HomeMy WebLinkAbout15- Human Resources ORIGINAL
CITY OF SAN BERNARDINO —REQUEST FOR COUNCIL ACTION
From: Linn Livingston, Director Subject: ADOPT RESOLUTION WITH
of Human Resources NATIONWIDE RETIREMENT
SOLUTIONS TO PROVIDE A POST-
Dept: Human Resources EMPLOYMENT HEALTH PLAN
(PEHP) FOR EMPLOYEES.
Date: November 3, 2009
M/CC Meeting Date: Nov. 16, 2009
Synopsis of Previous Council Action:
Approved by Mayor and Common Council to implement a Post Employment Health
Plan:
Management/Confidential: Resolution No. 2007-345 August 22, 2007
Fire Safety Management: Resolution No. 2009-71 April 6, 2009
Fire Safety: Resolution No. 2009-140 June 3, 2009
Middle-Management: Resolution No. 2005-16 January 24, 2005
Police Safety: Resolution No. 2003-253 September 4, 2003
Recommended Motion:
1. Adopt Resolution.
2. Authorize the Human Resources Director as the plan administrator.
Signature
Contact person: Linn Livingston Phone: x5161
Supporting data attached: Ward:
FUNDING REQUIREMENTS:
Amount: No cost toyhe City
Source: (Acct�No.)
(Acct. Description)
Finance:
Council Notes: A Q
Agenda Item No.
11-((e-0q
AUP/4" ut-f pass
• L
CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION
Staff Report
Subiect•
Authorize an agreement with Nationwide Retirement Solutions to provide a Post-Employment Health
Plan(PEHP).
Background:
The Post-Employment Health Plan (PEHP) for Public Employees was established for the exclusive
benefit of public employees who have separated from service. The PEHP plan is a method of providing a
tax-exempt reimbursement for qualified post-employment expenses for medical care/premiums (see
attached exhibit A). The plan allows for a percentage, which is determined on an annual basis, of an
employee's payoff of accrued leave balances to be transferred into a tax-exempt PEHP Plan under Section
501(c) (9) of the Internal Revenue Code of 1986. Plan assets remain tax-exempt under the IRS
regulation.
The Human Resources Department met and conferred with the bargaining groups and the Mayor and
Common Council approved the establishment of a PEHP Plan for the following groups:
Management/Confidential (August 22, 2007), Fire Safety Management (April 6, 2009), Fire Safety (June
3, 2009), Police Safety (September 4, 2003), and Middle-Management (January 24, 2005). At this time
only the Fire Safety and Fire Management groups have requested to participate in a PEHP program.
The Human Resources Department reviewed several vendors and is recommending Nationwide
Retirement Solutions (NRS), our current deferred compensation provider, to manage the plan. The PEHP
plan offered by NRS has been approved by the Internal Revenue Service (IRS) and NRS is currently
providing plans for many public agencies.
Financial Impact:
There will be no cost to the City. All fees will be paid by the participant (employee). Participants will be
subject to an annual fee of$30 plus %2 percent of contributions.
Recommendation:
1. Adopt Resolution.
2. Authorize the Human Resources Director as the plan administrator.
COPY
1 Resolution No
2 RESOLUTION OF MAYOR AND COMMON COUNCIL OF THE CITY OF SA
BERNARDINO TO ADOPT THE POST EMPLOYMENT HEALTH PLAN (PEHP) FO
3 PUBLIC EMPLOYEES FOR THE EMPLOYEES OF THE CITY OF SA
4 BERNARDINO.
5
WHEREAS, a Post Employment Health Plan for Public Employees has been established
6 for eligible public employees, pursuant to section 501(c) (9) of the Internal Revenue Cod
7 permitting such plans; and
8
9 WHEREAS, the City of San Bernardino (Employer) wishes to make contributions, o
behalf of its eligible employees, in a manner permitted under the Plan to meet its employees,
10 i
post employment health care needs and expenses; and
I1
12 WHEREAS, under the PEHP program, Nationwide Retirement Solutions (NRS), Inc.
13 will provide administrative services in exchange for a fee as agreed upon by the Employer an
NRS.
14
15 NOW, THEREFORE, BE IT RESOLVED that the Mayor and Common Council of the
16 Employer, meeting in regularly scheduled session, this 16'' day of November, 2009, hereby
17 adopts this PEHP program on behalf of the eligible employees of the Employer. The Human
Resources Director is hereby authorized to execute, on behalf of the eligible employees of the
18
Employer, a participation agreement with NRS, authorizing NRS to act as the Administrator o
19 the Plan and the agent of the Employer, and other such agreements and contracts as are necessary
20 to implement the program.
