Loading...
HomeMy WebLinkAbout1986-462 -1- ._--~--~-----~ ~..,. < :c (il 1 RESOLUTION NO. Rn-6n/ 2 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH GREAT WESTERN SAVINGS FOR 3 SERVICES AS ADMINISTRATOR OF THE CITY'S DEFERRED COMPENSATION PLAN. 4 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE 5 CITY OF SAN BERNARDINO AS FOLLOWS: 6 SECTION 1. The Mayor of the City of San Bernardino is 7 hereby authorized and directed to execute on behalf of said 8 City an agreement with Great Western Savings for services as 9 administrator of the City's Deferred Compensation Plan, a copy 10 of which is attached hereto, marked Exhibit "A" and 11 incorporated herein by reference as fully as though set forth 12 at length. 13 I HEREBY CERTIFY that the foregoing resolution was duly 14 adopted by the Mayor and Common Council of the City of San 15 Bernardino at a req111ar meeting thereof, held on 16 the 17th day of 17 wit: November , 1986, by the following vote, to 18 19 20 21 22 23 24 25 26 IIII AYES: Council Members Estra.da, Reillv r HernCl.ndez, Marks, Ouie1, Fraz~er, Strickler NAYS: None ABSENT: None ~A?~??~A:i'~ oity CIE~rk / I I I 27 28 -1- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The foregoing resolution is hereby approved this Ifbt day of November , 1986. 4~~-J 71) I~ Mayor of he City of San Ber ardino Approved as to form: >7 ... v/",/y /~/r?~~ City A torney -2- ~, GREAT WESTERN SAVINGS ...,. v .- DEFERRED COMPENSATION PLAN AGREEMENT This Agreement is effective this 1st day of JANUARY, 1987, by and between GREAT WESTERN SAVINGS, a Federal Savings and Loan Association, hereinafter referred to as GREAT WESTERN, and CITY OF SAN BERNARDINO, hereinafter referred to as AGENCY. WHEREAS, AGENCY, pursuant to and in compliance with Internal Revenue Code Section 457, has established a Deferred compensation Plan, hereinafter referred to as PLAN; and WHEREAS, AGENCY desires to utilize GREAT WESTERN in the performance of certain services in connection with the administration of PLAN; and WHEREAS, GREAT WESTERN desires to provide such services subject to the terms and conditions set forth herein; Now therefore, AGENCY and GREAT WESTERN agree as follows: 1. TERM: This Agreement shall remain in effect for a period of three (3) years from the effective date hereof, and shall not be terminated prior to that time except for "Cause" as that term is hereinafter defined. Thereafter this Agreement shall be automatically renewed for successive three (3) year periods unless either party gives written notice to the other, not less than ninety (90) days prior to the end of a term, of its intention not to renew the Agreement. For purposes of this Agreement, the term "Cause" shall mean the failure of either party to perform any or all of its obligations as defined herein. The non-defaulting party shall give the defaulting party written notice which shall specify the particulars of the default. If such default is not cured within sixty (60) days from the end of the month in which notice of default is given, the non-defaulting party may terminate the Agreement effective thirty (30) days after the date on which written notice of termination is given to the defaulting party. 2. TERMINATION: Upon termination of this Agreement, the following shall occur: a. GREAT WESTERN shall issue reports to AGENCY detailing the status of PLAN assets no later than twenty (20) business days after the end of the month in which termination becomes effective. b. AGENCY may request liquidation and withdrawal of PLAN assets. If termination is for Cause, GREAT WESTERN shall disburse those funds deposited in GREAT WESTERN, not subject to penalty for early withdrawal, within thirty (30) days of the effective date of termination. Funds deposited in GREAT WESTERN, subject to penalty for early withdrawal, shall be disbursed according to written instructions from AGENCY. Mutual Fund shares shall be disbursed as mutually agreed in writing by AGENCY and GREAT WESTERN. (1) ~ I ~. GREAT WESTERN SAVINGS If termination is due to non renewal of this Agreement, GREAT WESTERN shall disburse those funds deposited in Great Western Savings, not subject to penalty for early withdrawal, within ninety (90) days of the effective date of termination. Funds deposited in Great Western Savings, subject to penalty for early withdrawal, shall