008 0 Nationwide Retirement Solutions,Inc. responsible for making this determination,shall incur no liability whatsoever regarding Participant rollover distributions to Roth IRAs under this Section or any tax reporting or tax consequences for rollover distributions under this Section. The Administrator may take any and all necessary measures to ensure that the Plan is not jeopardized by any misrepresentations by the Participant and may develop reasonable procedures for Eligible Rollover Distributions to Roth IRAs under this Section. 6.03 Plan-to-Plan Transfers to the Plan of Eligible Governmental 457(b)Assets. (a) Permissive Plan-to-Plan Transfers. At the direction of the Plan Sponsor,the Administrator may permit a class of Participants who are Participants in another eligible governmental IRC Section 457(b)Plan to transfer assets to the Plan as provided herein. Such a transfer is permitted only if the other Plan provides for the direct transfer of each Participant's interest therein to the Plan. 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. (b) Effect of Transfers on Annual Deferral Limitations. Any such transferred amount shall not be subject to the limitations of Section 3.01 Basic Annual Limitation as an Annual Deferral, provided however, that the actual amount deferred during the calendar year under both Plans shall be taken into account in calculating the maximum Annual Deferral for that year. The amount so transferred shall be credited to the Participant's Account Balance and shall be held, accounted for,administered,and otherwise treated in the same manner as an Annual Deferral by the Participant under the Plan. (c) Required Documentation for Transfers to the Plan. The Administrator may require such documentation from the other Plan as it deems necessary to effectuate the transfer in accordance with IRC Section 457(e)(10) and Treas.Reg. 1.457-10(b) and to confirm that the other Plan is an eligible governmental plan as defined in Treas.Reg. 1.457-2(o. 6.04 Plan-to-Plan Transfers from the Plan to another Eligible Governmental 457(b) Plan. (a) Outgoing Plan-to-Plan Transfers Pursuant to Severance of Employment. At the direction of the Plan Sponsor,the Administrator may permit a class of Participants and Beneficiaries to elect to have all of their Account Balance transferred to another eligible governmental plan within the meaning of IRC Section 457(b) and Treas.Reg. 1.457-2(f). A transfer is permitted under this Section 6.04(a) for a Participant only if the Participant has had a Severance from Employment with the Plan Sponsor and is a Part-time,Seasonal and Temporary Employee of the entity that maintains the other eligible governmental 457(b)Plan. Further,a transfer is permitted under this Section 6.04(a) only if the other eligible governmental 457(b)plan provides for the acceptance of plan-to-plan transfers with respect to the Participants and Beneficiaries and for each Participant and Beneficiary to have an amount deferred under the other plan immediately after the transfer at least equal to the amount transferred. (b) Plan-to-Plan Transfers to Voluntary 457 Plan. If a Participant is no longer eligible to participate in the Plan,but elects to participate in the Plan Sponsor's voluntary Section 457 deferred compensation plan,and such other plan accepts transfers,the value of the Participant's Account Balance under the Plan may be transferred to the Plan Sponsor's voluntary Section 457 deferred compensation plan at the time and in the manner prescribed by the Administrator. (c) Limitation of Liability. Upon the transfer of assets under this Section 6.04,the Plan's liability San Bernardino PST Plan 11 June 12,2008 ©Nationwide Retirement Solutions,Inc. to pay benefits to the Participant or Beneficiary under this Plan shall be discharged to the extent of the amount so transferred for the Participant or Beneficiary. The Administrator may require such documentation from the receiving plan as it deems appropriate or necessary to comply with this Section 6.04(for example,to confirm that the receiving plan is an eligible governmental plan under paragraph (a) of this Section 5.04,and to assure that the transfer is permitted under the receiving plan) or to effectuate the transfer pursuant to Treas.Reg. 1.457-10(b). ARTICLE VII Designation of BENEFICIARY 7.01 Acceptance of Beneficiary Designation by Administrator. The Participant shall have the right to file with the Administrator,a signed,written beneficiary or change of beneficiary form designating the person or persons who shall receive the benefits payable under the Plan in the event of the Participant's death,provided that a married Participant may designate someone other than his/her Spouse as his/her Beneficiary only with his/her Spouse's consent.. 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. A person must survive the Participant to be his/her Beneficiary. If a Participant designates more than one person as his/her Beneficiary,unless the Participant provides otherwise,all persons of the same designation (i.e. "primary"or"contingent") shall share the Participant's Account Balance equally. If the Participant fails to designate a Beneficiary or if no designated Beneficiary survives the Participant,his/her Beneficiary shall be his/her Spouse if he is married,or,if not,his/her estate.. If the Participant dies without having a valid beneficiary form on file,the benefits will be paid to the Participant's estate or as otherwise required by applicable state law. A change in the Beneficiary designation shall take effect when the election is accepted by the Administrator,and must be on a form and in the procedural manner approved by the Administrator. 7.02 Participant Obligation to File Beneficiary Designation Form. The Participant accepts and acknowledges that he has the burden of executing and filing with the Administrator prior to the Participant's death a proper beneficiary designation form. If the Participant dies without having a valid Beneficiary form on file with the Administrator,the benefits will be paid to the Participant's estate. ARTICLE VIII Investment of Deferred Amounts 8.01 Investment Funds. The assets of the Plan and each Participant's and Beneficiary's interest herein, shall be invested and re-invested in accordance with the provisions of the Plan. The City of San Bernardino shall establish one or more investment funds for the purpose of investing Annual Deferrals credited to Participant Account Balances. The City of San Bernardino may cause funds contributed or deferred under this Plan to be commingled for investment purposes only,with funds deferred under an eligible deferred compensation plan sponsored by any other governmental authority acceptable to the City of San Bernardino (the"Other Plan") so long as the investment funds under the PST Plan and the Other Plan are substantially similar to the investment funds under this Plan and so long as adequate records are maintained to enable the identification of the portion of such funds and earning thereon that pertain to each Plan. 8.02 Designation for Investment. Deferred Compensation amounts shall be delivered by the Plan Sponsor to the Administrator for investment as designated by the Plan Sponsor in the investment San Bernardino PST Plan 12 June 12,2008 ©Nationwide Retirement Solutions,Inc. option selected by the Plan Sponsor. The Plan Sponsor shall be under no obligation to invest the Annual Deferrals as specified by the Participant. 8.03 Participant Account Credits and Debits. All interest,dividends,charges for premiums and administrative expenses,and changes in value due to market fluctuations applicable to each Participant's Account Balance shall be credited or debited to the account. All dividends will be reinvested in the associated investment option. ARTICLE IX Administration of Plan 9.01 Exclusive Benefit of Participants and Beneficiaries. The Plan Sponsor may at any time amend, modify or terminate the Plan under Section 12.01 Amendment and Termination,without the consent of the Participant or any Beneficiary;provided,however,that the assets of the Plan shall be held for the exclusive benefit of Participants and Beneficiaries at all times. All amendments shall become effective forty-five(45) days after the issuance of notice of the amendments by the Administrator to the Plan Sponsor. No amendments shall deprive a Participant of any of the benefits to which he is entitled under this Plan with respect to Annual Deferrals credited to his Account Balance prior to the effective date of the amendment. 9.02 No Third Party Interest in Plan. Any companies that may issue any policies,contracts,or other forms of investment media used by the Plan Sponsor or specified by the Participant,are not parties to this Plan and such companies shall have no responsibility or accountability to any Participant or Beneficiary with regard to the operation of this Plan. 9.03 Tax Consequences of Participation in Plan. The Plan Sponsor and the Administrator do not represent or guarantee that any particular federal or state income,payroll,personal property,or other tax consequence will occur because of participation in this Plan. The Participant or Beneficiary should consult with his own representative regarding all questions of federal and state income, payroll,personal property,or other tax consequences arising from participation in this Plan. 9.04 Appointment of Agents. The Administrator shall have the power to appoint agents to act for and in the administration of this Plan and to select depositories for the assets of this Plan. 9.05 Construction. This Plan shall be construed,administered,and enforced according to the Constitution,laws of the state in which the Plan Sponsor resides,and the IRC. 9.06 Total Agreement. This Plan and any properly adopted amendment or modification shall constitute the total agreement or contract between the Plan Sponsor and the Participant regarding the Plan. No oral statement regarding the Plan may be relied upon by the Participant. 