21
22
23
24
25 ///
I RESOLUTION OF MAYOR AND COMMON COUNCIL OF THE CITY OF SA
BERNARDINO TO ADOPT THE POST EMPLOYMENT HEALTH PLAN FOR
2 PUBLIC EMPLOYEES (PEHP) FOR THE EMPLOYEES OF THE CITY OF SA
3 BERNARDINO.
4
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor an
5
the Common Council of the City of San Bernardino at a meeting thereof, held
6
7 on day of , 2009, by the following vote, to wit:
8
COUNCILMEMBERS: AYES NAYES ABSTAIN ABSENT
9 ESTRADA
10 ,BAXTER
I j
11 BRINKER
SHORETT
12
KELLEY
13 JOHNSON
14 MCCAMMACK
15
16
Rachel G. Clark, City Clerk
17
18 The foregoing resolution is hereby approved this day of
19 , 2009.
20
Patrick J. Morris, Mayor
21 City of San Bernardino
22 Approved as to form:
23
JAMES F. P NMAN,
24 City Attorn
25
By:
HR/Agenda Items:Reso.PEHP
EXHIBIT A
THE POST EMPLOYMENT HEALTH PLAN
FOR PUBLIC EMPLOYEES - 3
Copyright 2003, 1996
Nationwide Retirement Solutions
All Rights Reserved
(plcanvaz.doc)
THE POST EMPLOYMENT
HEALTH PLAN FOR PUBLIC EMPLOYEES 3
TABLE OF CONTENTS
ARTICLE I
NAME AND EFFECTIVE DATE
1 .1 Name 6
1 .2 Effective Date 6
ARTICLE II
DEFINITIONS
2.1 Account 7
2.2 Administrator 7
tom— .'_�:_y^
G.t.! AJJ oc i�.l l i,
2.4 Benefit 7
2.5 Code 7
2.6 Contribution 7
2.7 Corporation 7
2.8 Dependent 7
2.9 Effective Date 7
2.10 Eligible Employee 7
2.11 Employee 8
2.12 Employer 8
2.13 Employer Contribution 8
2.14 Entry Date 8
2.15 Health Care Insurance Premium 8
2.16 Health Care Insurance Premium Sub-account 8
2.17 Participant 8
2.18 Participation Agreement 8
2.19 Plan 8
2.20 Plan Year 9
2.21 Post-Retirement Health Benefit 9
2.22 Qualifying Medical Care Expenses 9
2.23 Qualifying Medical Care Expenses Sub-account 9
2.24 Trust Agreement 9
2.25 Trust Fund 9
2.26 Trustee 9
2
2.27 Valuation Date 10
ARTICLE III
TRUST
3.1 Trust Agreement 11
3.2 Trust Fund 11
3.3 Investment of Trust Fund 11
3.4 Valuation of Trust Fund 11
ARTICLE IV
ELIGIBILITY TO PARTICIPATE
4. i Eligibiii t y To Participate i 3
4.2 Ceasing to Be an Eligible Employee 13
4.3 Dispute as to Eligibility 13
ARTICLE V
CONTRIBUTIONS
5.1 Employer Contributions 14
5.2 Determination of Amount of Contributions 15
ARTICLE VI
BENEFITS
6.1 Post-Employment Health Benefits 16
6.2 Notice by Employer 16
6.3 Benefit Limits 16
6.4 Timing and Method of Benefit Payment 16
6.5 Prohibition on Alienation 17
6.6 Forfeitures 17
ARTICLE VII
ACCOUNTS
3
7.1 Separate Accounts and Records 18
7.2 Valuation of Accounts 18
ARTICLE VIII
CLAIMS PROCEDURE
8.1 Written Claims 19
8.2 Denied Claims 19
8.3 Review Procedure for Denied Claims 19
ARTICLE IX
ADMINISTRATION OF THE PLAN
9.1 The Administrator 20
r, - �n
7.L %\Utf
9.3 Removal or Resignation 20
9.4 Successor Administrator 21
9.5 Administrative Fees 22
9.6 Powers of the Administrator 22
9.7 Records 22
9.8 Defect or Omission 23
9.9 Liability of Administrator 23
9.10 Funding Policy 23
ARTICLE X
AMENDMENT AND TERMINATION
10.1 Termination of the Plan 24
10.2 Termination and Discontinuance of Contributions 24
4
ARTICLE XI
MISCELLANEOUS
11.1 Rights of All Interested Parties Determined by Terms of 25
the Plan
11.2 No Employment Rights Created 25
11.3 Number and Gender 25
11.4 Notice to Employees 25
11.5 Notification of Address 25
11.6 Withdrawal of Employer 26
11 .7 Headings 26
2
1 i g Governing Law 6
S
THE POST EMPLOYMENT
HEALTH PLAN FOR PUBLIC EMPLOYEES - 3
ARTICLE I
NAME: EFFECTIVE DATE
1 .1 Name. This plan shall be known as The Post Employment Health Plan for
Public Employees - 3.
1 .2 Effective Date. The Plan shall be effective as of January 17, 1997.
6
ARTICLE II
DEFINITIONS
As used in this Plan, and except as otherwise provided herein, the following
terms shall have the meaning hereinafter set forth:
2.1 "Account" shall mean an account established for a Participant
pursuant to Section 7.1 hereof.
2.2 "Administrator" shall mean the person or entity possessing authority to
control and manage the operation and administration of the Plan. The
Administrator shall be the Corporation unless and until the Corporation resigns or is
removed by the Advisory Committee representatives (as defined in the Trust
Agreement) and Employers in accordance with Article IX.
