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HomeMy WebLinkAboutReso 1975-7641,, RESOLUTION NO. 7641 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN AMENDED DEFERRED COMPENSATION PLAN FOR FULL-TIME UNCLASSIFIED E~~PLOYEES AND MEMBERS OF THE CITY COUNCIL AND AUTHORIZING ITS IMPLEMENTATION The City Council of the City of Chula Vista does hereby resolve as follows: WHEREAS, the City Council has heretofore on July 23, 1974, by Resolution No. 7380, approved a deferred compensation plan for full-time unclassified employees and authorized its implementation, and [4HER.E'AS, said plan nas now been subjected to several changes at the direction of the Internal Revenue Service and is now in a form acceptable to the Internal Revenue Service, and [9HEREAS, said plan is attached hereto as Exhibit "A" and provides for a thirty-day enrollment period. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista that the City of Chula Vista Deferred Compensa- tion Plan as presented herein, be, and the same is hereby approved and adopted, and the Mayor of the City of Chula Vista be, and he is hereby authorized and directed to sign the said document on behalf of the City. BE IT FURTHER RESOLVED that the said plan shall be operative immediately, upon implementation as provided therein, provided, however, it shall only apply to the compensation earned by the Mayor and Councilmen and all full-time unclassified employees after the date such employee files a Participation Agreement with the City. BE IT FURTi~ER RESOLVED that the City Manager, the Assis- tant City ~~Ianager and the Finance Director shall act as a committee to implement and manage said plan in the manner provided therein. Presented by Approved as to form by ~`. Gordon K. Grant, Director of George D.-Lindberg, City Attorney' Finance ADOPTED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, this 18th day of February r 197 5, by the following vote, to-wit: AYES: Councilmen Hobel, Hamilton, Hyde, E dahl, Scott NAYE S : Counci Zmen ABSENT: Councilmen None None Mayor of the City of Chula Vista ATTEST City Clerk STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) ss. CITY OF CHULA VISTA ) I, JENNIE M. FULASZ, City Clerk of the City of Chula Vista, California, DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of and that the same has not been amended or repealed. DATED (SEAL) City Clerk CC-660 ,, Articles of the City of Chula Vista Deferred Compensation Plan Article I Name Article II Definitions The name of this plan is the City of Chula Vista Deferred Compensation Plan, (hereinafter referred to as the "Plan"). For the purposes of this Plan, certain words or phrases used herein will have the following meanings: A. "Compensation" shall mean wages payable to officers and employees of the city. B. "Deferred Compensation" shall mean the amount of compensation not yet earned, which the participant and the city mutually agree shall be deferred in accordance with the provisions of the Plan. C. "Retirement" shall mean: 1. Separation from city service if, at the time of separation a participant attained such an age or has accumulated sufficient years of city service to be qualified for retirement benefits through the Public Employees Retirement System of the city whether such benefits are payable or not. 2. In the event of termination of service prior to retirement as defined in (1) above, such time as the employee attains age 55 and applies for retirement benefits as provided for in this Plan. D. "Termination of Service" shall mean the serverance of the participant's employment or contract with the city prior to retirement. E. "city" shall mean the City of Chula Vista providing that the City Manager or his designee for that purpose, shall exercise on behalf of the city any discretion or other function given to the city under the Plan. F. "Director" shall mean the City Manager of the City of Chula Vista, or his successors or his designee (s). G. "Participant" shall mean any eligible employee who fulfills the requirements of enrollment into this Plan. l~ ~ ,, ~ ~. H. "Change in Enrollment". Depending upon the context in which it is used, a change in enroll- ment is an election by a previous enrollee (1) to increase or decrease the amount of deferment of compensation, (2) to change investments sub- ject to the approval of the city, or (3) to accept or substitute any election expressly given him under the plan where expressly author- ized to do so thereunder pursuant to a change in enrollment, providing that a change in enrollment which accepts or substitutes such election shall only be applicable to income earned by the enrollee after the effective date of a change in enrollment as prescribed in Article VI. Article III The Director shall have full authority to adopt Administration rules and regulations for the administration of the Plan and to interpret, alter, amend or revoke any rules and regulations so adopted. Article IV All employees of the city, excepting any class of Eligibility employees whom are designated by the Director as being ineligible, may become participants in this Plan. Article V The conditions of enrollment in the Plan shall be Enrollment as follows: A. Any eligible employee may become a participant in the Plan, commencing with prospective compensation in the year in which his election to do so is made within sixty (60) days after the announcement that the Plan is open for en- rollment. Subsequent thereto (or subsequent to any revocation pursuant to Article VII) he may thereafter become a participant in the Plan upon at least thirty (30) days prior written notice of