HomeMy WebLinkAbout17- Finance CITY OF SAN BERN DINO REQUEST F' R COUNCIL ACTION
From: Barbara Pachon Subject: Deferred Compensation Plan for Parttime,
Director of Finance Seasonal and Temporary Employees
Dept: Finance .
Date: December 2, 1993
Synopsis of Previous Council action:
Resolution 91-493 approved December 19, 1991
Recommended motion:
Approve attached resolution
Signature
Contact person: Barbara Pachon Phone: 384-5242
Supporting data attached: Staff Report Ward:
FUNDING REQUIREMENTS: Amount:
Source: (Acct. No.)
Acct. Description)
Finance: �'�QT�- / �--
Council Notes:
75-0262 Anonrin [tom Nn 17
CITY OF SAN BERM MINO - REQUEST F`4 COUNCIL ACTION
STAFF REPORT
Effective January 1, 1992 , the Omnibus Budget Reconciliation Act of
1990 subjects all service performed by State and Local Government
employees, who are not members of a retirement system to Social
Security Taxes. The Treasury Department has issued proposed
regulations which permit participation in a Deferred Compensation
Program (sec. 457) as an alternative to Social Security Taxes. To
qualify, a Deferred Compensation plan is required to allocate at
least 7 . 5 percent (7 . 5%) of an employee's annual compensation into
his/her Deferred Compensation account.
Currently the City of San Bernardino has an established Deferred
Compensation Program for its employees who are not covered under
the Public Employees Retirement System (PERS) . These employees
include Parttime, Seasonal and Temporary employees (PST) . This
program is a qualified program and is administered by Great Western
Bank for the City.
There are two changes in the new agreement with Great Western. The
first change is that PST employees involved with the program will
no longer have to pay a $1 monthly administrative fee. The second
change is that the contract will continue indefinitely until either
party gives 120 day written notice to terminate.
'5-0264
I RESOLUTION NO.
2 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
EXECUTION OF AN AGREEMENT WITH GREAT WESTERN SAVINGS FOR SERVICES
3 AS ADMINISTRATOR OF THE CITY'S PST DEFERRED COMPENSATION PLAN.
4 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AS FOLLOWS:
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6 SECTION 1. The Mayor of the City of San Bernardino is hereby
7 authorized and directed to execute on behalf of said City an
8 agreement with Great Western Savings for services as administrator
9 of the City's PST Deferred Compensation Plan, a copy of which is
10 attached hereto, marked Exhibit "A" and incorporated herein by
11 reference as fully as though set forth at length.
12 I HEREBY CERTIFY that the foregoing resolution was duly
13 adopted by the Mayor and Common Council of the City of San
14 Bernardino at a meeting thereof, held on the day
15 of 199 , by the following vote, to wit:
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17 Councilmembers AYES NAYS ABSTAIN ABSENT
18 NEGRETE
19 CURLIN
20 HERNANDEZ
21 OBERHELMAN
22 DEVLIN
23 POPE-LUDLAM
24 MILLER
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26 City Clerk
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2 The foregoing resolution is hereby approved this day of
1993 .
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4 Tom Minor, Mayor
5 City of SaBernardino
Approved as to form
6 and legal content:
7 JAMES F. PENMAN
City At orney
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By: 9 ��
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By,
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FICA - SDBBTITUTD
DEFERRED COXPBNBATION PLAN AGREEXENT
This Agreement is effective this lot day of December 1993 , by and
between GREAT WESTERN BANK, a Federal Savings Bank, hereinafter
referred to as GREAT WESTERN, and the CITY OF BAN BrMNARDINO, its
officers, employees and agents, hereinafter collectively referred
to as AGENCY.
WHEREAS, AGENCY, pursuant to and in Compliance with Sections
3121(b) (7) (F) and 457 (b) of the Internal Revenue Code of 1986, has
established a Deferred Compensation Plan, hereinafter referred to
as PLAN; and
WHEREAS, AGENCY desires to utilize GREAT WESTERN in connection with
the administration of the 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. DESIGNATION: AGENCY hereby designates GREAT WESTERN as a
Depository Institution and Administrator for deferred
compensation funds invested in GREAT WESTERN. It is
recognized and agreed that GREAT WESTERN will only maintain a
FICA substitute Plan if GREAT WESTERN is administrator for
AGENCY's 457 Plan.
2 . TERM: This Agreement shall remain in effect until it iS
terminated by one or both parties in accordance with the
provisions of this agreement. This Agreement may be
terminated by either party, with or without "Cause" as that
term may be defined herein, and without obligation, upon the
giving of one hundred twenty (120) days' written notice by the
party terminating the Agreement to the other party.
3 . DEFAULT: In the event the Agreement is terminated for
"Cause" (which 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, specifying the particulars of the default. if such
default is not cured within sixty (60) days from the date in
which notice of default is given, the non-defaulting party may
terminate the Agreement effective thirty (30) days after the
end of the sixty (60) day period.
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4 . INVESTMENT: GREAT WESTERN agrees to accept deferred
compensation plan funds for investment in the Great Western
Bank Liquid Account ("GWBLA") .
