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HomeMy WebLinkAboutReso 1984-11590 RESOLUTION NO. 11590 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AMENDED DEFERRED COMPENSATION PLAN The City Council of the City of Chula Vista does hereby resolve as follows: WHEREAS, on February 18, 1975, the City Council approved a Deferred Compensation Plan for the City of Chula Vista, and WHEREAS, the only changes to the Plan have been to amend Articles V and VI providing for "changes to enrollment", and WHEREAS, the proposed amended Deferred Compensation Plan updates our entire plan to conform to the latest IRS regulations and is attached hereto as Exhibit "A" and incorporated herein by reference as if set forth in full. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby approve the Amended Deferred Compensation Plan attached hereto. Presented by Approved as to form by ~ftnkl~ector of Finance . ,A / . .\'., /'1' /'/))' ,'/,. -....../ ,.) "J > -.{. /... ..~' . ',~ '-- .e{ , / T.homas J. Harron, City Attorney .' ADOPTED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF IULA VISTA, CALIFORNIA, this 10th day of April 84 ,by the following vote, to_it: Cox, Moore, McCandliss, Scott, Malcolm 'ES: Councilmen IYES: Councilmen ISTAIN: Comcilmen ISENT: Councilmen None None None TE~>>/// -;bNjf;h;j- City Clerk ATE OF CALIFORNIA ) IUNTY OF SAN DIEGO ) ss. oy OF CHULA VISTA ) I, JENNIE M. FULASZ, CMC, CITY CLERK of the City of Chula Vista, California, I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 11590 ,and that the same has not been amended or repealed. ,TED (sear) City Clerk ;-660 ARTICLES OF THE CITY OF CHULA VISTA DEFERRED COMPENSATION PLAN ARTICLE I. NAME The name of this plan is the City of Chula Vista Deferred Compensation Plan (hereinafter referred to as the "Plan"). ARTICLE II. PURPOSE The primary purpose of the Plan is to attract and hold personnel by permitting them to enter into agreements with the City of Chula Vista which will provide future payments in lieu of deferred current income upon death, disability, retirement, or other termination of employment. The Plan is intended to qualify as an eligible State Deferred Compensation Plan within the meaning of Section 457 of the Internal Revenue Code of 1954, as amended, hereinafter referred to as the "Code." ARTICLE III. DEFINITIONS For the purposes of this Plan, certain words or phrases used herein will have the following meanings: A. "EMPLOYER" shall mean the City of Chula Vista. B. "PARTICIPANT" shall mean an employee who has elected to participate in the PLAN. Only individuals who fulfill the requirements of enrollment and perform service for the EMPLOYER may be PARTICIPANTS. C. "PARTICIPATION AGREEMENT" shall mean the agreement executed and filed by an employee with the EMPLOYER, pursuant to Article VI.A, in which the employee elects to become a PARTICIPANT in the PLAN. D. "DIRECTOR" shall mean the City Manager of the City of Chula Vista, or his successors or his designee(s). E. "COMPENSATION" shall mean the salary or wages which would be paid by the EMPLOYER to or for the benefit of an employee, if he were not a PARTICIPANT in the PLAN, for actual services performed. F. "INCLUDABLE COMPENSATION" shall mean COt~PENSATION received from the EMPLOYER that is attributable to service performed for the EMPLOYER and that is includable in the PARTICIPANT'S gross income for the taxable year. Accordingly, a PARTICIPANT'S INCLUDABLE COMPENSATION for a taxable year does not include any amount payable by the EMPLOYER that is excludable from the PARTICIPANT'S gross income under Section 457, Section 403(b), Section 105(d), or Section 911 of the CODE. A PARTICIPANT'S INCLUDABLE COMPENSATION for a taxable year is determined without regard to any community property laws. K-//.5-YC7 G. "DEFERRED COMPENSATION" shall mean the amount of COMPENSATION which the PARTICIPANT and the EMPLOYER mutually agree shall be deferred in accordance with the provisions of this PLAN. H. "DISABILITY" means the inability of a PARTICIPANT to engage in his usual occupation by reason of a medically determinable physical or mental impairment as determined by the EMPLOYER on the basis of advice from a physician or physicians. 1. "NORMAL RETIREMENT AGE" for "LOCAL MISCELLANEOUS MEMBERS" under the Pub 1 ic Emp 1 oyee Ret irement System, us ing the 2% at 60 formu 1 a, sha 11 mean the range of ages ending no later than 70-1/2 and beginning no earlier than age 63. The endi ng age for "LOCAL SAFETY MEMBERS" under the Public Employees Retirement System is also 70-1/2, but the beginning age is 55 using the 1/2 pay at age 55 formula or the 2% at 50 formula. In the case of a PARTICIPANT who continues to work beyond these ages, NORMAL RETIREMENT AGE shall be that date or age designated by the PARTICIPANT, but such date or age shall not be later than the date or age at which the PARTICIPANT separates from the service with the EMPLOYER. J. "TERMINATION OF EMPLOYMENT" shall mean the severance of the PARTICIPANT'S employment with the EMPLOYER prior to retirement. K. "DISTRIBUTION EVENT" shall mean the date the PARTICIPANT 1) retires; 2) terminates employment; 3) terminates employment due to disability; 4) requests an emergency withdrawal or; 5) dies. ARTICLE IV. ADMINISTRATION The Director shall have full authority to adopt rules and regulations for the administration of the Plan and to interpret, alter, amend or revoke any rules and regulations so adopted. ARTICLE V. ELIGIBILITY All employees of the City, excepting any class of employees who are designated by the Director as being ineligible, may become Participants in this Plan. ARTICLE VI. ENROLLMENT The conditions of enrollment in the PLAN shall be as follows: A. Any eligible employee may become a Participant in the Plan by executing and delivering to the Employer a written Participation Agreement. B. Compensation shall be deferred for any pay period only if a Participation Agreement providing for such deferral has been entered into and is effective before the beginning of the month in which the pay period commences; i.e. if the pay period commences in July, the Participation Agreement must be dated no later than June 30. -2- /<-II~?!