his election to do so, commencing with calendar year following that in which such notice is completed. A participant shall agree in writing on a form approved by the Director to accept the terms of the Plan. B. At the time of enrollment or change in enrollment relating to the deferment of compensation, a participant must agree to defer a minimum amount equal to not less than $25.00 per month or $300.00 for a twelve-month period. Article VI Any change in enrollment shall be made on forms Change In approved by the city and shall be effective only Enrollment commencing with the calendar year immediately following the calendar year in which at least thirty (30) days prior written notice of such election is given the city. Not more than one such notice shall be acceptable within any twelve-month period, ~; ., ~, , %= computed from the date of the last such written notice, or, if none, from the date of enrollment; provided that more than one type of change in enroll- ment specified in Article II, H may be combined in any one written notice. Article VII Any agreements may be revoked by a participant at Revocation any time. Revocation orders must be made in writing, signed by the participant, to the Director, except as otherwise provided by Article XIX. In the event of revocation a participant or benefi- ciary shall only be entitled to benefits provided for in Articles XII and XIII of the Plan, pursuant to elections made by the participant with respect thereto upon enrollment, or change in enrollment pursuant to Article XII C, except to the extent such elections are superceded by the last sentence of Article XII B. Should a participant re-enroll after a revocation, rights, benefits, and deferred compensation accruing prior to such revocation will not be merged in any way with the participant's rights, benefits, or deferred compensation accruing after such re-enroll- ment. Article VIII Upon termination of service, the City shall make Termination of payment to the participant in a manner specified Employment by him in an election made pursuant to Article XII. Article IX Subject to the provisions of the Charter of the Investment City of Chula Vista, Section 16431 of the Government Code and Article VIII of this Plan, the city may invest funds held by the city pursuant to agreements between participants and the city to defer a portion of compensation otherwise receivable by the partici- pants. A. Such investments shall be made in accordance with the requests made by each participant at the time of enrollment, or change in enrollment. B. The city shall retain the right to approve or disapprove such investment requests. In the event of disapproval of a request for investment an otherwise eligible employee shall not be deemed to have fulfilled all requirements of enrollment or change in enrollment with respect to the Plan. ~ , y. _ ' ~f/~ C. Any action by the city in approval of any such investment request shall not be considered to be either an endorsement or guarantee of any investment, nor shall it be considered to attest to the financial soundness or the suitability of any investment for the purpose of meeting future obligations as provided for in Article XII or Article XIII of this Plan. While the city through its employees, will endeavor to use reasonable care in the selection of an investment or approval of any investment request, neither the city nor its employees shall be liable to any participant for dis- appointing results, or loss, flowing from any shortcomings in this regard. Article X The city shall have the sole ownership of all Ownership and investments made pursuant to this Plan and no Investment participant shall have any interest therein or the right to acquire the same. The city may change or liquidate such investments or where permitted by the council utilize the same for the general purposes of the city. However, in the latter event the city will repay to participants and beneficiaries amounts otherwise due them by the city under the Plan, subject to funds made available by the council for that purpose. In the event the city eliminates any investment which it believes affects a participant, it shall substitute an investment on its approved list, which in its sole discretion seems most analogous to that chosen by the participant. In such event, it shall within thirty (30) days of such substitution notify in writing the participant thereof. Thereafter, so long as the participant remains in the Plan, benefits shall be measured in accordance with the results of the previous investment and the substituted invest- ment effective as of the time of substitution. Notwithstanding the foregoing, a participant shall have a right to request a change in investments as a change in enrollment pursuant to the provisions of Article VI, subject to the approval of the city. Article XI Subject to the provisions of Article IX, an invest- Participants ment may be made in any medium approved by the city, Accounts permitted by Section 16431 of the Government Code, which includes obligations set forth in Sections 53601 and 53602 of the Government Code, corporate stocks, bonds, and securities, mutual funds, savings ~ ; '`~ ~ ~ ~~'~_ ~~ and loan accounts, annuities, mortgages, deeds of trust, or other security interests in real or personal property. For the purpose for any of the foregoing, the city may enter into contracts with firms, corporations, or investment institutions to facilitate or accomplish such investments. All such invest- ments shall be purchased or contracted for solely in the name of the city. No investment, or account relating thereto, shall