2.3 Association shall mean each group of employees of government
Employers in California, Nevada, and Arizona, who by their employment related
common bond are covered under the Plan and their Advisory Committee
representatives (as defined in the Trust Agreement).
2.4 "Benefit" shall mean any payment made pursuant to Article VI hereof.
2.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.6 "Contribution" shall mean any contribution made to the Plan
pursuant to Article V hereof.
2.7 "Corporation" shall mean Nationwide Retirement Solutions, its
successors and assigns.
2.8 "Dependent" shall mean any person who, in relation to the
Participant, satisfies the requirements under Code Section 152(a).
2.9 "Effective Date" shall mean January 17, 1997.
2.10 "Eligible Employee" shall mean an Employee who is eligible to
participate in the Plan pursuant to the Employer's Participation Agreement.
7
2.11 "Employee" shall mean an individual who is employed by the
Employer and is not included in a unit of employees covered by a collective
bargaining agreement between employee representatives and one or more
employers.
2.12 Employer shall mean a state or local government or political
subdivision thereof in California, Nevada, or Arizona, that adopts the Plan by
entering into a Participation Agreement with the Administrator. As the context
requires, the term "the Employer" as used herein shall apply collectively to all
entities that are Employers under the Plan or singly to an Employer.
2.13 "Employer Contribution" shall mean a contribution made pursuant to
Section 5.1 hereof.
_ Fn
Iry D j�1 shall. �_ mean i iG 11 1 uuv of month ioi iii i iii ii ie i aieil ar
year.
2.15 "Health Care Insurance Premium" shall mean any amount used to
purchase insurance coverage for health benefits, hospitalization, or other medical
care as defined in Code Section 213(d)(1).
116 "Health Care Insurance Premium Sub-account" shall mean a
sub-account consisting of all Employer contributions designated to fund future
Health Care Insurance Premium Reimbursements.
2.17 "Participant" shall mean an Employee or former Employee, or the
surviving Dependents thereof, who has an Account under the Plan.
2.18 "Participation Agreement" shall mean the agreement between the
Employer and the Administrator by which the Employer adopts the Plan, and
which sets forth the terms of the Employer's adoption of the Plan, including: (a) the
Employer's rate of contribution to the Plan, and (b) the class of Employees of the
Employer who are eligible to participate in the Plan.
2.19 "Plan" shall mean The Post Employment Health Plan for Public
Employees - 3, as set forth in this document.
2.20 "Plan Year" shall mean the calendar year.
8
2.21 "Post-Employment Health Benefit" shall mean a payment made
pursuant to Section 6.1 hereof.
2.22 "Qualifying Medical Care Expenses" shall mean those expenses
incurred solely for "medical care," as defined in Code Section 213(d)(1), rendered
to the Participant or his Dependents. Examples of Qualifying Medical Care
Expenses include, but are not limited to, the following:
(a) Deductible and co-payments for medical care under any
accident and health insurance plan of the Participant or Dependents;
(b) Dental care, including routine dental checkups, orthodontia,
and dentures,
(c) Eye care, including examinations, glasses, and contact lenses;
(d) Hearing care, including examinations and hearing aids;
iG' R!� t I I ,rirrvi �vr-mirrTin "I
outine plly Jllr X11 VnVI���� ,v��v� �
(f) Prescription drugs;
(g) Any other medical care item which is approved by the
Administrator and which is consistent with the definition of "medical care" within
the meaning of Code Section 213(d)(1); and
(h) Health Care Insurance Premiums..
2.23 "Qualifying Medical Care Expense Sub-account" shall mean a
sub-account consisting of all Employer contributions designated to fund future
Qualifying Medical Care Expense reimbursements.
2.24 "Trust Agreement" shall mean the agreement described in Article III
hereof, establishing the Trust for the Post Employment Health Plan for Public
Employees- 3.
2.25 "Trust Fund" shall mean the Trust for the Post Employment Health Plan
for Public Employees - 3 and its assets and investments held at any one time by the
Trustee.
2.26 "Trustee" shall mean the Trustee or any successor Trustee designated
in accordance with the terms of the Trust Agreement.
2.27 "Valuation Date shall mean each day in which the New York Stock
Exchange and the Corporation's home office are open for business.
9
10
ARTICLE III
TRUST
3.1 Trust Agreement. All Contributions shall be paid into, and all Benefits
provided for herein shall be paid from, the Trust Fund. The Trust Agreement shall be
in such form and contain such provisions as the parties may deem appropriate,
including, but not limited to, provisions with respect to the powers and authority of
the Trustee, the authority of the Administrator and Trustee to amend the Trust
Agreement, the authority of the Administrator to settle the accounts of the Trustee
on behalf of all persons having an interest in the Trust Fund, and the authority of the
Administrator, subject to the approval of the Employer Advisory Committee
representatives employing a majority of Participants and Employee Advisory
Committee representatives representing a majority of the Participants then
participating in the Plan, to remove a Trustee and appoint a successor trustee.