be disbursed, after deduction of penalty, or left on deposit until maturity, according to written instructions from AGENCY. Mutual Fund Shares shall be disbursed as mutually agreed in writing by AGENCY and GREAT WESTERN. This clause shall not serve to affect normal distributions to participants pursuant to PLAN. 3 . DEFERRALS : AGENCY agrees to: a. Cause appropriate deductions to be made from such payroll(s) as may be applicable. b. Send by check or wire transfer the amount of the total deductions to: Great Western Savings Deferred Compensation Department P.O. Box 6350 Northridge, California 91328 or to such other facility or in such other manner as may be mutually agreed upon between GREAT WESTERN and AGENCY. c. Provide, in such form as agreed upon by AGENCY and GREAT WESTERN, a deferral listing with respect to participant sub-accounts to include not less than the following: 1. Name of participant. 2. Social Security number of participant. 3. Amount to be credited to participant's sUb-account(s). GREAT WESTERN agrees to: a. Establish a sub-account for each participant. b. Credit the amounts sent by AGENCY to the sub-account(s) of the various participants, and to selected investment vehicles in accordance with the latest written instructions on file with GREAT WESTERN. c. Credit interest to funds invested in the option described herein as "GWSIA" effective the date of receipt by GREAT WESTERN. d. Place Mutual Fund orders, if applicable, within three(3) business days of receipt of deferral listing and check, in accordance with the latest written instructions on file with GREAT WESTERN. (2) ~. GREAT WESTERN SAVINGS 4. RECORDKEEPING AND REPORTS: GREAT WESTERN agrees to furnish AGENCY, no later than twenty (20) days following the end of each month and each quarter a report regarding the status of PLAN containing the following information: a. Each participant's name. b. Each participant's Social Security account number. c. Each participant's sub-account number. d. Deposits credited to each sub-account during the period. e. withdrawals from each sub-account during the period. f. Interest/Earnings credited to each sub-account during the period. g. Mutual Fund Share activity in each sub-account, and the Net Asset Value as of the report date. h. Summary totals of PLAN. GREAT WESTERN agrees to provide quarterly statements to participants in PLAN, no later than twenty (20) days following the end of each calendar quarter. Each statement shall identify the transactions which have occurred in the participant's sub-account during the preceding calendar quarter as well as the value of the sub-account at the beginning and the end of the preceding quarter. GREAT WESTERN agrees to maintain the records necessary to produce the above mentioned reports, and agrees that all records shall be the property of AGENCY and that, in the event this Agreement is terminated for any reason, GREAT WESTERN will provide AGENCY a copy of such records, in hard copy or such other form as mutually agreed upon between GREAT WESTERN and AGENCY, within ninety (90) days after the effective date of termination. AGENCY agrees that all related computer tapes, discs and programs shall remain the property of GREAT WESTERN. GREAT WESTERN agrees that all information supplied to and all work processed or completed by GREAT WESTERN shall be held to be confidential and will not be disclosed to anyone other than AGENCY except as required by law. 5. DISTRIBUTIONS: Upon receipt of written instructions from AGENCY, in such form and with such authorization as mutually agreed upon by GREAT WESTERN and AGENCY, GREAT WESTERN agrees to process the payment of benefits to participants and beneficiaries in accordance with PLAN. Distributions shall be made once a month, on the seventh (7th) calendar day before the last day of the month. If that day is a Saturday, Sunday or Holiday, distributions shall be made on the next business day. Initial distribution requests received by GREAT WESTERN, at it's headquarters in Northridge, on and after the sixteenth (16th) calendar day of a month will be processed the following month. The distribution of funds resulting from the liquidation of mutual fund shares will be made on the next distribution date which falls at least five (5) business days after the receipt of such funds by