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HomeMy WebLinkAboutReso 1974-7380 RESOLUTION NO. 7380 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE DEFBRRED COMPENSATION PLAN FOR FULL-TIME UNCLASSIFIED BMPLOYEES AND AUTHORIZING ITS IMPLEMENTATION The City Council of the City of Chula vista does hereby resolve as follows: WHEREAS, the City Council has heretofore authorized the City Manager to review and select a deferred compensation plan for the full-time unclassified service employees who would wish to par- ticipate in such a program, and WHEREAS, it is recommended that the plan offered by Great Western Savings and Loan Association be accepted, and WHEREAS, it is now necessary for the City Council to approve said plan in order to forward the plan to the Internal Revenue Service for their review and approval, and WHEREAS, if the plan, attached hereto as Exhibit "A", is approved by the Internal RevenUe Service, it would become ef- fective January 1, 1975. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula vista that the City of Chula Vista Deferred Conpensation plan presented herewith be, and the same is hereby approved and adopted, and the Mayor be, and he is hereby autho- rized 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 FURTHER RESOLVED that the City Manager, the Assis- tant City Manager 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 z:: k/ , k--~~ 4l.c~/ Gordon K. Grant, Director of Finance ]\I)()L"l'l~D l\ND M'PHOVED BY 1'llE CI'l'Y COUNCIL OF 'I'llE CITY OF CllULA VI,51'}\, CALIFOHNIA, this 23rd day of July 1974, by the followi~g vote, to-wit: l~YES : CUIU1 (O.<..t/llLr1 Hobel, Hamilton, Hyde, Egdahl, Scott NlIYES: . CUILI1c.{..tmen None ABSENT: Co un (O.i..tmeJ1 None ~~.~Q' May Oil 0 t -th eC.<..J:.Y 06 chued. 11.<.." J:.ee ;:2 . 1; ~ id." AT'l)E.~s'r. :/'1.7t-tKj Z \. j' j/ .// " C.tty .tellR STATE OF CALIFORNIA l COUNTY OF SAN DIEGO l 55. CITY OF CHULA VISTA l 1, JENNIE M. fULASZ, C.<..ty Cle4k 06 the city 06 Chuia V~hta, Cal-i.601tn-i.a., VO HEREBY CERTIFY that thec.bove a.nd 60Jtl!..goLVlg Lo a 6u.t.t, ~4ue and cOllllec;t'copy 06 and that the .6 ame 11M not beelt amended 011. itepe.ated. VATEV: C ,t-!: y U. liJl tI. ~ <~ ~~Sf(J DEFERRED COMPENSATION PROGRAM CUSTODIAL AGREEMENT The City of Chula Vista, "CITY" pursuant to Resolution No. 7'Uln of the Council of said City adopted July 23. 1974 , as amended by Resolution No. adopted _ , has established an Employees' Deferred Compensation Plan ("PLAN"), a copy of which is attached hereto, marked Exhibit "A", and in- corporated herein by such reference. The PLAN applies to those employees who execute a participation agreement ("PARTICIPANT") in accordance with the PLAN and file it with the City Treasurer. Great Western Savings and Loan Association ("GREAT WESTERN") is a California corporation operating as a savings and loan asso- ciation pursuant to Federal and California law and regulation. This Agreement sets forth the manner by which the City will invest PLAN funds with GREAT WESTERN, and GREAT WESTERN, in accordance with the requirements of laws and regulations of the State of California and the United States, will accept such funds for investment and will account for such funds on a regular basis. 1. GREAT WESTERN agrees to accept for investment, funds sent to GREAT WESTERN by the City in accordance with the PLAN, and to establish and administer the accounts in accordance with the pro- visions of this Agreement. All earnings shall be reinvested to the master account(s) in accordance with prevailing practice. 2. The City shall have the same rights and obligations in connection with any of such invested funds as any other savings or account holder having the same type of savings account with GREAT WESTERN. 3. On a semi-monthly basis, the City will prepare one check representing the total amount of deferments for the period applicable for PARTICIPANTS in the PLAN, a list indicating to whom these defer- ments should be attributed and the amount to be invested in each account. Said items will be sent promptly to GREAT WESTERN, which upon receipt thereof will promptly make the appropriate credits to the applicable accounts. Any earnings on such accounts shall be automatically credited to each of the described accounts in accordance with prevailing practice at GREAT ,mSTERN. 4. The accounts established under this agreement will be titled: City of Chula Vista Deferred Compensation Plan, dated July 9, 1974. The title and ownership of all such accounts shall be vested in the City. The City Treasurer shall have the sole custody of all pass- books or other indices of ownerShip of said accounts and no addi- tions or withdrawal of funds shall be made in or from such accounts except by the City. '~l'?" '6....../.21) 5. The types of accounts to be established under this Agreement and the interest rates to be paid thereunder shall be selected by the City from those accounts which are offered to the general pub lic as au thori zed by GREAT WESTERN's Board of Directors, as shown on the attached chart of accounts which is marked Exhibit "A". Said list sets forth the present rates and terms being offered by GREAT WESTERN. It is underst,ood and agreed that the term, interest rates and other provisions of said accounts may, from time to time, change by virtue of changes in governmental regulations, market conditions and policies adopted by GREAT WESTERN's Board of Directors. 