/ C. The Participation Agreement shall state the amount of compensation to be deferred pursuant to the Plan, which shall not exceed the amounts provided in Article IX below. A Participant must agree to defer an amount not less than $12.00 bi-week1y. ARTICLE VII. CHANGE IN ENROLLMENT Any change in enrollment shall be made on forms approved by the City and shall be effective the first pay period beginning in the month subsequent to the month of request. ARTICLE VIII. REVOCATION A Participant may revoke his Participation Agreement by filing with the Employer an executed written notice of revocation. In the event a revocation has been filed, no further Compensation shall be deferred hereunder commencing as of the first pay period that commences at least thirty (30) days after such notice is delivered to the Employer, and continuing until the employee executes and delivers a new Participation Agreement in accordance with Article VI.A. No amounts shall be payable to an employee upon revocation of his Participation Agreement unless otherwise due pursuant to Article XIII. ARTICLE IX. DEFERRAL OF COMPENSATION A. For each month in which a Participation Agreement of an employee is in effect, the Employer shall not pay the employee his full Compensation but shall defer payment of such part of his Compensation as is specified by the employee in the Participation Agreement. B. Except as provided in Article IX.C, the maximum amount that may be deferred under the Plan for any taxable year of a Participant shall not exceed the lesser of: 1) $7,500, or 2) 33-1/31 of the Participant's Includible Compensation for the taxable year, reduced by any amount exc1 udab 1 e from the Part icipant' s gross income for the taxable year under Section 403(b) of the Code. Similarly, if the Employer contributes additional amounts into the Plan, the maximum amount that may be deferred by the Participant shall be reduced by the amount of the Employer's contribution. C. For anyone or more of a Participant's last three (3) taxable years ending before such Participant attains Normal Retirement Age, the maximum amount that may be deferred under the Plan for any taxable year of the Participant shall not exceed the lesser of $15,000 or the sum of the maximum amount that could be deferred for such taxable year under Article IX.B above, without regard to this Article, plus so much of the maximum amount that could be deferred for all prior taxable years under Article IX.B above, without regard to this Article, as has not theretofore been deferred. In no event may the amount of Deferred Compensation for the year exceed the total amount of Compensat ion for the year. A pri or -3- /i-II5'lP taxable year can be taken into account only if such taxable year begins after December 31, 1978, the Participant was eligible to participate in the Plan durin9 all or any portion of the taxable year, and the amount of Compensation deferred under the Plan during the taxable year was subject to a ceiling required by Section 457 of the Code. A prior taxable year includes a taxable year in which the Participant was eligible to participate in an eligible plan sponsored by a different entity, provided that the entities sponsoring the plans are located within the same State. ARTICLE X. INVESTMENT Subject to the provlslons of the Charter of the City of Chu1a Vista, Section 16431 of the Government Code and Article XIII 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 Participants. A. Such investments shall be made in accordance with the requests made by each Participant at the time a Participation Agreement is executed and delivered to the Employer. 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 participation with respect to the Plan. 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 XIV 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 disappointing results, or loss, flowing from any shortcomings in this regard. ARTICLE XI. OWNERSHIP AND INVESTMENT The City shall have the sole ownership of all investments made pursuant to this Plan and no 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 Counci 1 ut i 1 ize 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 -4- f?