GREAT WESTERN. The above notwithstanding, GREAT WESTERN will cooperate with AGENCY to not unreasonably delay distribution requests in conjunction with "emergency withdrawals", as defined in PLAN. (3) -- ~. GREAT WESTERN SAVINGS GREAT WESTERN agrees to withhold appropriate Federal and state income taxes, according to instructions set forth on form W-4 completed by the participant, to remit such withholdings to proper taxing authorities, and to issue net funds to participant(s) or beneficiary(s) in accordance with instructions on the Distribution Request Form. GREAT WESTERN agrees to perform required monthly, quarterly and annual reporting of withholdings to appropriate taxing authorities. GREAT WESTERN agrees to issue appropriate annual wage and tax statements to those participants and beneficiaries who received distribution(s) during the preceding year and to retain a copy of such information on file for the period required by law. GREAT WESTERN agrees to provide AGENCY a monthly report of all disbursements made during the previous month. 6. INVESTMENT VEHICLES: GREAT WESTERN agrees to provide the herein described services for AGENCY with the following investment vehicles available within PLAN: a. Great Western Savings Indexed Account. (GWSIA) b. Great Western Savings Certificates of Deposit (GWCD) c. Single Premium Immediate Annuity (SPIA) (a distribution option only) d. Bond Fund of America (BFA) - a Mutual Fund e. Growth Fund of America (GFA) - a Mutual Fund f. Investment Company of America (ICA) - a Mutual Fund GREAT WESTERN may, from time to time, offer to perform the herein described services for additional and/or alternate investment vehicles upon written agreement between GREAT WESTERN and AGENCY. The investment vehicle identified as GWSIA shall be savings accounts with GREAT WESTERN. Each such account shall be subject to rules, regulations and statutes to which GREAT WESTERN is subject, as promulgated by the Federal Home Loan Bank Board (FHLBB), the Federal Savings and Loan Insurance Corporation (FSLIC) and other such regulatory authorities. GREAT WESTERN agrees to accept PLAN funds for investment in GWSIA, such funds to earn interest from the date of receipt by GREAT WESTERN at a rate to be effective on the first day of each calendar month. The rate shall be established by using whichever one of the following indices that results in the highest interest rate payable, such rate to be guaranteed for the succeeding calendar month, regardless of any subsequent change in interest rates or indices: A. The rate of interest in effect on the last business day of the calendar month for ninety (90) day market rate accounts at GREAT WESTERN. B. A rate of interest determined on the last business day of each calendar month equal to the one hundred eighty (180) day united States Government Treasury Bill discount rate, as set by the last Treasury Bill auction held before the last business day of the month, plus twenty-five (25) basis points. (4) ~. GREAT WESTERN SAVINGS C. 7.60 percent per annum. D. Such other rate, declared by GREAT WESTERN, not less than A, B, or C above. Interest will accrue daily, using the 365/360 day method, will be credited monthly, on the last day of the month, and will be automatically reinvested to allow for monthly compounding. The minimum effective annual yield will be 7.98 percent. The investment vehicle identified as GWCD shall be certificate of Deposit accounts with GREAT WESTERN. Each such certificate of Deposit shall be subject to rules, regulations and statutes to which GREAT WESTERN is subject, as promulgated by the Federal Home Loan Bank Board (FHLBB), the Federal Savings and Loan Insurance Corporation (FSLIC), and other such regulatory authorities. GREAT WESTERN agrees to accept PLAN funds for investment in GWCD(s) only in the form of transfer(s) from GWSIA accounts, as approved by AGENCY, subject to the following: a. Minimum amount of one thousand dollars($l,OOO). '- b. Minimum term of one(l) year. c. Maximum of two(2) such transfers per year per participant. d. The interest rate payable on new GWCD(s) is subject to change daily, and will only be guaranteed upon the receipt of a completed Certificate of Deposit Request Form no later than 1:00 pm, Monday thru Friday by a GREAT WESTERN Deferred Compensation Department