9.07 Effect of Adopted Plan Amendment. This Plan and any properly adopted amendment or modification shall be binding on the parties hereto and their respective heirs,administrators,trustees, successors,and assignees and on all Participants and Beneficiaries. ARTICLE X Authority of Plan Sponsor and Administrator San Bernardino PST Plan 13 June 12,2008 0 Nationwide Retirement Solutions,Inc. 10.01 Authority Binding on Participants and Beneficiaries. The Plan Sponsor,the Administrator,or their respective agents shall be authorized to resolve any questions of fact necessary to decide the Participant's right under this Plan and such decision shall be binding on the Participant and Beneficiary,provided,however,that assets of the Plan shall be held for the exclusive benefit of Participants and Beneficiaries at all times. 10.02 Authority to Interpret Plan. The Plan Sponsor,the Administrator,or their respective agents shall be authorized to construe the Plan and to resolve any ambiguity in the Plan. 10.03 Investment Losses. The Participant specifically agrees not to seek recovery against the Plan Sponsor,the Administrator or any other employee,contractee,or agent of the Plan Sponsor or Administrator for any loss sustained by a Participant or a Beneficiary for the non-performance of their duties,negligence,or any other misconduct of the above-named persons, except that this paragraph shall not excuse fraud or wrongful taking by any person. 10.04 Suspension of Benefit Payments. The Plan Sponsor,the Administrator,or their respective agents, if in doubt concerning the correctness of their action in making a payment of a benefit,may suspend the payment until satisfied as to the correctness of the payment or the identity of the person to receive the payment or allow the filing in any State court of competent jurisdiction,a suit in such form as they consider appropriate for a legal determination of the benefits to be paid and the persons to receive them. The Plan Sponsor shall comply with the final orders of the court in any such suit and all Participants,Beneficiaries,and Alternate Payees consent to be bound thereby insofar as it affects the benefits payable under this Plan or the method or manner of payment. 10.05 Hold Harmless. The Plan Sponsor,the Administrator,and their respective agents are hereby held harmless from all court costs and all claims for the attorney's fees arising from any action brought by any Participant or Beneficiary under this Plan or to enforce his rights under this Plan,including any amendment,modification or termination hereof. 10.06 Litigation. The Administrator shall not be required to participate in any litigation concerning the Plan except upon written demand from the Plan Sponsor. The Administrator may compromise, adjust or effect settlement of litigation when specifically instructed to do so by the Plan Sponsor. ARTICLE XI Miscellaneous 11.01 Non-Assignability. Except as provided in Section 11.02 IRS Levy,the interests of each Participant and Beneficiary under the Plan are not subject to the claims of the Participant's or Beneficiary's creditors;and neither the Participant nor any Beneficiary shall have any right to sell,assign, transfer, or otherwise convey the right to receive any payments hereunder or any interest under the Plan, which payments and interest are expressly declared to be non-assignable and non-transferable. Furthermore,in accordance Section 522 of the Bankruptcy Abuse Protection and Consumer Protection Act of 2005 ("the Act' ,retirement funds that are in a fund that is exempt from taxation under IRC Section 457 may be exempted from an individual's property estate for purposes of the Act. 11.02 IRS Levy. Notwithstanding Section 11.01 Non-Assignability, the Administrator may pay from a Participant's,Beneficiary's,or Alternate Payee's Account Balance the amount that the Administrator finds is lawfully demanded under a levy issued by the Internal Revenue Service with respect to that San Bernardino PST Plan 14 June 12,2008 0 Nationwide Retirement Solutions,Inc. Participant or Beneficiary or is sought to be collected by the United States Government under a judgment resulting from an unpaid tax assessment against the Participant or Beneficiary. 11.03 Mistaken Contributions. If any contribution (or any portion of a contribution) is made to the Plan by a good faith mistake of fact, then within one year after the payment of the contribution,and upon receipt in good order of a proper request approved by the Administrator,the amount of the mistaken contribution (adjusted for any income or loss in value,if any,allocable thereto) shall be returned directly to the Participant or,to the extent required or permitted by the Administrator,to the Plan Sponsor. ARTICLE XII Amendment and Termination 12.01 Amendment and Termination. The Plan Sponsor 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 Plan Sponsor 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 Plan Sponsor shall not have the right to reduce or affect the value of any Participant's Account Balance or any rights accrued under the Plan prior to such modification,amendment,termination,or cessation. 12.02 No Effect of Plan on Employment of Participants. Neither the establishment of the Plan nor any modification thereof,nor the establishment of an account,nor any agreement between the Plan Sponsor and the Administrator nor the payment of any benefits,shall be construed as giving to any Participant or other person any legal or equitable right against the Plan Sponsor except as herein provided,and in no event shall the terms of employment of the Part-time,Seasonal and Temporary Employee,Independent Contractor,or Participant be modified or in any way affected. 12.03 Interpretation. This Plan is intended to be an eligible deferred compensation Plan under IRC Section 457,and shall be interpreted and administered in a manner consistent with IRC Section 3121 and regulations thereunder. This Plan may be amended to the extent that it may be necessary to conform to the Plan to the requirements of IRC Sections 457 and 3121,the regulations thereunder, 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 Internal Revenue Service to be administered in a manner inconsistent with the Internal Revenue Code, the Plan Sponsor shall correct such administration. ARTICLE XIII Prior Plan If the Plan Sponsor has already accepted the PST Deferred Compensation Program and adopted an eligible deferred compensation plan,as defined by IRC Section 457 and is defined as a retirement system under IRC Section 3121 and the regulations thereunder,then the Plan Sponsor intends that this Plan shall amend and restate the Prior Plan. In such event,this Plan shall apply to all Participants in the Prior Plan on the effective date hereof,and also to each Part-time,Seasonal and Temporary Employee who elects,or is required,to participate in this Plan on and after the effective date hereof. San Bernardino PST Plan 15 June 12,2008 I ©Nationwide Retirement Solutions,Inc. ARTICLE XIV Trustee/Custodian Provisions 14.1 Trust Requirement. All assets of the Plan,including all Compensation deferred into the Plan, property and rights purchased with such amounts,and all income attributable to such amounts, property or rights,shall(until made available to the Participant or the Participant's Beneficiary) be held for the exclusive benefit of the Participants and their Beneficiaries,as described in IRC Section 457(8). 14.2 Authority of Trustee/Custodian. The Trustee/Custodian shall manage and administer the trust or custodial account,as applicable,without distinction between principal and income,as a non- discretionary Trustee/Custodian, subject to the directions of the IRC. The Trustee or Custodian shall not have any discretion or authority with regard to the investment of the assets of the trust or custodial account,as applicable and shall act solely as a directed Trustee/Custodian of such assets in accordance with the directions of Participants and Beneficiaries as provided herein. The Trustee/Custodian shall have all powers and authority necessary to comply with such directions and with the Trustee's/Custodian's responsibilities under the Plan. 14.3 Accounting. The Trustee/Custodian shall maintain or cause to be maintained suitable records,data, and information relating to the Trustee's/Custodian's functions hereunder. Within ninety(90) days after the close of each fiscal year of the trust or custodial account,as applicable,and at more frequent intervals as agreed to by the City of San Bernardino,and within ninety(90) days after the removal or resignation of the Trustee/Custodian,the Trustee/Custodian shall render to the Employer a written statement and account showing in reasonable summary the assets and liabilities of the trust or custodial account,as applicable,and transactions engaged in during the preceding fiscal year or period. Unless the City of San Bernardino shall have filed with the Trustee/Custodian written exceptions or objections to any such statement and account within ninety(90) days after receipt s thereof,the City of San Bernardino shall be deemed to have approved such statement and account; and in such case or upon written approval by the City of San Bernardino of any such statement and account,the Trustee/Custodian shall be released and discharged with respect to all matters and things embraced in such statement and account as though it had been settled by a decree of a court of competent jurisdiction in an action or proceeding in which the City of San Bernardino,all other necessary parties and all persons have a beneficial interest in the trust or custodial account were parties,except for any actions resulting from the Trustee's/Custodian's bad faith,fraud,gross negligence,or willful misconduct. Notwithstanding the foregoing provisions of the subsection, however, the Trustee/Custodian shall have the right to have a judicial settlement of the Trustee's/Custodian's account and in any proceeding for such a judicial settlement or for instructions in connection with the trust or custodial account,the only necessary party in addition to the Trustee/Custodian shall be the City of San Bernardino,and no Participant or other person having or claiming any interest in the trust or custodial account shall be entitled to any notice or service of process (except as required by law). 