be entered into in the name of any participant, nor shall any such investment indicate in any manner that the participant is the owner thereof. The city will furnish to each participant state- ments as of June 30th of each year disclosing: A. The accumulated amounts of compensation which have been deferred and invested. B. Any administrative costs chargeable against the same. C. Any amounts credited to the participant's account by way of interest, dividends or other proceeds flowing from his accumulation. D. The balance of such participant's account. Article XII A. At the time of enrollment (or via an election Elections or substitution of an election pursuant to a change in enrollment), each participant shall elect one of the following methods of distribu- tion of the participant's account balance as of the date of retirement: 1. A lump sum payment of the balance of the participant's account as of the date of retirement. 2. Monthly, quarterly, semi-annual, or annual payments for a designated period of not less than three years and not more than the re- maining years of the participant's life expectancy, in accordance with standard mortality tables recognized for that purpose by the Director, in amounts such that the participant's account balance will be liquidated as of the final payment. ~: ~_ 3. By the purchase of an annuity which runs over a period coincident with the life of a par- ticipant or his beneficiary or otherwise for a specified number of years subsequent to participant's retirement or death; providing, that the city shall be the owner of and named beneficiary in any such annuity contract so purchased. B. The city agrees to distribute deferred compensa- tion account balances as of such retirement date, or such extended time thereafter as referred to in paragraph C of this Article, in accordance with the method designated by the participant as provided in this Article. However, in the event that an account balance may be of a small amount making periodic payments or payments for an extended duration impractical or for other good and sufficient reason the city may elect, in its sole discretion, to disapprove such method designated by the participant at the time of enrollment and to choose another method of dis- tribution permitted by this Article. C. Notwithstanding anything in this plan to the contrary, at the time of enrollment or change in enrollment, each participant may elect to delay commencement of the distribution of participant's account balance as specified in Paragraph A of this Article for one of more years after retire- ment, not exceeding ten years thereafter. For this purpose, years shall be deemed to be successive twelve month periods following the date of retirement. Participants so electing must specify at the time of enrollment or change in enrollment such number of years which will elapse between retirement and the commencement of distribution of the account balance, providing that if such election is made by a change in enrollment distribution of the income deferred prior to the effective date of such change will remain unchanged. Article XIII A. At the time of enrollment (or via an election or substitution of an election pursuant to a change in enrollment), participant shall specify one of the following methods of distribution to his beneficiary, if any, should participant die before entitlement: 1. A lump sum payment of the balance due parti- cipant as of the day of his death. ~_ 1 ~ ~. 2. Monthly, quarterly, semi-annual or annual payments for not less than three years nor more than the remaining years of the beneficiary's life expectancy in accordance with standard mortality tables recognized for that purpose by the Director, in amounts such that the participant's account balance will be liquidated as of the final payment. 3. By the purchase of annuity which runs over a period coincident with the life of a beneficia or otherwise for a specified number of years beyond participant's death; providing, that the city will be the owner of and named beneficiary in any such annuity contract so purchased. B. The term "beneficiary" as used in this plan shall be deemed to refer to one or more beneficiaries. Notwithstanding any other provision of this plan, participant may at any time change beneficiaries, add to or reduce their number, indicate, or change the proportion each will receive of the permitted distributions under this plan, or elect to change one option of distribution to a beneficiary permitted under this plan to that of another so permitted. Participant may also specify a contingent beneficiary in the event a beneficiary dies before participant's retirement. Should parti- cipant, however, himself die before retirement and no beneficiary has been named, or is a specific person or persons have been named, but are no longer in life at the time of participant's death, participant's account balance will be paid to his estate in a lump sum. No right, however, to make any change specified in this paragraph shall inhere in any beneficiary. C. In the event of participant's death after retire- ment, the beneficiary, (or if none, participant's estate) shall receive the same payments partici- pant would have been entitled to receive from the city had he lived, except where the city by virtue of an annuity contract purchased pursuant to Article XII A.3. by the city in its own name, and in which the city is named, beneficiary, receives payments measured by parti- cipant's life or a period of time subsequent there- to. In the latter case participant's beneficiary (or if none, participant's estate) shall