Representative. AGENCY agrees to approve requests for transfers from GWS to GWCD(s) in a timely manner. e. A penalty equal to one hundred eighty (180) days interest will apply to early withdrawals from a GWCD in any event. GREAT WESTERN agrees to collateralize any amounts of PLAN funds invested in GWSIA and GWCD in excess of Federal Savings and Loan Insurance Corporation insurance limits per participant, with first deeds of trust on commercial, industrial or residential property. The unpaid outstanding principal balance of the collateral shall be adjusted monthly, and shall in the aggregate, at all times equal or exceed 125 percent of the amount of such funds in excess of FSLIC insurance limits. I, \j PLAN funds invested in mutual fund options will utilize Great Western Financial Securities Corporation, a wholly owned subsidiary of Great Western Financial Corporation, as the Broker/Dealer for such transactions. GREAT WESTERN will charge no administrative fees in connection with the mutual funds. Mutual fund fees and expenses are detailed in the prospectus. (5) ~. GREAT WESTERN SAVINGS Single Premium Immediate Annuities, purchased by AGENCY pursuant to PLAN, will be issued and guaranteed by John Alden Life Insurance Company, a wholly owned subsidiary of Great Western Financial Corporation. 7. ENROLLMENT SERVICES: GREAT WESTERN agrees to process the enrollment of eligible employees who elect to participate in PLAN. GREAT WESTERN agrees to provide informational and promotional material pursuant to PLAN for distribution to employees of AGENCY, subject to approval of such material by AGENCY, such approval not to be unreasonably withheld. AGENCY agrees to allow and facilitate the periodic distribution of such material to employees. GREAT WESTERN agrees to conduct group presentations periodically for employees of AGENCY, to explain PLAN. AGENCY agrees to facilitate the scheduling of such presentations and to provide facilities at which satisfactory attendance can be expected. GREAT WESTERN agrees that qualified personnel will be made available periodically to discuss PLAN with individual employees of AGENCY. GREAT WESTERN agrees to abide at all times with the rules and regulations of AGENCY and to commit no act which would unreasonably tend to degrade AGENCY or bring it into public contempt or ridicule, or prejudice the maintenance of good employer employee relationship between AGENCY and employees. 8. TITLE AND OWNERSHIP: AGENCY shall at all times be the unrestricted owner of all PLAN assets, in accordance with IRC 457 provisions. 9. PRIVITY OF CONTRACT: GREAT WESTERN shall have no privity of contract with PLAN participants. GREAT WESTERN agrees not to accept or honor instructions which may be submitted by participants without written authorization from AGENCY. 10. FEES AND EXPENSES: Except as provided herein or as may be required by law, GREAT WESTERN agrees to make no charges to AGENCY or to participants in PLAN for any services performed under this Agreement. 11. CIRCUMSTANCES EXCUSING PERFORMANCE: The performance by the parties to this Agreement is subject to force majeure and is excused by fires, power failures, strikes, acts of God, restrictions imposed by government, or delays beyond the delayed party's control. Failures of or defaults by investment vehicles other than GREAT WESTERN shall excuse performance by GREAT WESTERN thereby prevented. 12. INDEMNIFICATION: Notwithstanding any other provision herein to the contrary, GREAT WESTERN agrees to be solely responsible to AGENCY for any and all services performed by GREAT WESTERN or its employees under this Agreement. GREAT WESTERN shall be responsible for any error or negligence committed by GREAT WESTERN or its employees. AGENCY shall be responsible for any error or negligence committed by AGENCY or its employees. GREAT WESTERN shall not be liable for investment performance, except as expressly provided for in this Agreement. (6) ~. GREAT WESTERN SAVINGS 13. ASSIGNABILITY: No party to this Agreement shall assign the same without the express written consent of the other party. Unless agreed to by the parties, no such assignment shall relieve any party to this Agreement of any duties or responsibilities herein. 14. PARTIES BOUND: This Agreement and the provisions thereof shall be binding upon and shall inure to the benefit of the successors and assigns of the respective parties. 