6. Within 10 business quarter, GREAT WESTERN will each account in duplicate. in each account during said the City. days after the end of each calendar prepare a statement of activity on This statement will recap all activity quarter. Two copies will be sent to 7. GREAT WESTERN will disburse funds from the applicable account or accounts solely as directed by the City. 8. In the event the City shall make any written presentation to its employees describing the plan and setting forth the investment options or in the event the City shall conduct any educational meetings or programs for the same purpose, GREAT WESTERN shall have the right to participate in such presentation provided GREAT WESTERN shall bear the costs incurred by virtue of its participation. 9. Privity of Contract. GREAT WESTERN shall not have privity of contract with the PARTICIPANTS of the plan. Great Western shall not be required to accept or honor any instructions that may be submitted by any PARTICIPANT or to provide any information regarding the account or any transactions of any kind except upon the written instruction of the City or as required by law. 10. This Agreement may be terminated at any time by either party hereto upon six (6) months advance notice in writing to the other party. 11. Except as hereinafter provided any written notice and state- ment to be given by one party to the other party hereunder must be sent by First Class mail, postage prepaid. Notice to the City shall be addressed as follows: City of Chula Vista P. O. Box 1087 Chula Vista, California 92012 Attention: City Treasurer '~/1J'id. DEFERRED COMPENSATION PLAN ADOPTION AGREEMENT THIS AGREEMENT, made by and between the CITY OF CHULA VISTA, hereinafter referred to as "Employer" and , hereinafter referred to as "Adopting Employee", WHEREAS, the Employer has established the "CITY OF CHULA VISTA, CALIFORNIA DEFERRED COMPENSATION PLAN", hereinafter referred to as "Plan" for the benefit of its employees, and WHEREAS, the Plan provides that any employee, subject to the limitations established in the Plan of the Employer, may elect to join and become a Member of the Plan on executing and filing with the Employer an Adoption Agreement, and WHEREAS, the Adopting Employee desires to join and become a Member of the Plan, NOW, THEREFORE, the Employer and the adopting Employee agree as follows: 1. The Employer has provided the Adopting Employee with a current copy of the Plan. 2. The Adopting Employee hereby elects to become a Member of the Plan and to defer payments pursuant to the Plan as follows: a. Amount of monthly compensation: $ (not less than $20 per month) -------'. -r 71:ro \DOPTION AGREEMENT - Page 2 b. Compensation for accrued vacation benefits to be set aside as deferred compensation at retire- ment only: $ The Adopting Employee agrees that his rights to the deferred =ompensation shall be governed by all terms and conditions of the Plan. 3. Compensation deferred under Section 2b above shall be Joverned by the fOllowing additional conditions: a. Adopting Employee shall not have the right to said accrued vacation benefits prior to retire- ment. b. The Employer will pay benefits to Adopting Employee in installments over a period not to exceed the life expectancy of Adopting Employee. c. The Employer shall retain ownership of amounts de- ferred until paid to Adopting Employee. d. The amount of deferred compensation to which employee shall be entitled under this Section shall be measured at any time by the market value of investments made pursuant to Section 4 hereof. 4. The Adopting Employee designates his investment objec- ;ives to be interest time deposits in local savings and loan or banking Lnstitution and requests the Employer to invest the deferred compensation :unds accordingly. 7~ illOPTION AGREEMENT - Page 3 5. The Adopting Employee designated the following persons 1S his Beneficiaries to receive, in the event of his death, any benefits to which he is entitled under the Plan: Name of Beneficiary Address of Beneficiary 1. 2. 3." 4. If more than one person is named as a Beneficiary, any payments to which they may be entitled shall be paid as follows: (Choose one) In equal shares, to such of the designated persons, survivor, or survivors, as shall then be living, or Wholly to the first designated person who survives me I hereby reserve the right to change or revoke this Bene- ficiary designation without notice to any Beneficiary. Dated: , 19 . CITY OF CHULA VISTA EMPLOYER By Its City Manager r-~~ 13f(! DOPTION AGREEMENT - Page 4 ADOPTING EMPLOYEE I hereby agree to the designation of Beneficiary as shown move. SPOUSE OF ADOPTING EMPLOYEE ~< 73~O /f. , - i CITY OF CHULA VISTA, CALIFORNIA DEFERRED COMPENSATION PLAN ECTION 1. NAME: The name of this plan is the City of Chula vista, California Deferred Compensation Plan (hereinafter referred to as the plan). ECTION 2. PURPOSE: The primary purpose of the Plan is to attract and hold key personnel by permitting them to enter into agree- ments 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 with the City of Chula Vista, California. ;ECTION 3. DEFINITIONS: For the purposes of this Plan certain words or phrases used herein will have the following meanings: 3.l "Employer" shall be the City of Chula Vista, California. 3.2 "Employee" shall mean the Employer Mayor and councilmen, and such full-time city employees as designated by official City Council action in the form of a resolution. 