\R lL.s. 1 I into. .. Tr. 1 Ai-.r m-rat rl-��II form a part -of the Plon, and all rights
9Y! irn ee !G!ed ii IV. II e Iiu51 nyleeI111.11 II al 1L Ii foi,i I :a
and benefits that may accrue to any person under the Plan shall be subject to all
the terms and provisions of the Trust Agreement.
3.2 Trust Fund. In no event shall any part of the principal or income of the
Trust Fund be paid to or reinvested in the Employer, or be used for any purpose
whatsoever other than the exclusive benefit of the Participants and their
Dependents and defraying the reasonable expenses of the Plan. Notwithstanding
the preceding, Contributions shall be returned to the Employer only under the
following circumstances:
(a) If a Contribution is made by the Employer by a mistake of fact;
(b) If the Internal Revenue Service determines that the Trust is not
tax-exempt under Code Section 501 (a); or
(c) If the Internal Revenue Service determines that the Trust has
unrelated business taxable income under Code Section 512(a)(3)(E).
3.3 investment of Trust Fund. The Trustee shall invest and reinvest the Trust
Fund and the income therefrom in accordance with the terms of the Trust
Agreement.
3.4 Valuation of the Trust Fund. The value of the Trust Fund shall be
determined as of each Valuation Date, as follows:
(a) The value per share of a security listed for trading on a national
securities exchange shall be the closing price per share at which such security was
11
traded on the exchange on the day as of which the value is to be determined (or,
if such security was not traded on that day, on the last preceding day on which it
was traded); provided, that if a security is listed for trading on two or more national
securities exchanges, the national securities exchange upon which principally it is
traded shall be deemed to be the only such exchange on which it is listed;
(b) The value per share of a security regularly traded in the
over-the-counter market shall be the mean between the highest price bid and the
lowest price asked per share of that security on a day as of which the value is to
be determined (or, if no quoted bid and asked prices are available for that day,
on the last preceding day for which quoted bid and asked prices are available);
(c) The unit value of any underlying option available under a variable
annuity will be calculated as of the close of the New York Stock Exchange on the
Valuation Date;
(d) The value of any other investment shall be the fair market value
thereof on the day as of which the value is to be determined, as determined by
the Trustee; and
(e) There shall be added/deducted from the value of the
investments any income or liabilities due or accrued properly chargeable thereto.
12
ARTICLE IV
ELIGIBILITY TO PARTICIPATE
4.1 Eligibility To Participate, Each Employee shall become a Participant on
the Entry Date coincident with or next following the later of (a) the date on which
he becomes an Eligible Employee, or (b) the effective date of the Employer's
Participation Agreement.
4.2 Ceasing to Be an Eligible Employee. A Participant who ceases to be
an Eligible Employee shall remain a Participant, but shall have no Employer
Contributions made on his behalf. The Employer shall resume making Contributions
on behalf of such Participant commencing on the Entry Date coincident with or
next following the first date thereafter that he again becomes an Eligible
Employee.
4.3 Dispute as to Eligibility. In the event of a dispute as to the eligibility of
any individual to participate in the Plan, the decision of the Administrator to such
eligibility shall be final and conclusive for all purposes.
13
ARTICLE V
CONTRIBUTIONS
5.1 Employer Contributions. The Employer shall contribute to the Plan on a
periodic basis on behalf of each Eligible Employee who is a Participant during such
period an amount specified in the Employer's Participation Agreement to the
appropriate sub-account to fund Post Retirement Health Benefits. Amounts
contributed shall be segregated to either one or both of the following
sub-accounts for (i) reimbursement of the Qualifying Medical Care Expenses not
paid by insurance (Qualifying Medical Care Expense Sub-accounts) or (ii)
reimbursement of Health Care Insurance Premiums (the Health Care Insurance
Premium Sub-accounts). Amounts in each sub-account may not be used for any
purpose other than provided by Code sections 105 and 106. Amounts used to
reimburse Health Care Insurance Premiums may be paid from the Qualifying
Medical Care Expense Sub-account on!\i if all amounts in the Health Care
Insurance Premium Sub-account are exhausted at the time the Employee submits
the request for reimbursement.
Contributions may not vary among Eligible Employees to fund the
Qualifying Medical Care Expense Sub-account and will be made as an equal
dollar amount for each Eligible Employee. The annual minimum Contribution for
each Eligible Employee is $120. This minimum does not include Employer
contributions from accumulated compensated absences such as sick leave or
vacation. All Contributions shall be made in a manner which satisfies the
nondiscrimination rules found in Code sections 505(b) and 105(h) or other
applicable law.
Contributions to fund Health Care Insurance Premium Sub-accounts
may be made as an equal dollar amount or as a percent of salary but such
percent or dollar amount must apply to all Eligible Employees. If the Employer
funds the Health Care Insurance Premium Sub-account on a percentage of salary
basis, the minimum percentage of salary basis is 1/2 of 1% of each Eligible
Employee's annual salary.