14.4 Resignation or Removal of Trustee/Custodian. The Trustee/Custodian acting hereunder may resign at any time by giving sixty(60) days'prior written notice to the City of San Bernardino,which notice or time period may be waived by the City of San Bernardino. The City of San Bernardino may remove the Trustee/Custodian at any time upon sixty(60) days'prior written notice to the Trustee/Custodian,which notice or time period may be waived by the Trustee/Custodian. In case of the resignation or removal of the Trustee/Custodian, the Employer shall appoint a successor Trustee/Custodian. 14.5 Standard of Care. The Trustee/Custodian shall discharge the Trustee's/Custodian's duties with San Bernardino PST Plan 16 June 12,2008 0 Nationwide Retirement Solutions,Inc. respect to the trust or custodial account(a) solely in the interest of,and for the exclusive purposes of providing benefits to Participants and Beneficiaries and defraying reasonable expenses of administering the Plan and (b)with the care, skill,prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with these matters would use in the conduct of an enterprise of a like character and like aims. a ARTICLE XV Effective Date This Plan shall be effective as of January 1,2008. San Bernardino PST Plan 17 June 12,2008 ©Nationwide Retirement Solutions,Inc. w COPI 1 RESOLUTION NO. 2 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING AMENDING AND RESTATING A PART-TIME, SEASONAL AND TEMPORARY 3 (PST) DEFERRED COMPENSATION PLAN DOCUMENT (FICA-SUBSTITUTE 4 PLAN OR OBRA PLAN). 5 6 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 7 Section 1. The Mayor and Common Council of the City of San Bernardino hereby 8 authorize and direct the City Manager to execute on behalf of said City an amended and restated 9 City of San Bernardino Part-time, Seasonal and Temporary (PST) Deferred Compensation Plan 10 (FICA-Substitute Plan and OBRA Plan). A copy of the City of San Bernardino Part-time, 11 Seasonal and Temporary (PST)Deferred Compensation Plan is attached hereto as Exhibit"A" 12 and incorporated herein by reference as fully as though set forth at length. 13 Section 2. The authorization to execute the above referenced amendment is rescinded if 14 it is not executed within sixty (60) days of passage of this resolution. 15 16 17 18 19 20 21 22 23 24 25 CADocuments and Settings\sharerja\My Documents0ef Comp PST 2008.Reso.doc Ci 1 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING AMENDING AND RESTATING A PART-TIME, SEASONAL AND TEMPORARY 2 (PST) DEFERRED COMPENSATION PLAN DOCUMENT (FICA-SUBSTITUTE 3 PLAN OR OBRA PLAN). 4 I HERBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 5 Common Council of the City of San Bernardino at a meeting thereof, held 6 on the day of , 2008, by the following vote, to wit: Council Members: AYES NAYS ABSTAIN ABSENT 8 ESTRADA 9 BAXTER 10 BRINKER 11 DERRY 12 KELLEY 13 JOHNSON 14 McCAMMACK 15 16 CITY CLERK 1� The forgoing Resolution is hereby approved this day of , 2008. 18 19 Patrick J. Morris, Mayor 20 City of San Bernardino 21 Approved as to form: 22 JAMES F. PENMAN, City Attorney 23 24 25 By: CADocuments and Settings\sharerjaNy Documents\Def Comp PST 2008.Reso.doc Exhibit A NATIONWIDE RETIREMENT SOLUTIONS, INC. DEFERRED COMPENSATION PLAN AND TRUST AGREEMENT FOR PART-TIME, SEASONAL,AND TEMPORARY EMPLOYEES AMENDED AND RESTATED PLAN DOCUMENT (FICA-Substitute Plan or OBRA Plan) Effective January 1, 2008 The Plan consists of the provisions set forth in this document,and is applicable to each Part-time,Seasonal and Temporary Employee (PST)who is required to participate in the Plan. The Plan is effective as to each Part-time,Seasonal and Temporary Employee upon the date he becomes a Participant by entering into and filing with the Administrator the Acknowledgement Form/Card referred to herein,or,in the case of a Takeover Plan, the Plan Sponsor's execution of an Entity Authorization Form. ARTICLE I Definitions 1.01. The following terms shall, for purposes of this Plan,have the meaning set forth below. (a) ACKNOWLEDGEMENT FORM/CARD means the application to the Administrator to participate in the Plan. (b) ADMINISTRATOR means Nationwide Retirement Solutions,Inc. (c) ACCOUNT BALANCE means the bookkeeping account maintained with respect to each Participant which reflects the value of the deferred Compensation credited to the Participant, including the Participant's Annual Deferrals, the earnings or losses of the Participant's account (net applicable account expenses and fees) allocable to the Participant. The Account Balance includes any Plan Sponsor contributions,any Eligible Rollover Accounts(s),any plan-to-plan transfers,and any account established for a Beneficiary after a Participant's death. If a Participant has more than one designated Beneficiary at the time of the Participant's death,then a separate account shall be established and maintained for each Beneficiary. (d) ANNUAL DEFERRAL means the amount of Compensation deferred by a Participant during a calendar year of Compensation and any contributions by the Plan Sponsor to the Participant's account. The minimum amount deferred into the Account Balance must equal at least 7.5%of Participant's Compensation, or such other minimum amount as shall be required for the Plan to be considered a retirement system under IRC Section 3121(b)(7)(F) and Treas.Reg. 31.3121(b)(7)-2. All Participant Compensation deferred shall be invested into the Nationwide group fixed annuity. The Annual Deferral amounts deferred by a Participant or contributed by the Plan Sponsor are on a pre-tax basis. (e) BENEFICIARY means the person(s)properly designated by a Participant under Article VII, or,if none, the Participant's estate,which is entitled to receive benefits under the Plan after the death of the Participant. (f) COMPENSATION means all cash compensation for services to the Plan Sponsor,including salary,wages, fees,commissions, bonuses, and overtime pay that is includible in the Part-time, San Bernardino PST Plan 1 June 12,2008 Nationwide Retirement Solutions,Inc. I Exhibit A Seasonal and Temporary Employee's gross income for the calendar year,plus amounts that would be cash Compensation for services to the Plan Sponsor includible in the Part-time, Seasonal and Temporary Employee's gross income for the calendar year but for a Compensation reduction election under IRC Sections 125, 132(f),401(k),403(b),or 457(b),including an election to defer Compensation under Article II Election to Defer Compensation of the Plan. After December 31,2008,wage differential payments pursuant to 3401(h)(2),are considered Compensation for purposes of retirement plans. (g) CUSTODIAN means any bank, trust company, or financial institution that may be appointed by the Employer to have custody of some or all of the assets of the Plan. (h) ELIGIBLE RETIREMENT PLAN means an individual retirement account described in IRC Section 408(a),individual retirement annuity described in IRC Section 408(b),a qualified trust described in IRC Section 401(a), an annuity plan described in IRC Section 403(a) or 403(b),or an eligible governmental plan described in IRC Section 457(b). (i) ELIGIBLE ROLLOVER ACCOUNT means the separate bookkeeping account(s) maintained by the Administrator within the Plan for a Participant for amounts of eligible rollover contributions under Section 6.01 Eligible Rollover Contributions to the Plan. (j) 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),and a non-spouse Beneficiary under IRC Section 402(c)(9)(e). (k) EMPLOYEE means all part-time, seasonal,or temporary employees of the Employer any portion of whose income is subject to withholding of federal income tax. (1) 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. (m) INCLUDIBLE COMPENSATION means a Part-time,Seasonal, and Temporary Employee's actual wages in box 1 of Form W-2 for a given year for services performed for the Plan Sponsor, but subject to a maximum of$200,000 (or such higher maximum as may apply under IRC Section 401(a)(17)) and increased (up to the dollar maximum) by any Compensation reduction election under IRC Sections 125, 