3.3 "Participant" shall mean any employee who fulfills the requirements of enrollment into this plan. 3.4 "Participation Agreement" shall mean the agreement executed and filed by an employee with the employer pursuant to Section 4, in which the employee elects to become a participant in the plan. 3.5 "Compensation" shall mean the total of all amounts 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 for the period that he is a participant. 3.6 "Employment period" means a period from January 1 to December 31, except that the first year of an employee hired in mid-period shall be a short period beginning with the date of employment and ending on December 31. 3.7 "Disability" means the inability of a participant to engage in his usual occupation by reason of a medi- cally determinable physical or mental impairment as determined by the Employer on the basis of advice from a physician or physicians. ~. 1)/ 7.J3'U I I ~ERRED COMPENSATION PLAN - Page 2 3.8 "Normal Retirement" shall mean a retirement from service with the Employer which becomes effective on the first day of the calendar month after Participant meets the age and service requirements for normal retirement specified in the Retirement Plan for the employees of the Employer. 3.9 "Late Retirement" shall mean a retirement from service with the Employer which becomes effective after the Participant has extended the normal retire- ment specified in the Retirement Plan for the employees of the Employer. ECTION 4. PARTICIPATION IN THE PLAN: 4.1 Each employee may elect to become a participant of the Plan and defer pa~nent of part of his compensa- tion by executing a written Participation Agreement and (a) filing it with the Employer no later than the day before the beginning of any employment period; or (b) for the first year in which a new employee is eligible, 30 days after' the hiring date of the new employee. 4.2 A Participation Agreement shall be effective for the first employment period following its execution and filing, except when it is executed and filed pursuant to Section 4.1 (b), in which case it shall be effec- tive for that part of the employment period following its execution and filing. In either situation, the Participation Agreement shall continue from period to period and remain in full force and effect unless terminated as provided in Section 4.3 below. 4.3 A participant may terminate his participation in the Plan and thereby terminate' further deferral of his compensation by filing with the Employer an executed written notice of termination at least 30 days prior to effective date of termination. Once terminated, a former participant cannot rejoin the Plan during the employment period in which termination occurred; however, he may elect to become a participant in subsequent employment periods. No amounts shall be payable to an employee upon terminating his partici- pation in the Plan unless otherwise due pursuant to Section 7. '--) . 1) 750'?(} EFERRED COMPENSATION PLAN - Page 3 ECTION 5. 4.4 A participant may select pursuant to Section 6, one or more investment objectives provided that the amount deferred for each objective equals or exceeds the minimum of not less than $10 per semi-monthly pay period. DEFERRAL OF COMPENSATION: During each employment period in which the employee is a participant in the Plan, 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 Agree- ment which he has executed and filed with the Employer. Compensation may be deferred in equal amounts over each pay period, or in total in either pay period so designated by the participant. :ECTION 6. ADMINISTRATION OF THE PLAN: 6.1 The Plan shall be administered by the Employer, who shall have the sole authority to enforce the Plan and shall be responsible for the operation of the Plan in accordance with its terms. The Employer shall determine the time, manner, and amount of payments of benefits pursuant to Section 7 and shall determine all questions arising out of the admin- istration, interpretation, and application of the Plan, which determinations shall be conclusive and binding on all persons; provided that the Employer unless there is a good reason to the contrary, will seek to accommodate participant's wishes in rendering such determinations. 6.2 The Employer shall establish a deferred compensation fund to which all deferred compensation will be credited at such times as the compensation would have been payable to individual employees if not a participant of the Plan. Separate book accounts will be estab- lished for each employee participant which will show all amounts of deferred compensation, investments made, shares acquired and earnings and gains on investments. Each book account will be valued at least annually on a method as outlined in Section 6.3. 6.3 On executing the Participation Agreement, the employee shall designate his investment objective. The employer will invest amounts of deferred compensation in mutual -1 '; 7' 'J<?-I) '\ /.---{I(", ~FERRED COMPENSATION PLAN - Page 4 fund shares, or interest time deposits with a local savings and loan company or banking institution, or investments with a local stockbroker, or a fixed/ variable annuity contract with an insurance company, whichever in the employer's sole judgment will best achieve the employee's objectives. 