15. APPLICABLE LAW: This Agreement shall be construed in accordance with the laws operating within the state of California. 16. UNLAWFUL PROVISIONS: In the event any provision of this Agreement shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of the Agreement, but the same shall be construed and enforced as if said illegal or invalid provision had never been inserted herein. Notwithstanding anything contained herein to the contrary, no party to this Agreement will be required to perform or render any services hereunder, the performance or rendition of which would be in violation of any laws, rules or regulations relating thereto. 17. MODIFICATION: This writing is intended both as the final expression of the Agreement between the parties hereto with respect to the included terms and as a complete and exclusive statement of the terms of the Agreement, pursuant to Code of Civil Procedures Section 1856 or its successor(s). No modification of this Agreement shall be effective unless and until such modification is evidenced by a writing signed by both parties. 18. TRANSFERS: During the term of this Agreement, GREAT WESTERN will allow the transfer of funds in participant sub accounts to/from other investment vehicles provided under PLAN which are in effect on the effective date of this Agreement. GREAT WESTERN will allow the transfer of PLAN funds to/from investment vehicles added under PLAN subsequent to the effective date of this Agreement only upon express written agreement between AGENCY, GREAT WESTERN and such other investment vehicles.Funds will be transferred from GREAT WESTERN to other investment vehicles, as defined above, within ten (10) business days of receipt by GREAT WESTERN at its Headquarters in Northridge, California, of written authorization by AGENCY. Transfers which involve the liquidation of mutual fund shares, will be made within five (5) business days following the receipt of the proceeds from the sale of said mutual fund shares by GREAT WESTERN. Transfers from GREAT WESTERN to other investment vehicles will be in the form of a check payable to the other investment vehicle, sent by regular U.S.mail. Authorized requests for wire transfers will be processed without unreasonable delay, subject to a wire transfer fee as determined by GREAT WESTERN, but not less than fifteen dollars ($15.00) per transfer. Funds transferred to GREAT WESTERN from other investment vehicles will be in the form of a check accompanied by the information specified in Section 3(c) of this Agreement. Such funds received will be credited in accordance with the terms of this Agreement. (7) ~. GREAT WESTERN SAVINGS .RENEWAl 19. NOTICES: All notices and demands to be given under this Agreement by one party to another shall be given by certified mail, addressed to the party to be notified or upon whom a demand is being made, at the respective addresses set forth in this Agreement or such other place as either party may, from time to time, designate in writing to the other party. Notice shall be deemed to be effective on the third business day following the date of mailing. If to GREAT WESTERN: GREAT WESTERN SAVINGS Deferred Compensation Department P. o. Box 6350 Northridge, California 91328 If to AGENCY: CITY OF SAN BERNARDINO 300 North D Street San Bernardino, CA 92418 ATTN: Director of Finance IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective on the date first above written. BERNARDINO GREAT WESTERN Mayor BY:~~ Edwin C. Brunton Vice President Great Western Savings Approved as to form: ~mO~ City ~ttorney (8) -I ~. GREAT WESTERN SAVINGS A Federal Savings and Loan Association 350 20th Street · Oakland. California 94612 DEFERRED COMPENSATION DEPARTMENT September 23, 1986 Shauna Clark City Clerk City of San Bernardino 300 North "D" Street San Bernardino, CA 92418 Dear Ms Clark: As you are aware, the past year has seen a significant drop in interest rates both to borrowers and savers, throughout the entire economy. Great Western Savings is committed to providing a competitive Deferred Compensation Program, while maintaining adequate operating margins. Accordingly, and pursuant to Paragraphs One (1) and Eighteen (18) of the Deferred Compensation Plan Agreement between the City of San Bernardino and Great