An Employer who has a compensated absence policy under which
all Employees accumulate compensated absence pay may require all or a
specified portion of accumulated compensated absence benefits be
contributed to the Qualifying Medical Care Expense Sub-account in an dollar
amount for each Eligible Employee. Compensated absence contributions will be
made to the Health Care Insurance Premium Sub-account on the same
percentage basis for each Eligible Employee.
14
5.2 Determination of Amount of Contributions. The Trustee shall not be
under any duty to inquire into the correctness of the Contributions paid over to the
Trustee hereunder; nor shall the Trustee or Administrator be under any duty to
enforce the payment of the Contributions to be made hereunder. The Eligible
Employees and Association representatives shall have sole responsibility and duty
to enforce Employers' contribution obligations.
is
ARTICLE VI
BENEFITS
6.1 Post-Employment Health Benefits. Upon a Participant's separation
from service with the Employer for any reason, the Participant, or in the event of a
deceased Participant, his Dependents, shall be entitled to be reimbursed from the
Participant's Qualifying Medical Care Sub-account for Qualifying Medical Care
Expenses incurred by the Participant and his Dependents and from the
Participant's Health Care Insurance Premium Sub-account for Health Care
Insurance Premiums incurred by the Participant, subject to the limits set forth in
Section 6.3 hereof, provided that such Qualifying Medical Care Expenses will not
be taken as a deduction on the Participant's or Dependents' federal income tax
return. Post-Employment Health Benefits shall be funded solely by Employer
Contributions made in accordance with Article V hereof into each respective
V p
sub-account from which bei nf'fs ill rrirl
6.2 Notice by Employer.The Employer shall certify to the Administrator the
date of a Participant's separation of service from the Employer. The Administrator
shall rely on any such certification in determining the extent to which a Participant
or his Dependents shall be entitled to a Benefit under the Plan. In the case of a
Participant's death, the Trustee shall require proof of the Participant's death prior to
paying any Benefit to a Dependent under this Article VI.
6.3 Benefit Limits. Any Qualifying Medical Care Expense or Health Care
Insurance Premium paid in accordance with Section 6.1 hereof is limited to the
Participant's respective sub-account balance as of the Valuation Date
immediately preceding the date the claim for such Benefit is submitted to the
Trustee. If a claim for Benefits exceeds the sub-account balance at such date, the
Trustee will pay the claim to the extent of the Account balance. If future amounts
are credited to the Participant's Account, the Participant must submit a current
claim form for reimbursement.
Only claims for Qualifying Medical Care Expenses and Health Care
Insurance Premium Reimbursements will be payable under the Plan.
6.4 Timing and Method of Benefit Payment. All Benefit payments shall be
made in cash as soon as administratively practicable following the date a claim
for Benefits is submitted to the Administrator.
6.5 Prohibition on Alienation. The rights of a Participant or Dependent to
16
receive a Benefit shall not be subject to alienation or assignment, and shall not be
subject to anticipation, encumbrance or claims of creditors except to the extent
required by applicable law.
6.6 Forfeitures. If a Participant has no Dependents on the date of his
death, he will forfeit the balance in his Account.
Benefit payments for Qualifying Medical Care Expenses which, if paid,
would result in discrimination in violation of Code section 105(h), its regulations or
any other applicable provision of law shall also be forfeited. A Participant's account
may also be forfeited if the Administrator is unable to locate the Participant within
36 months after the Administrator sends a letter by certified U. S. mail, postage
prepaid, to the Participant's last known address.
Any amount forfeited under this Section 6.6 shall be allocated on the
Valuation Date coincident with, or immediately following, the date on which the
Administrator determines that a forfeiture hcas occurred to the Accounts of all other
Participants who (i) are (or were) employed by the forfeiting Participant's Employer
and (ii) have an account balance on the Valuation Date. Forfeitures shall be
allocated among the Participants in accordance with procedures established by
the Administrator from time to time.
17
ARTICLE VII
ACCOUNTS
7.1 Separate Accounts and Records. The Administrator shall maintain
separate sub-accounts in the name of each Participant having an interest in the
Trust Fund. A statement of a Participant's sub-accounts) as of the last day of each
calendar quarter and such other dates as the Trustee may determine in its
discretion, shall be distributed to him within a reasonable time after such date
showing:
(a) the sub-account balance(s);
(b) Employer Contributions credited to the Participant's
sub-account(s);
(c) gains and losses of the Trust Fund allocated to the Participant's
sub-account(s);
(d) Qualifying Medical Care Expenses and Health Care Insurance
rrCl I Illjl I IJ aid 111111 the Participant's It'$ $ub-a ^^'1''+lc1• nr�rJ
rt•cip ccoolJI 11 tJ), \.1 IV
(e) administrative fees paid from the Participant's sub-account(s).
7.2 Valuation of Sub-Accounts. As of each Valuation Date, all income and
gains (realized and unrealized) of the Trust Fund for the period since the next
preceding Valuation Date (or, if there is no prior Valuation Date, since the Effective
Date) shall be credited to, and all losses (realized and unrealized) and expenses of
the Trust Fund for such period shall be charged to, the Participants' sub-accounts in
proportion to their balances as of the next preceding Valuation Date (or as of the
Effective Date, if there is no prior Valuation Date), provided, however, that if there
has been a withdrawal from a Participant's account since the next preceding
Valuation Date, such Participant's Account balance at the Valuation Date, rather
than the next preceding Valuation Date, shall be used to allocate income, gains,
losses and expenses to such Participant's sub-accounts.