132(f),401(k),403(b), or 457(b),including an election to defer Compensation under Section 2.02 Election Required for Participation. The amount of Includible Compensation shall be determined without regard to community property laws. (n) INVESTMENT FUND means a fund established by the City of San Bernardino as a convenient method of setting aside a portion of its assets to meet its obligations under the Plan for the Trust of custodial account,without distinction between principal and income. (o) IRC means the Internal Revenue Code of 1986,as now in effect or as hereafter amended. All citations to sections of the Code are to such sections as they may from time to time be amended or renumbered. (p) OBRA means the Omnibus Budget Reconciliation Act of 1990, as now in effect or as hereafter amended. San Bernardino PST Plan 2 June 12,2008 C Nationwide Retirement Solutions,Inc. Exhibit A (q) PARTICIPANT means any Part-time, Seasonal,and Temporary (PST) employee who is subject to IRC Section 3121(b)(7) (F),as amended,and the regulations thereunder, and who must participate under this Plan by signing the Acknowledgement Form/Card. (r) PLAN means the Part-Time,Seasonal,and Temporary (PST) Deferred Compensation Plan for City of San Bernardino Temporary Employees as set forth in this plan document and as it may be amended from time to time. (s) PLAN SPONSOR means the City of San Bernardino,which is an eligible governmental employer pursuant to IRC Section 457(e)(1), for which services are performed by Part-time, Seasonal,and Temporary Employee,and which participates in this Plan. (t) PLAN YEAR means the calendar year in which the Plan becomes effective, and each succeeding calendar year during the existence of the Plan. (u) PART-TIME, SEASONAL AND TEMPORARY EMPLOYEE means any person who receives any type of Compensation from the Plan Sponsor for services rendered to the Plan Sponsor(including,but not limited to,elected or appointed officials and salaried employees). (v) SEVERANCE FROM EMPLOYMENT means the date on which the Participant dies,retires or otherwise has a Severance from Employment with the Plan Sponsor. (w) SPOUSE means a person of the opposite sex who is a husband or wife, as defined under Title 1, Chapter 1, Section 7 of the United States Code. (x) TAKEOVER PLAN shall mean this Plan when established by a Plan Sponsor to replace an existing FICA-Substitute or OBRA plan. (y) TRUSTEE/CUSTODIAN means the entity or person hereafter appointed by the City of San Bernardino to act as Trustee or Custodian of the Trust in accordance with the Plan. (z) VALUATION DATE means each business day/the last day of the calendar month/the last day of the calendar quarter/each December 31. 1.02 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. ARTICLE II Election to Defer Compensation 2.01 Eligibility to Participate—New Part-time, Seasonal,and Temporary Employee (PST). A new Part-time,Seasonal,Temporary Employee shall,as a condition of employment participate in the Plan by signing and filing with the Administrator an Acknowledgement Form/Card and thereby consenting to a reduction of salary by the Annual Deferral amount specified in the Acknowledgement Form/Card. Allocations to the Participant's Account Balance must equal at least 7.5% of the Participant's Compensation,or such other minimum amount as shall be required for the Plan to be considered a retirement system under IRC Section 3121(b)(7)(F) and Treas. Reg. IL31.3121(b)(7)-2,and the reduction in the Participant's salary shall begin immediately thereafter. San Bernardino Pgr Plan 3 June 12,2008 ©Nationwide Retirement Solutions-,Inc. a i Exhibit A 2.02 Eligibility to Participate—Current Part-time,Seasonal and Temporary Employee (PST). A PST employee who is newly eligible to participate in the Plan shall,prior to becoming eligible to participate in the Plan, sign and file with the Administrator an Acknowledgement Form/Card and thereby consent to a reduction of salary by the Annual Deferral amount specified in the Acknowledgement Form/Card. Allocations to the Participant's Account Balance must equal at least 7.5% of the Participant's Compensation or such other minimum amount as shall be required for the Plan to be considered a retirement system under IRC Section 3121(b)(7)(F) and Treas. Reg. 31.3121(b)(7)-2, and the reduction in the Participant's salary shall begin no earlier than the first pay period commencing during the first month after the date on which the Acknowledgement Form/Card is filed with the Administrator. 2.03 Takeover Plans. If the Plan is a Takeover Plan, a Part-time,Seasonal,and Temporary Employee who participated in the predecessor plan shall become a Participant in the Plan upon the Plan Sponsor's execution of the Entity Authorization Form. Allocations to each such Participant's Account Balance must equal at least 7.5% of the Participant's Compensation,or such other minimum amount as shall be required for the Plan to be considered a retirement system under IRC Section 3121(b)(7)(F) and Treas. Reg. 31.3121(b)(7)-2, and the reduction in the Participant's salary shall begin immediately thereafter. 2.04 Information Provided by the Participant. Each Part-time, Seasonal and Temporary Employee enrolling in the Plan should provide to the Plan Sponsor at the time of initial enrollment,and later if there are any changes,any information necessary or advisable for the Plan Sponsor to administer the Plan,including,without limitation,whether the Part-time, Seasonal and Temporary Employee is a Participant in any other eligible plan under IRC Section 457(b). 2.05 Amendment of Participation Elections. Subject to other provisions of the Plan,and if permitted by the Plan Sponsor, the Participant may revise his participation elections. 2.06 Amendment of Annual Deferral Election. A Participant may amend the amount of Compensation to be deferred by filing with the Administrator an amendment on a form and in the procedural manner approved by the Administrator, subject to the minimum Annual Deferral requirements under the Plan. Any amendment which increases or decreases the amount of Annual Deferrals for any pay period shall be effective only if an agreement providing for such an amendment is entered into before the beginning of the month in which the pay period commences. Any amendment of the Annual Deferrals shall be effective prospectively only and only if the amendment does not reduce the allocations to the Participant's Account Balance below 7.5% of the Participant's Compensation,or such other minimum amount as shall be required for the Plan to be considered a retirement system under IRC Section 3121(b)(7)(F) and Treas. Reg. 31.3121(b)(7)-2. 2.07 Leaves of Absence. Unless a deferral election is otherwise revised,if a Participant is absent from work by leave of absence,Annual Deferrals under the Plan shall continue to the extent that Compensation continues. 2.08 Participant Disability. A disabled Participant may elect to defer Compensation during any portion of a period of disability to the extent the Participant has actual Compensation (not imputed compensation and not disability benefits) from which to defer to the Plan and has not had a Severance from Employment, as determined by the Plan Sponsor. 2.09 Protection of Persons Who Serve in a Uniformed Service. A Part-Time,Seasonal and Temporary Employee whose employment is interrupted by qualified military service under IRC Section 414(u) or who is on a leave of absence for qualified military service under IRC Section 414(u) San Bernardino PST Plan 4 June 12,2008 ©Nationwide Retirement Solutions,Inc. Exhibit A may elect to make additional Annual Deferrals upon resumption of employment with the Plan Sponsor equal to the maximum Annual Deferrals that the Part-time,Seasonal and Temporary Employee could have elected during that period if the PST employment with the Plan Sponsor had continued (at the same level of Compensation)without the interruption or leave,reduced by the Annual Deferrals,if any, actually made for the PST employee during the period of the interruption or leave. This right applies for five (5) years following the resumption of employment (or,if sooner, for a period equal to three times the period of the interruption or leave). 2.10 Treatment of Differential Wage Payments for Retirement Plan Purposes. (a) Differential Wage Payments to Active Duty Members of the Uniformed Services. Wage differential payments that are made by the Plan Sponsor after December 31,2008, to a Public Employee with respect to any period during which a Public Employee is performing service in the uniformed services while on active duty for a period of more than thirty(30) days, and represents all or a portion of the wages the Public Employee would have received from the Plan Sponsor if the Public Employee were performing service for the Plan Sponsor shall be treated as •payment of wages by the Plan Sponsor to the Public Employee. A Public Employee receiving •differential wage payment shall be treated, (i) as an employee of the Plan Sponsor, and (ii) the differential wage payment shall be treated as compensation under IRC Section 219(f)(1). (b) Special Rule for Distributions to Active Duty Members of the Uniformed Services. Notwithstanding subsection (a)(i) above, for purposes of Section 5.01(b) herein, a Public Employee shall be treated as having been severed from employment during any period the individual is performing service in the uniformed services. ARTICLE III Limitations on Amounts Deferred 3.01 Basic Annual Limitation. The maximum amount of the Annual Deferral under the Plan for any calendar year shall not exceed the lesser of(i) the Basic Annual Limitation or(ii) the Participant's Includible Compensation for the calendar year. The Applicable Dollar Amount is the amount established under IRC Section 457(e)(15) applicable as set forth below: 2002 $11,000 2003 $12,000 2004 $13,000 2005: $14,000 2006: $15,000,adjusted for cost-of-living after 2006 to the extent provided under IRC Section 415(d). 