(a) The rate/yield on the GWBLA account will be a
variable rate, which may change as often as daily.
(b) All participants with funds invested in the OwHLA,
whether they are active, inactive, or in
distribution, will earn interest at a rate/yield
which is subject to change daily.
(c) Interest earnings will accrue daily commencing on
the date the funds are P981e4 (as defined below) to
the Participant's account by GREAT WESTERN.
Interest earnings will be credited monthly on the
last day of the month, and will be automatically
reinvested to allow for monthly compounding. The
365/360 day method will be used.
(d) Each such account shall be subject to rules,
regulations and statutes to which GREAT WESTERN is
subject.
(e) Plan funds invested in the GWBLA are backed by the
full faith and credit of the U. S. Government and
are also insured by the Federal Deposit Insurance
Corporation, an agency of the Federal Government,
up to $lo0, 000 per participant. Great Western will
collateralize any amounts invested in the GWBLA in
excess of FDIC insurance limits, if required, in
accordance with applicable law.
5. ESTABLISHMENT OF ACCOUNTS:
A. ENROLLMENT SERVICES: GREAT WESTERN agrees to process, or
arrange to have processed, the enrollment of eligible
employees. GREAT WESTERN agrees to provide informational
and promotional material pursuant to the 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.
B. DEFERRALS: The minimum participant deferral per pay
period shall be not less than $1. 00.
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C. AGENCY agrees to:
(a) Cause appropriate deductions to be made from such
payrolls) as may be applicable and send the funds
representing the total participant deferrals to
GREAT WESTERN.
(b) Provide to GREAT WESTERN, in such electronic or
magnetic media designated by GREAT WESTERN, a
deferral listing with respect to participant
sub-accounts to include not less than the
1. Name of Participant
2 . Social Security Number of participant
J . Amount to be credited to paiticipailt' 6
sub-accounts)
(o) FU11Ub May Dw t:tfdnL Ly w.iLla LLaiiafuz , Lhruuyh dtl
automated clearinghouse or by check in accordance
with written instructions provided by GREAT
WESTERN. Failure to follow the written
1ribLruuLluns provided by GREAT WESTERN may result
in delay of Posting to Participant accounts.
(d) Funds will be posted no later than the business day
fcllcwina the day on which tho funds and the
deferral listing are received by GREAT WESTERN.
GREAT WESTERN will not be liable for any delay in
posting if AGENCY fails to send either the funds
representing d4farral amaunta by deferral
information in accordance with GREAT WESTERN's
1iinL1uL_L1U115 LU Lhe L.e11L1a1 PIUl:PIb6111y 6i L6
designated by GREAT WESTERN.
B. - GREAT WESTERN agrees to:
(�) Eatahlish a sub-account for 4ach participant.
(b) Credit the amounts sent by AGENCY to the
sub-account of the various participants in
accordance with the latest written instructions on
file with GREAT WESTERN.
6. PARTICIPANT SERVICES:
A. GREAT WESTERN will provide particIP&ntc quarterly
statements detailing participant's year-to-date deferral
amounts, account balance information that includes
changes in account value since the previous report date
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and any fees or charges (if any) assessed against the
Participant account. Participants shall be informed that
they must notify GREAT WESTERN within thirty (30) days of
receipt of their statements or confirmation of their
investments, to report any errors to GREAT WESTERN.
GREAT WESTERN will not be liable for any errors not
reported within this time frame.
B. GREAT WESTERN agrees to mail 90% of these statements to
participants within fifteen (15) business days after the
and of each calendar quarter, and 100% of the statements
to participants within eighteen (18) business days after
the and of each calendar quarter. GREAT WESTERN will
have no responsibility to report, or account for the
accuracy of information applicable to periods prior to
the effective date such Plan was administered by GREAT
WESTERN.
C. GREAT WESTERN will provide certain standard reports
quarterly to AGENCY to enable AGENCY to effectively
monitor all accounting and record-keeping processes.
These reports will include combined data for an entire
Plan. In addition, all services (where appropriate) will
be provided in accordance with the attached Exhibit B.
D. GREAT WESTERN agrees to maintain, for a reasonable time,
the records necessary to produce the above mentioned
reports, and agrees that all records shall be the
property of AGENCY. AGENCY agrees that all related
computer tapes, disks and programs shall remain the
p rt> Arty of aRRAT wrATFRN_
7 . DISTRIBUTIONS:
A. GREAT WESTERN will assist the participant in preparing
necessary forms to effectuate distribution.
B. Participants will—receive a lump sum distribution of
their account within ten (10) business days of the
earliest date permitted by the Plan.
C. GREAT WESTERN will be responsible for preparing and
filing All rppnrtn required by federal and state taxing
authorities through the effective date of the termination
of the contract. AGENCY shall be responsible for all
reporting requirements for periods prior to the effective
date of this contract, or after the termination date of
this contract. GREAT WESTERN will be responsible for the
annual filing of individual 1099 or W-2 forms, unless by
contract between AGENCY and an Investment Provider, the
forms are prepared by the Investment Provider that
provides annuity payments to participants. GREAT WESTERN
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shall withhold income taxes from distributions as
required, and remit said taxes to appropriate regulatory
authorities. GREAT WESTERN shall also prepare and file
periodic and annual tax returns for such amounts
withheld.