receive from the city amounts equal to those amounts which the city receives by virtue of such contract after participant's death. ~,. f,.o. Article XIV A. Approved leave of absence with pay shall not Leave of Absence affect agreements to participate in this Plan. B. Approved leave of absence without pay shall be considered to be a temporary revocation of the participant's agreement to participate in this Plan. Participation in the Plan will be auto- matically reinstated as of the first day of the next pay period subsequent to the termination of the leave of absence status. Article XV For reasons of financial emergency where the with- Withdrawal for drawal of funds would be necessary to prevent great Emergencies hardship to the participant and the amount of with- drawal requested by participant is only the amount necessary to meet that emergency, and is not reim- bursed by insurance, participant may apply to the Director for withdrawal of such amount from the Plan prior to retirement or to termination of participant's service with the city. It is understood that occurence of any event which will cause great hardship to participant will not be within the control of the participant. Examples of such need under the foregoing criteria, may be emergencies due to a catastrophic illness, flood or earthquake; death in the family, disabling injury, and examples of similar import. Withdrawals for expenditures normally budgetable, such as for a down payment on a home or purchase of an auto, or college expenses, will not be permitted. Any amounts so approved hereunder for withdrawal shall be paid to participant in a lump sum. If such application for withdrawal is approved by the Director, the withdrawal will be effective the later of the dates specified in the participant's application or the date of approval by the Director. Following withdrawal, the participant's compensation will be thereupon restored to its prior level. It is understood that the occurrence of any event which will cause great hardship to the participant will not be within the control of such participant. Article XVI The Director shall determine in a manner deemed fair Administrative and equitable to himself the cost to the Finance Costs Department of other city Departments in withholding deferred compensation pursuant to this Plan or in making investments or otherwise administering or implementing the Plan. He shall withhold or collect, or have withheld or collected such costs, in such manner as he deems equitable either (1) from the compensation deferred pursuant to the Plan, the income produced from any investment with respect thereto, or from principal returned from any invest- ment, whether or not augmented, or (2) from the organization receiving such investments, where required by law to collect therefrom, or if not so required, where mutually satisfactory to such organization and the Director, or (3) by direct charge to the participants. The Director may remit or direct the remission of appropriate amounts so withheld or collected to other city departments affected. Annual statements of accounts distributed to participants shall specify any amounts deducted by the city, or by any organiza- tion contracting with the city in connection with this Plan, from deferred compensation of such participants or income derived therefrom, for costs pursuant to this Article. Article XVII The city may at any time terminate this Plan. Upon Amendment of such termination, the participants in the Plan will Termination of Plan be deemed to have withdrawn from the Plan as of the date of such termination, the participant's full compensation on a non-deferred basis will be there- upon restored, and the city agrees to pay such participants the amount of money determined as if the participant had terminated his employment, said payment to be made in a lump sum, or in the city's sole discretion, in five equal annual installments. The city may also amend the provisions of this Plan at any time; provided, however, that no amendment shall affect the rights of participants or their beneficiaries to the receipt of payment of benefits, to the extent of any compensation deferred at the time of the amendment as adjusted for investment experience hereunder prior to and subsequent to the amendment. Article XVIII A participant may not, with respect to his own Non-Exercise by participation in the Plan exercise on behalf of Participant of State's the city and discretion conferred upon the latter Discretion Affection by Articles VIII, X (insofar as it pertains to the His Own Plan elimination or substitution of investments), XII (B) , or XVII. Article XIX It is agreed that neither the participant nor his Nonassignability beneficiary nor any other designee shall have any right to commute, sell, assign, transfer or other- wise convey the right to receive any payments here- under which payments and right thereto are expressly declared to be nonassignable and nontransferable; and, any such assignment or transfer shall not be recognized by the city, and if made by the partici- pant in writing shall be deemed to constitute a revocation by the participant pursuant to Article VII. Except as otherwise required by law notwithstanding this provision, any compensation deferred or benefits f ~.._i. paid pursuant to this Plan shall not be subject to attachment, garnishment, or execution, or to transfer by operation of law in the event of bankruptcy, insolvency, or desolution of marriage. Article XX A copy of this Plan shall be made available to each Copies of eligible employee prior to his enrollment in the This Plan Plan.