HomeMy WebLinkAboutReso 1986-12765 RESOLUTION NO. 12765
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING DEFERRED COMPENSATION
PLAN AGREEMENT WITH GREAT WESTERN SAVINGS
The City Council of the City of Chula Vista does hereby
resolve as follows:
WHEREAS, on July 23, 1974, the City Council approved a
Deferred Compensation Plan for the City of Chula Vista, and
WHEREAS, the City desires to utilize Great Western
Savings in the performance of certain services in connection with
the administration of the Plan.
NOW, THEREFORE, BE IT RESOLVED that the City Council of
the City of Chula Vista does approve that certain Deferred
Compensation Plan Agreement between Great Western Savings, a
Federal Savings and Loan Association, and the City of Chula
Vista, effective the 1st day of November, 1986, a copy of which
is attached hereto and incorporated herein by reference as if set
forth in full.
BE IT FURTHER RESOLVED that the Mayor of the City of
Chula Vista be, and he is hereby authorized and directed to
execute said Agreement for and on behalf of the City of Chula
Vista.
Presented by Approved as to form by
ny~n'Ch~istoph~r, Director oi ~ ~omas' J. ~a/~on, city Attorney
Finance '~ ~"
2090a
DEFERRED COMPENSATION PLAN AGREEMENT
This Agreement is effective this lst.day of November~ 1986~ by and between
GREAT WESTERN SAVINGS, a Federal s~v~ngs-'ah~L~an as~6~q~ion, hereinafter
referred to as GREAT WESTERN, and CITY OF CHULA VISTA, 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. TERN: 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. TERNINATION: 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 GRE~ WESTERN, subject to
penalty for early withdrawal, shall be lsbursed according to
written instructions from AGENCY. Mutual Fund shares shall be
disbursed as mutually agreed in writing by AGENCY and GREAT
WESTERN.
GREAT IArESTERN 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. Mu%ual 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 da s of r ' .
. Y ecelpt of deferra ' tln~ ~
accoraance w . . ? ~, in
GREAT WESTE~h the latest written instructions on file with
(2)
GRF, AT 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 partlclpant 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 fr .........
such form and with such ' ~L ~, in
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 W SI RN SAVINGS
!~- GREAT WESTERN agrees to withhold appropriate Federal and State income
tax~,.according to.instructions set forth on form W-4
participant, to remit such wlthh~ ....... completed by the
to issue net funds t~ ~=~-~'~ ~ pr?p~r ~axlng authorities a~
- ~~nu(s) or benefIciary(s) in accordance'wi
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 ahd 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_e~c~ive, on t~e first day of each calendar month. The rate shall
be es~ao£1sned Dy 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)
GII tT 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 mbnthly 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($1,O00).
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:O0
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.
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.
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 conte~ A_ _~. ~ . .
maintenance of ~ ~-~ ...... '~'P~ ~ faulcu±e, or pre3Udlce the
employees. = ....... m~=~ ~mp~oyee relationship between AGENCY and
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 ommltted by AGENCY or its employees. GREAT
c '
WESTERN shall not be liable for investment performance, except as
.~ expressly provided for in this Agreement.
(6)
GREAT WESTlgRN 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.O0) 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
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: GREA~WESTERN SAVINGS
Deferred Compensation Department
P.O. Box 6350
Northridge, California 91328
If to AGENCY: CITY OF CHULA VISTA
276 Fourth Avenue
Chula Vista, CA 92010
Attention: Lyman Christopher
Director of Finance
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective on the date first above written.
~GENCY GREAT WESTERN
By:. ~ By
~ ~ Edwin C. Brunton
Vice President
Great Western Savings
(8)
R I':TI R l':.~l ENI'
COR PORAI'IO~'~j
Fund Managers
Variable Funds
Stock F~nd: Fidelity Management Trust - Fidelity Magellan,
Boston, Massachusetts
Investors Research Corporation - Twentieth
Century Select, Kansas City, Missouri
Newboldts Asset Mangement, Philadelphia
Pennsylvania
Balanced Fund: Invesco Capital, Atlanta, Georgia
Forstman-Leff Associates, New York
Investment Counselors of Maryland, Baltimore
Bond Fund: American Security Bank, Washington, DC
Dewey Square Investors, Boston, Massachusetts
Lowe, Brockenbrough, Tierney and Tattersall,
Richmond, Virginia
Guaranteed Fund Underwriters
John Hancock Mutual Life Insurance Company, Boston, Massachusetts
New York Life Insurance Company, New York
The Prudential Insurance Company of America, Newark, New Jersey
~?ransamerica Life Insurance and Annuity Company, Los Angeles, California
£he Travelers Life Insurance Company, Hartford, Connecticut
See reverse side for historic performance information
,, ~XlA EXHIBIT A
i ' ' ' ' ' .. '. , - '" ~ REWIREMENT
..... ~:" Variable Funds
~11 returns are net of fees.
I Stock** Balanced Bond
1975 50.3% 4.23% 4.42%
1976 32.0 14.31 9.39
1976'** -- 9.75 5.07
1977 20.5 (2.61) 3.56
1978 34.8 4.07 2.98
1979 49.6 17.50 6 37
1980 58.9 25.00 7 76
1981 8.9 (4.84) 9 70
1982 45.3 21.55 26 76
1983 28.7 9.5? 5 39
1984 (3.0) 2.11 10 81
1985 36.1 28.00 19 32
1986 thru July 21.51 15.11 9 04
* Investunent performance for the funds as they are currently managed
began in 1975.
** The Stock Fund's historic performance prior to April 1983 is based
on actual performance of the 20th Century Select Investors and
Fidelity Magellan mutual funds.
'** The 10-month period ending December 31, 1976, which occurred when
our fiscal year end was changed from February 28 to December 31.
Guaranteed Fund
~elow are the net interest credits for the IC~A-RC Guaranteed Funds:
Deposit
Period 1983 1984 1985 1986 1987 1988 1989 1990 1991
7/79-9/81 13.0% 13.0% 13.0% 13 0% 13.0% 13.0%*
10/81-6/82 14.0% 14.0% 14.0% 14 0% 14.0%*
7/82-6/83 15.25% 15.25% 15.25% 15 25% 15.25%*
7/83-12/83 11.0% 11.0% 11.0% 11 0%*
1/84-2/85 11.75% 11.75% 11 75% 11.75% 11.75% 11.75%*
3/85-7/85 11.5% 11 5% 11.5%*
8/85-12/85 10.5% 10 5% 10.5%*
~/86-3/86 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%*
~/86-6/86 7.25% 7.25% 7.25%*
~/86-9/86 7.35% 7.35% 7.35% 7.35%*
~ * At the maturity of each contract, RC will receive the book value,
plus earnings, and will reinvest those funds with the insurance company
offering the highest and best guarantee at that time. Participants
will have the following options:
A. Leave funds in the Guaranteed Fund at the new guaranteed rate.
B. Transfer all or part of the funds to another investment option
offered by RC.
See reverse side for a list of fund v~nagers