18
ARTICLE VIII
CLAIMS PROCEDURE
8.1 Written Claims. All claims for Benefits shall be made in writing in
accordance with such procedures as the Administrator shall prescribe, including
deadlines, documentation requirements and forms.
8.2 Denied Claims. If a claim for Benefits is denied in whole or in part, the
Administrator shall furnish the claimant a written notice setting forth the reason for
the denial, including reference to pertinent Plan provisions, describing any
additional material or information that is required from the claimant and explaining
why it is required, and explaining the review procedure set forth in Section 8.3
hereof. Such notice shall be given within five (5) business days of the date of
denial.
8.3 Review Procedure for Denied Claims. Within 60 days of the denial of
any claim for Benefits, a claimant may file a written request for a review of such
denial by the Administrator. Any claimant seeking review of a denied claim is
entitled to examine all pertinent documents and to submit comments in writing.
Within 60 days after its receipt of a request for review of a denied claim, the
Administrator shall render a written decision on its review which references the Plan
provisions on which its decision is based.
19
ARTICLE IX
ADMINISTRATION OF THE PLAN
9.1 The Administrator. The Administrator shall be the Corporation unless
and until the Corporation resigns or is removed by the Advisory Committee (as
defined in the Trust Agreement) representatives in accordance with Section 9.3
below. The Trustee shall administer the Plan in accordance with its terms. The
Administrator shall have the authority to control and manage the operation and
administration of the Plan and the responsibility of filing and distributing reports and
returns with or to government agencies and Participants, and their Dependents
as required under the Code and other applicable law.
The Administrator, by a written instrument, may delegate its
r?S!-( i1CiE�ijlitie5 to control and manage the operation tii f 'h Plan r-• •°• _� CylJ..Jf I V! !t!C f lan and 1 the
responsibility to file reports and returns. If the Administrator has made such a
delegation, the Administrator shall not be liable for any act or omission by the
person to whom such responsibility is delegated.
To the extent permitted by law, the Trust shall indemnify each
employee of the Administrator and any agent or person who has been appointed
by the Administrator, against any liability (not reimbursed by insurance) incurred in
the course of the administration of the Plan, except liability arising from his own
negligence, willful misconduct or breach of fiduciary duty.
9.2 Agents. The Trustee may employ such agents, including counsel, as it
may deem advisable for the administration of the Plan. Such agents may not be
Participants. The fees of such agents shall be charged to the Participants'
Accounts in accordance with Section 7.2 hereof.
9.3 Removal or Resignation. The Administrator may resign as Administrator
at any time by a written instrument delivered to all Advisory Committee
representatives giving notice of such resignation. The Administrator may be
removed, for cause relating to performance that fails to meet generally accepted
standards, practices and procedures applicable to persons providing similar types
of administrative services, by the Employers employing and Associations
representing a majority of the Participants then participating in the Plan by a
written notice delivered to the Administrator. In the event of a dispute over the
execution of the duties of the Administrator, the dispute shall be subject to
arbitration between the Administrator and a representatives) established by the
20
Advisory Committee. The Administrator shall be granted 180 days to cure any
deficiencies identified by the arbitrator before any removal may be considered
effective. Any notice of removal or resignation of the Administrator shall be
effective 60 days after receipt by the Administrator or Advisory Committee
representatives, as the case may be, or at such other time as is agreed to by the
Administrator and the Advisory Committee representatives. If, within 60 days after
notice of resignation or removal of the Administrator, the Advisory Committee
representatives have not designated a successor Administrator, the Administrator
may apply to any court of competent jurisdiction for the appointment of a
successor Administrator.
9.4 Successor Administrator. The Administrator, subject to the veto right
described below, may appoint a successor Administrator. The Administrator shall
provide 30 days' advance notice to the Advisory Committee that it has
designated a successor Administrator. If Employee Advisory Committee
representatives representing a majority v i Par i icipai its and I if E mpio y er AdvlSOry
Committee representatives employing a majority of Participants object to the
designated successor in writing to the Administrator within 30 days after the date of
the Administrator's notification mailing, then the designation shall not become
effective. If there is no sufficient objection, the Administrator shall deliver to the
Trustee copies of: (a) a written instrument executed by the Administrator
appointing such successor, and (b) a written instrument executed by the successor
in which it accepts such appointment. Such instruments shall indicate their
effective date.
If a vacancy in the office of Administrator 'occurs and the
Administrator has not appointed a successor Administrator in accordance with the
preceding paragraph, the Advisory Committee representatives representing a
majority of the Participants then participating in the Plan shall appoint a successor
Administrator and shall deliver to the Trustee copies of (a) a written instrument
executed by such Advisory Committee representatives appointing such successor,
and (b) a written instrument executed by the successor in which it accepts such
appointment. Such instruments shall indicate their effective date. If the
Administrator is removed by Advisory Committee representatives in accordance
with Section 9.3 hereof, the written instrument removing the Administrator shall also
appoint a successor Administrator. Any successor Administrator shall have all the
powers and duties of the original Administrator.