3.02 Special Rules. For purposes of this Article III, the following rules shall apply: (a) Participant Covered By More Than One Eligible Plan. If the Participant is or has been a Participant in one or more other eligible plans within the meaning of IRC Section 457(b) for a given year, then this Plan and all such other plans shall be considered as one plan for purposes of applying the foregoing limitations of this Article III. For this purpose, the Plan Sponsor shall take into account any other such eligible plan established by the Plan Sponsor. San Bernardino PST Plan 5 June 12,2008 ©Nationwide Retirement Solutions,Inc. Exhibit A (b) Disregard Excess Deferrals. For purposes of Section 101 Basic Annual Limitation,an individual is treated as not having deferred Compensation under the Plan for a prior taxable year to the extent Excess Deferrals under the Plan are distributed,as described in Section 3.03 Correction of Excess Deferrals. 3.03 Correction of Excess Deferrals. (a) If Annual Deferrals credited to a Participant's Account Balance during the current Plan Year exceed the limitations described above as determined by the Plan Sponsor, the Administrator shall return the excess as directed by the Plan Sponsor as soon as administratively practicable after the Administrator is notified that there is an Excess Deferral. (b) If the Annual Deferral on behalf of a Participant for any calendar year exceeds the limitations described above as determined by the Plan Sponsor,or the Annual Deferral on behalf of a Participant for any calendar year exceeds the limitations described above when combined with other amounts deferred by the Participant under another eligible deferred compensation plan pursuant to IRC Section 457(b) then the Annual Deferral, to the extent any excess of the applicable limitation (adjusted for any income or loss in value,if any, allocable thereto), shall be distributed as soon as administratively practicable by the Administrator at the determination and direction of the Plan Sponsor. ARTICLE IV Plan Sponsor Contributions 4.01 The Plan Sponsor may contribute to the Plan for Participants. Plan Sponsor contributions shall vest at the time such contributions are made. Plan Sponsor contributions shall apply toward the maximum deferral limits in the Plan Year that such contributions are made. ARTICLE V Distribution of Benefits 5.01 Benefit Distributions at Retirement or Other Severance from Employment. A Participant may elect to commence distribution of benefits at any time after retirement or other Severance from Employment. Distributions from the Plan may not be made to a Participant earlier than: (a) the calendar year in which the Participant attains age 70 t/2;or (b) the calendar year in which the Participant retires or otherwise has a Severance from Employment. All irrevocable elections of a benefit commencement date by a Participant or a Beneficiary made prior to January 1,2002 and defaulted distributions (other than a defaulted distribution to an annuity option) may be voided at the election of the Participant or the Beneficiary. In no event may distribution of benefits commence later than the date described in Section 5.03(b) Required Beginning Date. All irrevocable elections of a Benefit Commencement Date made by Participants prior to January 1,2002 and defaulted distributions (other than a defaulted distribution A. to an annuity option) may be voided at the election of the Participant. San Bernardino PST Plan 6 June 12,2008 0 Nationwide Retirement Solutions,Inc. Exhibit A 5.02 Forms of Distribution—Benefit Payment Options. Benefits shall be paid in accordance with the payment option elected by the Participant. Payment,method of payment,and settlement options are available as provided by each of the available investment specifications. The Participant shall elect the method of payment based upon the options then available under the Plan,including but not limited to lump sum distributions,periodic payment by fined amount,periodic payment by fixed time period,partial lump sum payment or purchased annuity. A Participant or Beneficiary who has chosen a payment option,other than the purchased annuity option,shall have the ability to change his payment option subject to any restrictions or limitations imposed by the Plan, the Administrator, an investment option provider, any regulatory agency, or as otherwise required by law. 5.03 Required Minimum Distributions. All distributions under the Plan must comply with IRC Section 401(a)(9) and the regulations issued thereunder. The provisions of this Section 5.03 will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year. The term Designated Beneficiary as used in this Section 5.03 shall have the meaning set forth in Treas. Reg. 1.401(a)(9)-4. (a) Requirements of Treasury Regulations Incorporated into Plan. All distributions required under this Section 5.03 will be determined and made in accordance with the Treasury Regulations promulgated under IRC Section 401(a)(9). (b) Required Beginning Date. The Participant's entire interest will be distributed,or begin to be distributed, to the Participant no later than the Participant's required beginning date,which is to begin no later than April 1 following the calendar year in which the Participant attains age 70 1/2 or has a Severance from Employment,whichever is later. (c) Death of Participant before Distributions Begin. If the Participant dies before distributions begin, the Participant's entire interest will be distributed,or begin to be distributed,no later than as follows: (1) If the Participant's surviving Spouse is the Participant's sole Designated Beneficiary, distributions to the surviving Spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant dies,or by December 31 of the calendar year in which the Participant would have attained age 70 t/2,if later. (2) If the Participant's surviving Spouse is not the Participant's sole Designated Beneficiary, distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died. (3) If there is no Designated Beneficiary as of September 30 of the year following the year of the Participant's death,and there are no other Designated Beneficiaries,the Participant's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (4) If the Participant's surviving Spouse is the Participant's sole Designated Beneficiary and the surviving Spouse dies after the Participant but before distributions to the surviving Spouse begin, this Section 5.03 will apply as if the surviving Spouse were the Participant. (d) Required Minimum Distributions during Participant's Lifetime. During the Participant's lifetime,the minimum amount that will be distributed for each distribution calendar year is the lesser of: San Bernardino PST Plan 7 tune 12,2008 )Nationwide Retirement Solutions,Inc. Exhibit A (1) the quotient obtained by dividing the Participant's Account Balance by the distribution period in the Uniform Lifetime Table set forth in Treas. Reg. 1.401(a)(9)-9,using the Participant's age as of the Participant's birthday in the distribution calendar year; or (2) if the Participant's sole Designated Beneficiary for the distribution calendar year is the Participant's Spouse, the quotient obtained by dividing the Participant's Account Balance by the number in the Joint and Last Survivor Table set forth in Treas. Reg. 1.401(a)(9)-9,using the Participant's and Spouse's attained ages as of the Participant's and Spouse's birthdays in the distribution calendar years. (e) Death On or After Date Distributions Begin and Participant Survived by Designated Beneficiary. (1) If the Participant dies on or after the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participant's Designated Beneficiary, determined as follows: The Participant's remaining life expectancy is calculated using the age of the Participant in the year of death,reduced by one for each subsequent year. (2) If the Participant's surviving Spouse is the Participant's sole Designated Beneficiary, the remaining life expectancy of the surviving Spouse is calculated for each distribution calendar year after the year of the Participant's death using the surviving Spouse's age as of the Spouse's birthday in that year. For distribution calendar years after the year of the surviving Spouse's death, the remaining life expectancy of the surviving Spouse is calculated using the age of the surviving Spouse as of the Spouse's birthday in the calendar year of the Spouse's death,reduced by one for each subsequent calendar year. (3) If the Participant's surviving Spouse is not the Participant's sole Designated Beneficiary,the Designated Beneficiary's remaining life expectancy is calculated using the age of the Beneficiary in the year following the year of the Participant's death,reduced by one for each subsequent year. (4) No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Participant's death, the minimum amount that will be distributed,in accordance with Section 7.01 Acceptance of Beneficiary Designation