6.3(a) If a mutual fund is selected as the invest- ment vehicle, all dividends and capital gains distributions will be reinvested in shares of said mutual fund. The total of full or fractional mutual fund shares purchased or acquired through reinvestment shall serve as as basis for measuring the value of the par- ticipant's book account. Value will be the total number of full and fractional shares held times the net asset value per share reported by the fund on the valuation date. 6.3(b) If interest time deposits in local savings and loan or banking institutions is selected as the investment vehicle, interest earnings will be credited to the participant's book account when declared by the institution. Annual valuation will include all interest earned, whether paid or accrued. 6.3(c) If investments are selected, dividends and interest earnings will be credited to the City of Chula Vista Deferred Compensation Plan Investment Account with the stockbroker. The market value of all investments and cash in the account shall be determined on December 31st each year and each participant's share of the account shall be valued by any cash income, plus or minus any market action. New participants may join the Account after existing participants values are determined. 6.3(d) If a variable annuity contract is selected as the investment vehicle, the value of partici- pant's individual account during the Employ- ment Period shall be determined by the Insur- ance Company's Accumulation Unit, which is a statistical index of the net investment results ?~ :FERRED COMPENSATION PLAN - Page 5 of the Variable Contract Account. At retire- ment, the amount of annuity payments shall be determined by the Insurance Company's last Annuity Unit, which is a statistical index of the net investments results of the Variable Contract Account. 6.4 The Employer may, but is not required to, invest deferred compensation at least monthly in the investment vehicles provided for in this Plan. All amounts of deferred compensation, whether or not invested by the Employer, shall at all times be and remain an asset of the Employer. Any and all dividends, capital gains distributions, interest or other income payable on any of the Employer's investments of deferred compensa- tion also shall be an asset of the Employer. The Employer shall have the sole right to vote any shares of stock which it may acquire by such investment. 6.5 Neither this Plan nor any Participation Agreement nor any book account shall be deemed to create a trust or custodial account on behalf of or for the benefit of any participant of the Plan or his beneficiaries. No participant of the plan or his beneficiaries shall have, by reason of the Plan, Participation Agreement, or book account, any secured or preferred interest in or to any assets of the Employer. The Employer shall have only a contractual obligation to pay the benefits due the participant under the Plan. ECTION 7. DISTRIBUTION OF BENEFITS: 7.1 Retirement - In event of normal retirement or late retirement, the full benefits credited to partici- pant's book account plus or minus subsequent invest- ment gains or losses, but less any Federal or State Income Taxes required to be withheld, shall be distributed to him in anyone or more of the fol- lowing ways: 7.1(a) In a lump sum. 7.l(b) In monthly, quarterly, semi-annual or annual installments over a period not to exceed ten (10) years from date distribution began or over a period established by the Employer not greater than the life expectancy of the participant. Life'expectancy shall be ~) 15~O ~FERRED COMPENSATICN PLAN - Page 6 determined once by the Employer, on the date of the initial installment distribution. Install- ment distributions will be made in substan- tially equal pa~~ents, but no payment shall have a value of less than (the smaller of) $50 or the balance credited to the partici- pant's book account. The Employer shall select the method of distribution and shall make distribution by any of the foregoing methods or combinations thereof. Participant's book account balances will continue to be invested until -- in the employer's sole judgment -- cash is to be withdrawn for payment of benefits. Payment of benefits will commence not later than sixty (60) days following termination of employment, provided that in the event of lump sum payment the employer may elect to make payment not later than the first week of the calendar year succeeding the year of termination of employment. 7.2 Disability - In event of termination of employment by reason of disability distribution of benefits will be as provided in Section 7.1. 7.3 Other Termination - In event of termination of employ- ment for reason other than those specified in sections 7.1 and 7.2, then the full benefits credited to partic- ipant's book account plus or minus subsequent invest- ment gains or losses, but less any Federal or State income taxes required to be withheld, shall be dis- tributed to him in anyone or more of the following ways: 7.3(a} In a lump sum. 7.3(b} In monthly, quarterly, semi-annual, or annual installments of substantially equal payments over a period not to exceed seven (7) years from date distribution began, but no payment shall have a value of less than (the smaller of) $50 or the balance credit to the partici- pant's book account. 