8 . TERMINATION: Upon the effective date of termination of this
Agreement, the following shall occur:
a. GREAT WESTERN will no longer accept deferrals.
b. GREAT WESTERN will provide AGENCY a copy of all records
relating to participant sub-accounts, 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.
C. If termination is due to either party exercising the
right of termination described in Section 2 above, within
90 days of the effective date of termination, GREAT
WESTERN shall transfer savings accounts to AGENCY, or to
such other entity as AGENCY may designate in writing.
d. Notwithstanding any provision to the contrary, if
termination is for Cause (as that term is herein
defined) , the disbursement of funds shall occur within
forty-five (45) days of the effective date of
termination.
e. There shall be a transfer/termination fee imposed on each
participant account only when either the Participant or
AGENCY elects a total Plan transfer or termination from
the GREAT WESTERN Plan. The fee shall not exceed the
lesser of $25. 00 per participant, or the amount permitted
by applicable law or regulation.
9 . CONFIDENTIALITY: GREAT WESTERN agrees that all information
supplied to and all work processed or completed by GREAT
WESTERN shall be kept confidential and will not be disclosed
except as required by law.
10. PRIVITY OF CONTRACT: GREAT WESTERN and Plan Participants
shall have no privity of contract with each other.
11. TITLE AND oininnoIIir, In_naiuxAmnee iri6th lame pro-riei*n■ ti
Internal Revenue Code Sections 457 and 3121 (b) (7) (F) , all
account(s) established under this Agreement shall be held in
the name of AGENCY.
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12. CIRCUMSTANCES EXCUSING PERFORMANCE: Neither party to the
Contract shall be in default by reason of failure to perform
in accordance with its terms if such failure arises out of
causes beyond reasonable control and without fault or
negligence on their part. Such causes may include, but are
not limited to, acts of God or public enemy, acts of the
government in either its sovereign or contractual capacity,
fires, floods, epidemics, quarantine or restrictions, freight
embargoes, and unusually severe weather.
13. INDEMNIFICATION: GREAT WESTERN agrees to be solely
responsible to AGENCY for any and all services performed by
GREAT WESTERN, its agents or its employees under this
Agreement. GREAT WESTERN shall be responsible for any error
or negligence committed by GREAT WESTERN, its agents, or its
employees. AGENCY shall be responsible for any error or
negligence committed by AGENCY, its agents or its employees.
14 . ATTORNEYS' FEES: Each party agrees that in the event any
claim or lawsuit is brought by anyone, each party shall be
responsible for its own attorneys ' fees and/or any costs or
expenses related to the bringing or defense of any such claim,
arbitration, or lawsuit.
15. ASSIGNABILITY: No party to this Agreement shall assign the
same without the express written consent of the other party,
which Consent not to be unreasonably withheld. This provision
shall not restrict GREAT WESTERN' s right to delegate certain
recordkeeping or other services to an agent. Unless agreed to
by the parties, no such assignment shall relieve any party to
this Agreement of any duties or responsibilities herein.
16 . 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.
17 . APPLICABLE LAW: This Agreement shall be construed in
accordance with the laws operating within the State of
California.
1S. UNLAWFUL PROVISIONS: In the event any provisions 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 relating thereto.
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19. MODIFICATION: This writing is intended both as the final
expression of the Agreement between the parties and as a
complete statement of the terms of the Agreement, pursuant to
California Code of Civil Procedure 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.
20. NO WAIVER: The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver
of that provision or of any other provision in the Agreement
and either party may, at any time, enforce the provision
previously waived, unless a modif ioation to this Agreement has
been executed.
21. SEVERABILITY: The provisions of this Contract are severable,
and, if for any reason a clause, sentence, paragraph, or other
part of this Contract shall be determined to be invalid by a
court or federal or state agency, board, or commission having
jurisdiction over the subject matter thereof, such invalidity
shall not affect other provisions of this Contract which can
be given effect without the invalid provision.
22. NOTICES: All notices and demand to be given under this
Agreement by one party to another shall be given by certified
or United States 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 received on the
earlier of, three days from the date of mailing, or the day
the notice is actually received by the party to whom the
notice was sent.
If to GREAT WESTERN GREAT WESTERN BANK
Deferred Compensation Department
19850 Plummer Street
Chatsworth, California 91311
Attn: Roy Leff
If to AGENCY CITY OF SAN BERNARDINO
300 North I'D" Street, 4th F1.
San Bernardino, CA 92418
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective on the date first written above.
I
_ V OE SAN BVRNARDINO GRE T WRS'T'EM
BY: BY:
MAYOR VICE PRESIDENT
DATE SIGNED: DATE SIGNED:
APPROVED AS TO FORM AND LEGAL CONTENT
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Y ATTORNEY
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