by Administrator, for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the Participant's remaining life expectancy calculated using the age of the Participant in the year of death,reduced by one for each subsequent year. (f) Death before Date Distributions Begin and Participant Survived by Designated Beneficiary. If the Participant dies before the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the remaining life expectancy of the Participant's Designated Beneficiary. (1) No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Participant's death,distribution,in accordance with Section 7.01 Acceptance of Beneficiary San Bernardino PST Plan 8 June 12,2008 ©Nationwide Retirement Solutions,Inc. Exhibit A Designation by Administrator, of the Participant's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (g) Death of the Surviving Spouse before Distributions to Surviving Spouse are Required to Begin. If the Participant dies before the date distributions begin, the Participant's surviving Spouse is the Participant's sole Designated Beneficiary,and the surviving Spouse dies before distributions are required to begin, this Section 5.03 will apply as if the surviving Spouse were the Participant. (h) Election of Payment Option. If a Participant or Beneficiary fails to elect a payment option that meets the requirements of IRC Section 401(a)(9), the Administrator will initiate such a distribution. A Participant or Beneficiary who has chosen a payment option, other than an annuity option, shall have the ability to change his or her payment option. 5.04 Order of Priorities. This Section 5.04 has been prepared in accordance with Treasury Regulations promulgated under IRC Section 401(c)(9). To the extent there is a conflict between Section 5.03 Required Nfinimum Distributions,or this Section 5.04 and the IRC, the provisions of the IRC and applicable Treasury Regulations shall prevail. For any calendar year,a Beneficiary may elect distribution of a greater amount(not to exceed the amount of the remaining Account Balance in lieu of the amount calculated using the formula set forth in Section 5.01 Benefit Distributions at Retirement or Other Severance from Employment). 5.05 Death Benefit Distributions. If the Participant dies before the benefits to which he is entitled under the 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 form of distribution of such benefits, subject to the limitations set forth in the Plan. 5.06 Amount of Account Balance. Except as provided in Section 5.02 Forms of Distribution—Benefit Payment Options, the amount of any payment under this Article V shall be based on the amount of the Account Balance on the preceding Valuation Date. 5.07 Treatment in the Case of Death or Disability Resulting from Active Military Service for Benefit Accrual Purposes. Death Benefits under USERRA-Qualified Active Military Service. A Participant who dies while performing qualified military service,as defined in IRC Section 414(u), the Beneficiary(ies) of the Participant are entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service) provided under the Plan had the Participant resumed and then terminated employment on account of death. ARTICLE VI Eligible Rollovers and Plan-to-Plan Transfers 6.01 Eligible Rollover Contributions to the Plan. (a) Incoming Rollover Contributions. A Participant who is a Part-time, Seasonal and Temporary Employee and who is entitled to receive an Eligible Rollover Distribution from another Eligible Retirement Plan may request to have all or a portion of the Eligible Rollover Distribution paid to the Plan,provided, San Bernardino PST Plan 9 June 12,2008 ©Nationwide Retirement Solutions,Inc. Exhibit A (1) the Eligible Rollover Distribution is made entirely in the form of U.S. dollars,and, (2) 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). (b) Definition of Eligible Rollover Distribution. For purposes of Section 6.01(a) Incoming Rollover Contributions, an Eligible Rollover Distribution means any contribution of all or any portion of a Participant's benefit under another Eligible Retirement Plan to the Plan, except that an Eligible Rollover Distribution does not include: (1) any installment payment for a period of 10 years or more, (2) any distribution made as a result of an Unforeseeable Emergency,or (3) For any other distribution, the portion,if any,of the distribution that is a required minimum distribution under IRC Section 401(a)(9). (c) Separate Account for Eligible Rollover Contributions. The Plan shall establish and maintain for the Participant an Eligible Rollover Account for any Eligible Rollover Distribution paid to the Plan from any Eligible Retirement Plan that is not an eligible governmental plan under IRC Section 457(b). In addition,the Plan shall establish and maintain for the Participant an Eligible Rollover Account for any Eligible Rollover Distribution paid to the Plan from any Eligible Retirement Plan that is an eligible governmental plan under IRC Section 457(b). 6.02 Permissive Rollovers to an Eligible Retirement Plan. (a) Eligible Rollover Distributions to Participants and Spouse Beneficiary(ies). A Participant or the surviving Spouse Beneficiary (ies) of a Participant who is entitled to an Eligible Rollover Distribution may elect, at the time and in the manner prescribed by the Administrator, to have all the Account Balance paid directly to an Eligible Retirement Plan specified by the Participant in a direct rollover. (b) Eligible Rollover Distributions by a Non-spousal Beneficiary: For distributions made after December 311t 2006, a Beneficiary who is a non-spouse and is a"designated beneficiary" (as defined in IRC Section 401(a)(9)(e)),may elect,at the time and in the manner prescribed by the Administrator, to have a direct trustee-to-trustee transfer of a deceased Participant's account from the Plan to an individual retirement plan described in IRC Section 408(a) or (b). Such individual retirement plan must be established to receive the distribution on behalf of the designated beneficiary and treated as an inherited IRA. Distributions meeting these requirements shall be treated as an Eligible Rollover Distribution for purposes of IRC Section 402(c)(11). (c) Eligible Rollover Distributions to a Roth IRA: For distributions made after December 31, 2007,a Participant with an Eligible Rollover Distribution may elect to have the Eligible Rollover Distribution paid to a Roth IRA. Participants are solely responsible for determining whether a rollover made to a Roth IRA is an Eligible Rollover Distribution. The Plan, the Plan Sponsor, and the Administrator are not San Bernardino PST Plan 10 June 12,2008 0 Nationwide Retirement Solutions,Inc. Exhibit A responsible for making this determination, shall incur no liability whatsoever regarding Participant rollover distributions to Roth IRAs under this Section or any tax reporting or tax consequences for rollover distributions under this Section. The Administrator may take any and all necessary measures to ensure that the Plan is not jeopardized by any misrepresentations by the Participant and may develop reasonable procedures for Eligible Rollover Distributions to Roth IRAs under this Section. 6.03 Plan-to-Plan Transfers to the Plan of Eligible Governmental 457(b)Assets. (a) Permissive Plan-to-Plan Transfers. At the direction of the Plan Sponsor,the Administrator may permit a class of Participants who are Participants in another eligible governmental IRC Section 457(b) Plan to transfer assets to the Plan as provided herein. Such a transfer is permitted only if the other Plan provides for the direct transfer of each Participant's interest therein to the Plan. 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. (b) Effect of Transfers on Annual Deferral Limitations. Any such transferred amount shall not be subject to the limitations of Section 3.01 Basic Annual Limitation as an Annual Deferral, provided however, that the actual amount deferred during the calendar year under both Plans shall be taken into account in calculating the maximum Annual Deferral for that year. The amount so transferred shall be credited to the Participant's Account Balance and shall be held, accounted for,administered,and otherwise treated in the same manner as an Annual Deferral by the Participant under the Plan. (c) Required Documentation for Transfers to the Plan. The Administrator may require such documentation from the other Plan as it deems necessary to effectuate the transfer in accordance with IRC Section 457(e)(10) and Treas. Reg. 1.457-10(b) and to confirm that the other Plan is an eligible governmental plan as defined in Treas.Reg. 1.457-2(f). 