21
9.5 Administrative Fees. The Administrator shall be paid from the Trust
Fund an administrative fee for each Participant equal to an amount determined
from time to time in accordance with the Participation Agreement between the
Administrator and the Participant's Employer. Such fees shall be charged against
the Participants' Account balances.
9.6 Powers of the Administrator. The Administrator shall have all such
powers as may be necessary to carry out the provisions of the Plan, and the
actions taken and the decisions made by the Administrator shall be final and
binding upon all parties. The powers of the Administrator shall include, but not be
limited to, the following:
(a) To act for the Plan in accepting an Employer for participation in
the Plan and in entering into a Participation Agreement with such Employer;
(b) To establish conditions fry n rticinafinn in the Plan;
(c) To determine all questions with regard to employment,
eligibility, coverage, and other similarly related matters;
(d) To determine all questions relating to the amount of any
Benefits and all questions pertaining to claims for Benefits and procedures for claim
review;
(e) To prescribe procedures to be followed by Participants in filing
claims for Benefits;
(f) To prepare and distribute information explaining the Plan to
Participants;
(g) To appoint or employ individuals to assist in the administration
of the Plan and any other agents deemed advisable, including banking, legal,
accounting, and actuarial counsel;
(h) To resolve all other questions arising under the Plan, including
any questions of construction;
(i) To take any such further action as the Trustee shall deem
advisable in the administration of the Plan; and
(j) To pay claims for Benefits either by issuing claims checks or by
delegating the authority to issue claims checks in accordance with Section 9.1
hereof.
9.7 Records. The acts and decisions of the Administrator shall be duly
recorded. The Administrator shall make available for examination by any claimant,
during the business hours of the Administrator, a copy of this Plan and such records
as may pertain to the computation of Benefits of such claimant.
22
9.8 Defect or Omission. Any defect, omission or inconsistency in this Plan
shall be corrected by the Administrator by such action as may be necessary to
correct such defect, supply such omission, or reconcile such inconsistency.
9.9 Liability of Administrator. Except for its own negligence, willful
misconduct, or breach of fiduciary duty, neither any Employee of the Administrator
nor any agent or other person appointed by the Administrator shall be liable to
anyone for any act or omission in the course of the administration of the Plan.
9.10 Funding Policy. The Administrc for shall establish and review a funding
policy consistent with the objectives of the Plan.
23
ARTICLE X
AMENDMENT AND TERMINATION
10.1 Amendments. The Administrator, through its board of directors,
reserves the right to amend this Plan at any time in such manner as it may be
necessary or advisable in order to qualify and retain the qualification of the Trust
Fund as a voluntary employees' beneficiary association in accordance with Code
section 501 (c)(9), and any such amendment may, by its terms, be retroactive; and
to-amend, alter, modify or suspend, in whole or in part, any provision or provisions
of this Plan at any time, retroactively or otherwise, by written notice to the Trustee,
the Employers and the Association representatives. In any event, no such
amendment shall:
(a) increase the duties or obligations of the Trustee or Employer
'fhnl If iTC .A/rltterj ^%Sr s nil
(b) decrease any Participant's Account balance; or
(c) cause or permit any portion of the corpus or income of the Trust
to revert to, or become the property of, or be used for the benefit of the Employer,
or divert any portion of the corpus or income of the Trust for purposes other than
the exclusive benefit of the Participants and their Dependents.
10.2 Termination and Discontinuance of Contributions. All of the Employers
and Advisory Committee representatives then participating in the Plan collectively
may terminate the Plan at any time by notice to the Administrator and Trustee. The
Plan shall terminate if all participating Employers withdraw from the Plan in
accordance with Section 11.6. Upon termination of the Plan, Benefits shall be paid
by the Trust Fund or by such other means determined by the Administrator in
accordance with the Trust Agreement until all liabilities under the Plan to
Participants have been satisfied.
24
ARTICLE XI
MISCELLANEOUS
11.1 Rights of All Interested Parties Determined by Terms of the Plan. The
Plan and Trust are purely voluntary on the part of the Employer; the Trust shall be
the sole source of Benefits provided under the Plan; and in no event shall the
Administrator or Employer be liable or responsible therefor. The Plan shall be
binding upon all parties thereto and all Participants, and upon their respective
heirs, executors, administrators, successors, and assigns, and upon all persons
having or claiming to have any interest of any kind or nature under the Plan or the
Trust.
11.2 No Employment Rights Created. The creation and maintenance of
the PI,^,1,r; � t(;'i„ r,n, C'Cr1jer any ry iiJ i3Oi�fli ivied employment ii On an�r �mplCY�ee,
and all Employees shall remain subject to discharge to the same extent as if the
Plan had never been established.