7.3(c} Postpone payments under 7.3(a} and (b) above until participant reaches his 50th, 60th, 65th birthday. ~) 77PJ 1> /..D' EFERRED COMPENSATION PLAN - Page 7 The Employer shall select the method of distribution and shall make distribution by any of the foregoing methods or combinations thereof. Participant's book account balances will continue to be invested until - in the Employer's sole judgment - cash is to be withdrawn for payment of benefits. Payment of lump sums or installments shall be made not later than the first week of the calendar years succeeding the year of termination of employment. 7.4 Death - In event of the death of any participant, either before or after termination of employment, then the full benefits credited to his book account, less any Federal or State Withholding Taxes required by law, shall be distributed to his beneficiaries in the manner designated in the participant's Partici- pation Agreement. The Employer shall make payment in lump sums not later than 60 days after death of the participant. 7.5 Other Distributions - Notwithstanding any other provisions of the Plan, the Employer, in its discretion, may at any time discharge in full its obligations under the Plan to any Participant by distributing to the Participant, or, following the death of the Participant by distributing to his Beneficiary, in cash or in kind, all amounts credited, contingently or otherwise, to the Participant's Investment Account. 7.6 Future Payment of Benefits - Notwithstanding the date of actual termination of employment set forth in Sections 7.1, 7.2 and 7.3, the Employer may specify that payments of benefits shall commence at a future date, which is not later than participant's age sixty-five (65) or, if earlier, the date of his death. SECTION 8. EMPLOYER PARTICIPATION: Notwithstanding any other provisions of this Plan, the Employer may make additional deposits in the deferred compensation fund as additional compensation for the services rendered by the employee to the Employer during an employment period. SECTION 9. NONASSIGNABILITY: Subject to Section 10, to the fullest extent permitted by law, the interest of a participant in the contractual obligation of the Employer, established by the Plan, shall not be assignable in whole or in part, directly or by operation of law or otherwise, in any manner and no right or interest of a participant in the Employer's --:1 -1 <</", I.. l_kU ~FERRED COMPENSATION PLAN - Page 8 contractual obligation shall be liable for or subject to any obligation or liability of such participant. ECTION 10. FACILITY OF PAYMENT: If any participant terminates his employment with an unpaid debt owing to the Employer, and neglects or refuses to liquidate the debt by any other means when due and upon demand, the Employer shall be entitled to collect the amounts due from the deferred compensation owed to the participant under the Plan. :ECTION 11. MISCELLANEOUS: 11.1 Status of Participants - Neither the establishment of the Plan nor any modification thereof, nor the establishment of any book account, nor the payment of any benefits, shall be construed as giving to any participant or other person any legal or equitable right against the Employer except as herein provided; and, in no event, shall the terms of employment of any employee or participant be modified or in any way affected hereby. 11.2 Condition of Plan - It is a condition of this Plan, and each employee by participating herein expressly agrees, that he shall look solely to the general assets of the Employer for the payment of any benefit to which he is entitled under the Plan. 11.3 Governing Law - This Plan shall be construed, admin- istered and enforced according to the laws of the State of California. 11.4 Designation of Beneficiaries - Each participant shall have the right, by written notice to the Employer, to designate beneficiaries to receive any benefit to which said participant may. be entitled in the event of his death prior to the complete distribution of benefits. If no such designation is in effect on a participant's death, his beneficiary shall be his estate or if no executor or administrator is appointed within six (6) months after the participant's death, the Employer shall direct said benefits to be paid to the heirs at law of the participant. SECTION 12. AMENDMENT AND TERMINATION 12.1 The Employer may at any time and from time to time modify, amend, or terminate the Plan in whole or in part (including retroactive amendments) or cease deferring ---..' \ t,'~;(t) FERRED COMPENSATION PLAN - Page 9 compensation pursuant to the Plan, by delivering to each participant a written copy of such modification, amendment, or termination or of a notice that it ceases deferring compensation; provided, however, the Employer shall not have the right to reduce or affect the value of any participant's book account or any rights accrued under the Plan prior to such modification, amendment, termination or cessation. 12.2 The Employer may at any time discharge in full its obligation under the Plan to any participant by distributing to any participant, or, following the death of a participant, to his beneficiary, all amounts credited to the participant's book account. 12.3 In the event of the termination of the Plan by the Employer under Section 12.1, the value of a partici- pant's or of each participant's book account shall be distributed to the participant or participants or their beneficiaries no later than 60 days after termination of the Plan. The amount, method, and time of payment shall be determined as provided in Section 7. I ! (~