Western Savings, dated December 27, 1983, this letter will constitute the required ninety (90) days notice of our intention to modify the Agreement after December 27, 1986. Enclosed are two (2) copies of the new Deferred Compensation Plan Agreement for your review. The only significant change is in the minimum floor interest rate which is now 7.60% compounded monthly for an effective annual yield of 7.98%. This rate is highly competitive in today's economic environment. The proposed Agreement is valid and subject to acceptance until December 27, 1986. We will review our floor rate again on October 1, 1986, and if it is lowered, you will be guaranteed 7.60%. If it is raised, you will automatically get the higher rate in effect on December 27, 1986. A SAVINGS ASSOCIATION OF GREAT WESTERN FINANCIAL CORPORATION ~\ MO"" ~,.... ~nD~ ~III) ,~ .k ~1~' '_SnIR,II"'WMIIII.lIDIl Page 2, 09/23/86, Clark Gail Dixon, Vice President and Regional Manager of Deferred Compensation Programs will be in touch with you within a few days to answer any questions you may have. We look forward to continuing to serve the City of San Bernardino, and thank you for your consideration. \Oce~e~ ~ Brunton, ~c:-::eSident Deferred Compensation Programs ECB/ja encs. cc: Gail Dixon Troy Mining I GREAT WESTERN AGREEMENTS f- Interest rates: (I ( -' . t (a) Ninety-day money market rate, compounded monthly (b) Rate of 26 week savings accounts indexed to TBill rate (c) 10% per annum, com- pounded monthly = 10.62% effective Old ( 7 ) New (5 ) (a) same (b) same but indexed to TBill plus 25 basis points (c) 7.60 percent per annum accrued daily - 7.98 effective Term: Three years extendable for both Termination Non renewal: Old (I) Automatic renewal. Agreement has expira- tion date which results in te~ination by non- renewal. Non-renewal requires 90 days notice prior to expiration of agreement. New (I ) Same For Cause: Defined as failure to perform any obligation under agreement Notice Required Old (2 ) Written notice. 60 days to cure default. 30 day notice of termination New (I) Same Result of Termination Old ("1' ) No new accounts shall be established. Great Western issues account status reports within ten days after end of month when termination has occurred. Great Western forwards all funds within 30 days of termination. If ter- mination for any other reason than cause (for example, non renewal) GW has over one year to complete disburse funds - 2 - Result of Termination (Cont) New':? No requirement on new accounts. Twenty days to issue account status reports. If termina- tion for non-renewal GW shall disburse within 90 days of effective date of termination. No provision for termination because of default of City. Deferrals City Responsibilities Old New (Z) Silent Puts in writing what the City's responsibili- ties are. In old agreement, we were only concerned with what we wanted GW to do. GW'S Responsibilities: Old (4) Very vague. Withhold appropriate funds. Perform necessary services NevI (2) More specific. (This clause is much better from our position if we need to specify cause for ter- mination) Record Keeping and Reports "3 j Same in both agreements except that in new agreement GW has 20 days following end of each month and quarter to provide reports. Old agreement has no report time frame In event of termination Old Records supplied within 30 days New ;;l . J.l Records supplied within 90 days Distributions . \ Old '_~- ) Very vague. GW makes distributions and prepares tax statements in accordance with law, provides city with copies of information. Silent on time frames. New (3 ) Ties down distribution time frames: Distribu- tion once per month on 7th day before last day of month. Gives other distribution rates. Gives more specific instructions on legal statements and states what Great Western will do in accordance with tax laws. Using this section will benefit us. ~--- - 3 - Investment Vehicles Great Western Savings Investment Company of America Growth Fund of America Bond Fund of America Single Premium Immediate Annuity (distribution option only) Great Western Savings CD Great Western Savings Indexed Account Old (6) Both (4) Both II Both II New (4) New II New II Major investment vehicle in old agreement was a savings account. New one has savings account with different name: Savings Indexed Account.