6.04 Plan-to-Plan Transfers from the Plan to another Eligible Governmental 457(b) Plan. (a) Outgoing Plan-to-Plan Transfers Pursuant to Severance of Employment. At the direction of the Plan Sponsor, the Administrator may permit a class of Participants and Beneficiaries to elect to have all of their Account Balance transferred to another eligible governmental plan within the meaning of IRC Section 457(b) and Treas. Reg. 1.457-2(f). A transfer is permitted under this Section 6.04(a) for a Participant only if the Participant has had a Severance from Employment with the Plan Sponsor and is a Part-time,Seasonal and Temporary Employee of the entity that maintains the other eligible governmental 457(b) Plan. Further,a transfer is permitted under this Section 6.04(a) only if the other eligible governmental 457(b) plan provides for the acceptance of plan-to-plan transfers with respect to the Participants and Beneficiaries and for each Participant and Beneficiary to have an amount deferred under the other plan immediately after the transfer at least equal to the amount transferred. (b) Plan-to-Plan Transfers to Voluntary 457 Plan. If a Participant is no longer eligible to participate in the Plan, but elects to participate in the Plan Sponsor's voluntary Section 457 deferred compensation plan,and such other plan accepts transfers, the value of the Participant's Account Balance under the Plan may be transferred to the Plan Sponsor's voluntary Section 457 deferred compensation plan at the time and in the manner prescribed by the Administrator. (c) Limitation of Liability. Upon the transfer of assets under this Section 6.04 the Plan's liability San Bernardino PST Plan 11 June 12,2008 C Nationwide Retirement Solutions,Inc. Exhibit A to pay benefits to the Participant or Beneficiary under this Plan shall be discharged to the extent of the amount so transferred for the Participant or Beneficiary. The Administrator may require such documentation from the receiving plan as it deems appropriate or necessary to comply with this Section 6.04 (for example, to confirm that the receiving plan is an eligible governmental plan under paragraph (a) of this Section 5.04,and to assure that the transfer is permitted under the receiving plan) or to effectuate the transfer pursuant to Treas. Reg. 1.457-10(b). ARTICLE VII Designation of BENEFICIARY 7.01 Acceptance of Beneficiary Designation by Administrator. The Participant shall have the right to file with the Administrator,a signed,written beneficiary or change of beneficiary form designating the person or persons who shall receive the benefits payable under the Plan in the event of the Participant's death,provided that a married Participant may designate someone other than his/her Spouse as his/her Beneficiary only with his/her Spouse's consent.. 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. A person must survive the Participant to be his/her Beneficiary. If a Participant designates more than one person as his/her Beneficiary,unless the Participant provides otherwise, all persons of the same designation (i.e. "primary" or"contingent") shall share the Participant's Account Balance equally. If the Participant fails to designate a Beneficiary or if no designated Beneficiary survives the Participant, his/her Beneficiary shall be his/her Spouse if he is married, or,if not,his/her estate.. If the Participant dies without having a valid beneficiary form on file, the benefits will be paid to the Participant's estate or as otherwise required by applicable state law. A change in the Beneficiary designation shall take effect when the election is accepted by the Administrator,and must be on a form and in the procedural manner approved by the Administrator. 7.02 Participant Obligation to File Beneficiary Designation Form. The Participant accepts and acknowledges that he has the burden of executing and filing with the Administrator prior to the Participant's death a proper beneficiary designation form. If the Participant dies without having a valid Beneficiary form on file with the Administrator, the benefits will be paid to the Participant's estate. ARTICLE VIII Investment of Deferred Amounts 8.01 Investment Funds. The assets of the Plan and each Participant's and Beneficiary's interest herein, shall be invested and re-invested in accordance with the provisions of the Plan. The City of San Bernardino shall establish one or more investment funds for the purpose of investing Annual Deferrals credited to Participant Account Balances. The City of San Bernardino may cause funds contributed or deferred under this Plan to be commingled for investment purposes only,with funds deferred under an eligible deferred compensation plan sponsored by any other governmental authority acceptable to the City of San Bernardino (the"Other Plan") so long as the investment funds under the PST Plan and the Other Plan are substantially similar to the investment funds under this Plan and so long as adequate records are maintained to enable the identification of the portion of such funds and earning thereon that pertain to each Plan. 8.02 Designation for Investment. Deferred Compensation amounts shall be delivered by the Plan Sponsor to the Administrator for investment as designated by the Plan Sponsor in the investment San Bernardino PST Plan 12 June 12,2008 ©Nationwide Retirement Solutions,Inc. Exhibit A option selected by the Plan Sponsor. The Plan Sponsor shall be under no obligation to invest the Annual Deferrals as specified by the Participant. 8.03 Participant Account Credits and Debits. All interest,dividends, charges for premiums and administrative expenses, and changes in value due to market fluctuations applicable to each Participant's Account Balance shall be credited or debited to the account. All dividends will be reinvested in the associated investment option. ARTICLE IX Administration of Plan 9.01 Exclusive Benefit of Participants and Beneficiaries. The Plan Sponsor may at any time amend, modify or terminate the Plan under Section 12.01 Amendment and Termination,without the consent of the Participant or any Beneficiary;provided,however, that the assets of the Plan shall be held for the exclusive benefit of Participants and Beneficiaries at all times. All amendments shall become effective forty-five (45) days after the issuance of notice of the amendments by the Administrator to the Plan Sponsor. No amendments shall deprive a Participant of any of the benefits to which he is entitled under this Plan with respect to Annual Deferrals credited to his Account Balance prior to the effective date of the amendment. 9.02 No Third Party Interest in Plan. Any companies that may issue any policies, contracts, or other forms of investment media used by the Plan Sponsor or specified by the Participant,are not parties to this Plan and such companies shall have no responsibility or accountability to any Participant or Beneficiary with regard to the operation of this Plan. 9.03 Tax Consequences of Participation in Plan. The Plan Sponsor and the Administrator do not represent or guarantee that any particular federal or state income,payroll,personal property,or other tax consequence will occur because of participation in this Plan. The Participant or Beneficiary should consult with his own representative regarding all questions of federal and state income, payroll,personal property, or other tax consequences arising from participation in this Plan. 9.04 Appointment of Agents. The Administrator shall have the power to appoint agents to act for and in the administration of this Plan and to select depositories for the assets of this Plan. 9.05 Construction. This Plan shall be construed, administered, and enforced according to the Constitution,laws of the state in which the Plan Sponsor resides, and the IRC. 9.06 Total Agreement. This Plan and any properly adopted amendment or modification shall constitute the total agreement or contract between the Plan Sponsor and the Participant regarding the Plan. No oral statement regarding the Plan may be relied upon by the Participant. 9.07 Effect of Adopted Plan Amendment. This Plan and any properly adopted amendment or modification shall be binding on the parties hereto and their respective heirs,administrators, trustees, successors,and assignees and on all Participants and Beneficiaries. ARTICLE X Authority of Plan Sponsor and Administrator San Bernardino PST Plan 13 June 12,2008 ©Nationwide Retirement Solutions,Inc. Exhibit A 10.01 Authority Binding on Participants and Beneficiaries. The Plan Sponsor, the Administrator, or their respective agents shall be authorized to resolve any questions of fact necessary to decide the Participant's right under this Plan and such decision shall be binding on the Participant and Beneficiary,provided, however, that assets of the Plan shall be held for the exclusive benefit of Participants and Beneficiaries at all times. 10.02 Authority to Interpret Plan. The Plan Sponsor, the Administrator, or their respective agents shall be authorized to construe the Plan and to resolve any ambiguity in the Plan. 10.03 Investment Losses. The Participant specifically agrees not to seek recovery against the Plan Sponsor, the Administrator or any other employee, contractee, or agent of the Plan Sponsor or Administrator for any loss sustained by a Participant or a Beneficiary for the non-performance of their duties,negligence, or any other misconduct of the above-named persons, except that this paragraph shall not excuse fraud or wrongful taking by any person. 10.04 Suspension of Benefit Payments. The Plan Sponsor, the Administrator, or their respective agents, if in doubt concerning the correctness of their action in making a payment of a benefit,may suspend the payment until satisfied as to the correctness of the payment or the identity of the person to receive the payment or allow the filing in any State court of competent jurisdiction,a suit in such form as they consider appropriate for a legal determination of the benefits to be paid and the persons to receive them. The Plan Sponsor shall comply with the final orders of the court in any such suit and all Participants,Beneficiaries,and Alternate Payees consent to be bound thereby insofar as it affects the benefits payable under this Plan or the method or manner of payment. 