-;/.JftJ 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 investment effective as of the time of substitut ion. Notwithstanding the foregoing, a Participant shall have a right to request a change in investments by executing and delivering a new Participation Agreement to the Employer subject to approval pursuant to Article X.B. ARTICLE XII. PARTICIPANTS ACCOUNTS Subject to the provisions of Article X, an investment may be made in any medium approved by the City, 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 of any of the foregoing, the City may enter into contracts with firms, corporations, or investment institutions to facilitate or accomplish such investments. All such investments 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 statements 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, dividents or other proceeds flowing from his accumulation. O. The balance of such Participant's account. ARTICLE XIII. DISTRIBUTION OF BENEFITS Distribution of benefits to each Participant shall commence not later than sixty (60) days after the end of the calendar year following a distribution event unless the Participant has submitted written notification to the Employer, prior to the time any amount becomes payable, requesting deferral of distributions. The mode of distribution may be elected and changed by the Participant up to thirty (30) days prior to the date on which the distribution is to be made or is to commence at which date the election is irrevocable. A Participant who elects a mode of distribution after such date will be deemed to be in constructive receipt of the sum of all amounts deferred. In the event a distribution event occurs prior to the date the Participant attains Normal Retirement Age, the Participant may irrevocably elect, prior to the time any amounts become payable, to defer payment of such amounts until such time as the Participant attains Normal Retirement Age. -5- ;<-/IS7[) A. Retirement: In the event of retirement, the amount credited to the Participant's account shall be distributed to him in anyone or more of the methods stated in Article XIV. B. Termination of Employment: In the event of the Part icipant' s termination of emp loyment with the Employer all amounts credited to the Participant's account shall be distributed to him in anyone or more of the methods as stated in Article XIV. C. Disability: In the event of termination of employment by reason of disability, distribution of all amounts in the Participant's account shall be distributed to him in anyone or more of the methods as stated in Article XIV. D. Death: In the event of the death of the Participant all amounts credited to his account shall be distributed to the named beneficiary(ies) or estate over a period not greater than: 1. The life expectancy of the beneficiary, if the beneficiary is the Participant's surviving spouse, or 2. Fifteen (15) years, if the beneficiary is not the Participant's surviving spouse. ARTICLE XIV. MODE OF DISTRIBUTION A. All funds credited to a Participant's account shall be distributed by any one or more of the following methods: 1. In a lump sum. 2. In consecutive periodic payments monthly, quarterly, semi-annually or annually over a period of years from the date distribution began, not to exceed his life expectancy. 3. In monthly, quarterly, semi-annual or annual installments over the life expectancy of the Participant, or Participant and his spouse. Life expectancy shall be actuarialy determined by the Employer based on the date the initial distribution shall begin. B. 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 and to choose another method of distribution permitted by this Article. -6- /l,... //s-ftJ C. Amounts distributed each year, beginning with the taxable year in which the Participant attains age 70-1/2 or, if later, the taxable year in which payments commence, shall not be 1 ess than the lesser of the balance of amounts deferred or an amount equal to the quotient obtained by dividing the balance of amounts deferred at the beginning of such year by the life expectancy of the Participant or the joint life expectancy of the Participant and the Participant's spouse, as applicable, determined as of the date the Part icipant attains age 70 and reduced by one for each taxable year commencing after the Participant attains age 70-1/2. [Generally, this means that commencing after age 70-1/2 but prior to the 1 ife expectancy of the Participant or the joint 1 ife expectancy of the Participant and the Participant's spouse, at least one-half (1/2) of the Participant's account balance must have been distributed.] ARTICLE XV. LEAVE OF ABSENCE A. Approved leave of absence with pay shall not 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 automatically reinstated as of the first day of the next pay period subsequent to the termination of the leave of absence status. ARTICLE XVI. WITHDRAWAL FOR EMERGENCIES If a Participant is faced with an unforeseeable emergency, the Participant may apply to the Employer for withdrawal of funds from the Plan. Such withdrawals shall be permitted, in the Employer's discretion, only in circumstances of an unforeseeable emergency. An unforeseeable emergency is severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent of the Participant, loss of the Participant's property due to casualty, or other s imil ar extraordi nary and unforeseeab le circumstances arising as a result of events beyond the control of the Participant. The circumstances that will constitute an unforeseeable emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved by: 1. Reimbursement or compensation by insurance or otherwise, 2. Liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or 3. Cessation of deferrals under the Plan. Withdrawals of amounts