11.3 Number and Gender. Where necessary or appropriate to the
meaning hereof, the singular shall be deemed to include the plural, the plural to
include the singular, the masculine to include the feminine and neuter, the
feminine to include the masculine and neuter, and the neuter to include the
masculine and feminine.
11.4 Notice to Employees. Notice of the existence and the provisions of this
Plan and amendments thereto shall be communicated by the Employer or
Advisory Committee representatives to all persons who are, or who become
Eligible Employees.
11.5 Notification of Address. Each person eligible to receive Benefits shall
notify the Administrator in writing of his post office address and any change of post
office address thereafter. Any communication, statement or notice addressed to
such person at his last post office address as filed with the Administrator (or if no
post office address was filed with the Administrator, then his last post office address
shown by the Employer's payroll records) will be binding upon such person for all
purposes of this Plan, and neither the Employer nor the Administrator shall be
obligated to search for or ascertain the whereabouts of any such person.
25
11.6 Withdrawal of Employer. If an Employer withdraws from the Plan, it shall no
longer be a participating employer in the Plan. In such event, the Administrator
shall maintain the Accounts of each Participant who is or was an Employee of
such Employer, and shall pay Benefits to each such Participants in accordance
with the terms of the Plan. Expenses of the Trust fund and administrative fees shall
be charged against such Participants' Accounts in accordance with Section 7.2
and 9.5 hereof for as long as such Accounts are maintained by the Administrator.
11.7 Headings. The headings and subheadings in this Plan are inserted for
convenience and reference only and are not intended to be used in construing
this Plan or any provision hereof.
11.8 Governing Law. This Plan shall be construed according to the law of the
State of Illinois and applicable Federal Low and all provisions hereof shall be
administered according to the law of the State of Illinois and applicable federal
law.
(plcanvaz.doc)
26
Nationwide Privacy Statement
Thank you for choosing Nationwide®.
Our privacy statement explains how we collect, use, share, and protect your personal information. So
just how do we protect your privacy? In a nutshell, we respect your right to privacy and promise to
treat your personal information responsibly. It's as simple as that. Here's how.
Confidentiality and security
We follow all data security laws. We protect your information by using physical and technical
safeguards. We limit access to your information to those who need it to do their jobs. Our business
partners are also legally bound to use your information for our purposes only. They may not share it
or use it in any other way.
Collecting and using your personal information
We collect information about you when you ask about or buy one of our products or services. The
information comes from your application, business transactions with us, and consumer reports — but
only if applicable to the product or service that you choose. Please know that we only use that
information to sell, service, or market products to you.
We may share the following types of information:
• Name, address, Social Security number
• Assets and income
• Property address and value
• Account and policy information
• Consumer report information
• Family member and beneficiary information
Sharing your information for business purposes
When you buy a product, we may share your personal information for everyday servicing purposes
with our sister companies and business partners. Some examples include mailing your statement or
processing transactions that you request. You cannot opt out of these. We also share your personal
information with your broker or independent agent. They use your personal information to manage
your policy or account. We may also share your personal information where federal and state law
requires.
Sharing your information for marketing purposes
We don't sell your information for marketing purposes. We have chosen not to share your personal
information with anyone except to service your product. So, there's no reason for you to opt out. If we
change our policy, we'll tell you and give you the opportunity to opt out before we share your
information.
Nationwide®
On Your Side
Using your medical information
We sometimes collect medical information. We may use this medical information for a product or
service you're interested in, to pay a claim, or to provide a service. We may share this medical
information for these business purposes if required or permitted by law. But, we won't use it for
marketing purposes unless you give us permission.
Accessing your information
You can always ask us for a copy of your personal information. Please call us at 1-877-677-3678 to
access your personal information or for questions about our privacy policy. For TTY/TDD services,
please call 1-800-995-4457. We have a process that allows you to review your information and for
your protection we will verify your identity first. We can only give access to information that we
control. We don't charge a fee for giving you a copy of your information now, but we may charge a
small fee in the future.
You can call your agent or producer to change your personal information. But, we can't update
information that other companies provide to us. So, you'll need to contact these other companies to
change your information.
A parting word ...
These are our privacy practices. They apply to all current and former clients of Nationwide Financial
and the affiliates and subsidiaries that offer life insurance, banking services and investments. This
includes the following companies:
Nationwide Life Insurance Company
Nationwide Life and Annuity Insurance Company
Nationwide Retirement Solutions, Inc.
Nationwide Deferred Compensation, Inc.
Nationwide Trust Company, FSB a division of Nationwide Bank
NFS Distributors, Inc.
Pension Associates, Inc.
Nationwide Financial Institution Distributors Agency, Inc.
Nationwide Retirement Solutions, Inc. of Arizona
Nationwide Retirement Solutions, Inc. of Ohio
Nationwide Retirement Solutions, Inc. of Texas
Nationwide Retirement Solutions Insurance Agency, Inc.
Nationwide Financial Institution Distributors Agency, Inc.
Nationwide Investment Services Corporation
Nationwide Securities, Inc.
Nationwide Investment Advisors, LLC
Effective Date: September 24, 2007
NFS-0230-G