10.05 Hold Harmless. The Plan Sponsor, the Administrator,and their respective agents are hereby held harmless from all court costs and all claims for the attorney's fees arising from any action brought by any Participant or Beneficiary under this Plan or to enforce his rights under this Plan,including any amendment,modification or termination hereof. 10.06 Litigation. The Administrator shall not be required to participate in any litigation concerning the Plan except upon written demand from the Plan Sponsor. The Administrator may compromise, adjust or effect settlement of litigation when specifically instructed to do so by the Plan Sponsor. ARTICLE XI Miscellaneous 11.01 Non-Assignability. Except as provided in Section 11.02 IRS Levy, the interests of each Participant and Beneficiary under the Plan are not subject to the claims of the Participant's or Beneficiary's creditors;and neither the Participant nor any Beneficiary shall have any right to sell,assign, transfer, or otherwise convey the right to receive any payments hereunder or any interest under the Plan, which payments and interest are expressly declared to be non-assignable and non-transferable. Furthermore,in accordance Section 522 of the Bankruptcy Abuse Protection and Consumer Protection Act of 2005 ("the Act"),retirement funds that are in a fund that is exempt from taxation under IRC Section 457 may be exempted from an individual's property estate for purposes of the Act. 11.02 IRS Levy. Notwithstanding Section 11.01 Non-Assignability, the Administrator may pay from a Participant's,Beneficiary's, or Alternate Payee's Account Balance the amount that the Administrator finds is lawfully demanded under a levy issued by the Internal Revenue Service with respect to that San Bernardino PSI'Plan 14 June 12,2008 0 Nationwide Retirement Solutions,Inc. Exhibit A Participant or Beneficiary or is sought to be collected by the United States Government under a judgment resulting from an unpaid tax assessment against the Participant or Beneficiary. 11.03 Mistaken Contributions. If any contribution (or any portion of a contribution)is made to the Plan by a good faith mistake of fact, then within one year after the payment of the contribution,and upon receipt in good order of a proper request approved by the Administrator, the amount of the mistaken contribution (adjusted for any income or loss in value,if any, allocable thereto) shall be returned directly to the Participant or, to the extent required or permitted by the Administrator, to the Plan Sponsor. ARTICLE XII Amendment and Termination 12.01 Amendment and Termination. The Plan Sponsor 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 Plan Sponsor 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 Plan Sponsor shall not have the right to reduce or affect the value of any Participant's Account Balance or any rights accrued under the Plan prior to such modification, amendment, termination, or cessation. 12.02 No Effect of Plan on Employment of Participants. Neither the establishment of the Plan nor any modification thereof,nor the establishment of an account,nor any agreement between the Plan Sponsor and the Administrator nor the payment of any benefits, shall be construed as giving to any Participant or other person any legal or equitable right against the Plan Sponsor except as herein provided, and in no event shall the terms of employment of the Part-time,Seasonal and Temporary Employee,Independent Contractor,or Participant be modified or in any way affected. 12.03 Interpretation. This Plan is intended to be an eligible deferred compensation Plan under IRC Section 457, and shall be interpreted and administered in a manner consistent with IRC Section 3121 and regulations thereunder. This Plan may be amended to the extent that it may be necessary to conform to the Plan to the requirements of IRC Sections 457 and 3121, the regulations thereunder, 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 Internal Revenue Service to be administered in a manner inconsistent with the Internal Revenue Code, the Plan Sponsor shall correct such administration. ARTICLE XIII Prior Plan If the Plan Sponsor has already accepted the PST Deferred Compensation Program and adopted an eligible deferred compensation plan,as defined by IRC Section 457 and is defined as a retirement system under IRC Section 3121 and the regulations thereunder, then the Plan Sponsor intends that this Plan shall amend and restate the Prior Plan. In such event, this Plan shall apply to all Participants in the Prior Plan on the effective date hereof,and also to each Part-time,Seasonal and Temporary Employee who elects, or is required, to participate in this Plan on and after the effective date hereof. San Bernardino PST Plan 15 June 12,2008 ©Nationwide Retirement Solutions,Inc. Exhibit A ARTICLE XIV Trustee/Custodian Provisions 14.1 Trust Requirement. All assets of the Plan,including all Compensation deferred into the Plan, property and rights purchased with such amounts,and all income attributable to such amounts, property or rights, shall (until made available to the Participant or the Participant's Beneficiary) be held for the exclusive benefit of the Participants and their Beneficiaries, as described in IRC Section 457(8). 14.2 Authority of Trustee/Custodian. The Trustee/Custodian shall manage and administer the trust or custodial account,as applicable,without distinction between principal and income, as a non- discretionary Trustee/Custodian, subject to the directions of the IRC. The Trustee or Custodian shall not have any discretion or authority with regard to the investment of the assets of the trust or custodial account,as applicable and shall act solely as a directed Trustee/Custodian of such assets in accordance with the directions of Participants and Beneficiaries as provided herein. The Trustee/Custodian shall have all powers and authority necessary to comply with such directions and with the Trustee's/Custodian's responsibilities under the Plan. 14.3 Accounting. The Trustee/Custodian shall maintain or cause to be maintained suitable records, data, and information relating to the Trustee's/Custodian's functions hereunder. Within ninety (90) days after the close of each fiscal year of the trust or custodial account,as applicable,and at more frequent intervals as agreed to by the City of San Bernardino,and within ninety (90) days after the removal or resignation of the Trustee/Custodian, the Trustee/Custodian shall render to the Employer a written statement and account showing in reasonable summary the assets and liabilities of the trust or custodial account,as applicable, and transactions engaged in during the preceding fiscal year or period. Unless the City of San Bernardino shall have filed with the Trustee/Custodian written exceptions or objections to any such statement and account within ninety (90) days after receipt thereof,the City of San Bernardino shall be deemed to have approved such statement and account; and in such case or upon written approval by the City of San Bernardino of any such statement and account, the Trustee/Custodian shall be released and discharged with respect to all matters and things embraced in such statement and account as though it had been settled by a decree of a court of competent jurisdiction in an action or proceeding in which the City of San Bernardino, all other necessary parties and all persons have a beneficial interest in the trust or custodial account were parties,except for any actions resulting from the Trustee's/Custodian's bad faith, fraud,gross negligence, or willful misconduct. Notwithstanding the foregoing provisions of the subsection, however, the Trustee/Custodian shall have the right to have a judicial settlement of the Trustee's/Custodian's account and in any proceeding for such a judicial settlement or for instructions in connection with the trust or custodial account, the only necessary party in addition to the Trustee/Custodian shall be the City of San Bernardino,and no Participant or other person having or claiming any interest in the trust or custodial account shall be entitled to any notice or service of process (except as required by law). 14.4 Resignation or Removal of Trustee/Custodian. The Trustee/Custodian acting hereunder may resign at any time by giving sixty (60) days'prior written notice to the City of San Bernardino,which notice or time period may be waived by the City of San Bernardino. The City of San Bernardino may remove the Trustee/Custodian at any time upon sixty (60) days'prior written notice to the Trustee/Custodian,which notice or time period may be waived by the Trustee/Custodian. In case of the resignation or removal of the Trustee/Custodian, the Employer shall appoint a successor Trustee/Custodian. 14.5 Standard of Care. The Trustee/Custodian shall discharge the Trustee's/Custodian's duties with San Bernardino PST Plan 16 June 12,2008 0 Nationwide Retirement Solutions,Inc. Exhibit A respect to the trust or custodial account (a) solely in the interest of, and for the exclusive purposes of providing benefits to Participants and Beneficiaries and defraying reasonable expenses of administering the Plan and (b) with the care, skill,prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with these matters would use in the conduct of an enterprise of a like character and like aims. ARTICLE XV Effective Date This Plan shall be effective as of January 1,2008. r San Bernardino PST Plan 17 June 12,2008 ©Nationwide Retirement Solutions,Inc.