due to an unforeseeable emergency shall only be permitted to the extent reasonably needed to satisfy the emergency need. -7- Il ~ /1590 ARTICLE XVII. ADMINISTRATIVE COSTS The Director shall determine in a manner deemed fair and equitable to himself the cost to the Finance Department or 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 investment, 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 organization 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 XVIII. PLAN TO PLAN TRANSFERS A. The Employer shall accept funds from other eligible State Deferred Compensation Plans established pursuant to Section 457 of the Code to be transferred and added to the Participant's account within the Plan provided that all of the following conditions exist: 1. The funds so transferred were deferred by the Participant from Compensation while employed by a political subdivision residing in the same State as the Employer, and; 2. The funds so transferred are from a plan that provides that if the Participant separates from service in order to accept employment with another such ent ity, payout wi 11 not commence upon separat ion from service, regardless of any other provision of the Plan, and amounts previously deferred will automatically be transferred. B. Amounts deferred by a former Participant shall be transferred to another eligible plan of which the former Participant has become a participant provided that the other plan is sponsored by an entity within the same State as the Employer and the plan receiving such amounts provides for the acceptance of the amounts. C. Regardless of any other provision of the Plan, if the Participant separates from service with the Employer in order to accept employment with another such entity, payout wi 11 not commence upon separation from service and amounts previously deferred will automatically be transferred. -8- ~-115'lf) ARTICLE XIX. AMENDMENT OR TERMINATION OF PLAN The Employer may, at any time, terminate this Plan for all Participants. Upon such termination, each Participant in the Plan will be deemed to have revoked his Participation Agreement as of the date of such termintion. The Employer may also amend the frovisions of this Plan at any time; provided, however, that no amendment sha 1 affect the rights of the 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 income attributable to such Deferred Compensation prior to and subsequent to the amendment. This Plan is intended to qualify as an eligible State Deferred Compensation Plan under Section 457 of the Code, and shall be interpreted and administered in a manner cons i stent with such qual ificat ion. The Emp loyer reserves the right to amend the Plan to the extent that may be necessary to conform the Plan to the requirements of Section 457 of the Code and any other applicable law, regulation or ruling, including amendments that are retroactive to the effect ive date of the Pl an. I n the event that the Plan is deemed by the Internal Revenue Service to be administered in a manner inconsistent with Section 457 of the Code, the Employer shall correct such administration within the period provided in Section 457 of the Code. The Employer reserves the right to take such action and do such things as are required to make the Plan, as administered, consistent with Section 457 of the Code. ARTICLE XX. NONASSIGNABILITY It is agreed that neither the Participant nor his beneficiary nor any other designee shall have any right to commute, sell, assign, transfer or otherwise convey the right to receive any payments hereunder 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 Participant in writing shall be deemed to constitute a revocation by the Participant pursuant to Article VIII. Except as otherwise required by law notwithstanding this provision, any compensation deferred or benefits paid pursuant to thi s Pl an shall not be subject to attachment, garni shment, or execution, or to transfer by operation of law in the event of bankruptcy, insolvency, or desolution of marriage. ARTICLE XXI. MISCELLANEOUS A. Amounts deferred under a State Deferred Compensation Plan in taxable years beginning before January 1, 1979, are hereby made a part of his Plan. B. The Plan shall allow the redirection of past deferrals as well as current deferrals, as applicable, into different investment modes available within the Plan. The redirection of such amounts may occur before or after payments have commenced under the Plan. C. Compensation deferred under this Plan shall be taken into account at its value in the Plan year in which deferred. -9- l<-j/S7tJ ARTICLE XXII. COMMUNICATION Any notice, filing or communication directed to the Employer shall be mailed or delivered to the following address: City of Chula Vista 276 Fourth Avenue Chula Vista, CA 92010 Attention: Finance Department Any notice or communication directed to any Participant shall be mailed or delivered to the address provided in his Participation Agreement. ARTICLE XXIII. COPIES OF THIS PLAN A copy of this Plan shall be made available to each eligible employee prior to his participation in the Plan. The Employer hereby establishes this Deferred Compensation Plan on the terms and conditions set forth herein. Date: April 10, 1984 APPROVED, AS TO FORM: , \ -/'/ ,;/ '" ,/ /, ') _ I ~ 'f -_./'~ < ----; ,I i{ / II ~'{, J'--r:A ( I c?: (Lega I bunse 1 ) WPC 0146G -10- ;r(-/IS9P