2005-230RESOLUTION N0.2005R• 230
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM AMENDING
THE DEFERRED COMPENSATION PLAN FOR PART-TIME EMPLOYEES, AS LAST
AMENDED BY RESOLUTION 2004R-148.
WHEREAS, the City Treasurer has recommended in a staff report dated December 20, 2005, that
Resolution No. 91R-173, as last amended by Resolution 2004R-148, be amended to change the Deferred
Compensation Plan Document to reflect model language provided by Internal Revenue Service Revenue
Procedure 2004-56. The Revenue Procedure replaces existing final regulations and requires that
Employer plan documents be revised and adopted by December 31, 2005.
WHEREAS, as a result thereof, the need exists to amend Resolution 91R-173 which established
the City of Anaheim Deferred Compensation Plan (hereinafter called "Plan"), for part-time employees in
compliance with Section 457 of the Internal Revenue Code; and
~„~, WHEREAS, the City Council of the City of Anaheim does find that the aforementioned
amendment is in the best interests of the City of Anaheim;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Anaheim that the
Plan be amended and restated. A copy of the Plan as amended is attached as Exhibit "B".
BE IT FURTHER RESOLVED that the effective date of said amendment to Resolution No. 91R-
173 is December 31, 2005.
AND BE IT FURTHER RESOLVED that, except as amended herein, Resolution No. 91R-173
shall remain in full force and effect.
THE FOREGOING RESOLUTION is approved and adopted by the City Council of the City of
Anaheim this 20th day of December 2005.
MAYOR F THE CITY 0 IM
ATTEST:
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APPROVED AS TO FORM:
JACK L. WHITE, CITY ATTORNEY
BY: /'' ~
MOSES . OHNS , IV
DEPUT CITY A RNl
H:IDEFCOMP1Resolutia~?dOSDEC dc- reso part-time p1an.DOC
"EXHIBIT B"
CITY OF ANAHEIM
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FOR
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VERED
ARTICLE I. NAME
1.01 The Employer hereby amends and restates the Employer's Deferred
Compensation Plan and Trust. The name of this plan is the City of Anaheim Deferred
Compensation Plan for Employees not Covered by CaIPERS hereinafter referred to as
the "Plan." The Plan consists of the provisions set forth in this document. This
amendment and restatement of the Plan is effective December 31, 2005.
ARTICLE II. PURPOSE
2.01 The primary purpose of this Plan is to provide retirement income and other
deferred benefits to the Employees of the Employer and the Employees' Beneficiaries in
accordance with the provisions of Section 457 of the Internal Revenue Code of 1986, as
amended (the "Code"). It is intended that Participants in this Plan be considered
members of a retirement system, within the meaning of Section 3121(b)(7)(F) of the
Internal Revenue Code of 1986, as amended.
2.02 This Plan shall be an agreement solely between the Employer and participating
Employees.
2.03 Trust Fund: All amounts of Annual Deferrals, all property and rights purchased
with such amounts, and all income attributable to such amounts, property, or rights shall
be held and invested in the Trust Fund in accordance with this Plan and the Trust
Agreement. The Trust Fund, and any subtrust established under the Plan, shall be
established pursuant to a written agreement that constitutes a valid trust under the law
of the State of California. The Trustee shall ensure that all investments, amounts,
property, and rights held under the Trust Fund are held for the exclusive benefit of
Participants and their Beneficiaries. The Trust Fund shall be held in trust pursuant to
the Trust Agreement for the exclusive benefit of Participants and their Beneficiaries and
defraying reasonable expenses of the Plan and of the Trust Fund. It shall be
impossible, prior to the satisfaction of all liabilities with respect to Participants and their
Beneficiaries, for any part of the assets and income of the Trust Fund to be used for, or
diverted to, purposes other than for the exclusive benefit of Participants and their
Beneficiaries.
2.04 The Employer does not and cannot represent or guarantee that any particular
federal and state income, payroll or other tax consequences will occur by reason of an
Employee's participation in this Plan. The Participant should consult with his own attorney
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or other representative regarding all tax or other consequences of participation in this
Plan.
ARTICLE III. DEFlNITIONS
For the purposes of this Plan, certain words or phrases used herein will have the following
meanings:
3.01 Account Balance: The bookkeeping account maintained with respect #o each
Participant which reflects the value of the deferred Compensation credited to the
Participant, including the Participant's Annual Deferrals, the earnings or loss of the
Fund {net of Fund expenses) allocable to the Participant, any transfers for the
Participant's benefit, any distribution made to the Participant or the Participant's
Beneficiary and any fees or expenses charged against such Participant's Deferred
Compensation. If a Participant has more than one Beneficiary at the time of the
Participant's death, then a separate Account Balance shall be maintained for each
Beneficiary. The Account Balance includes any account for a Participant, the account
established for a Beneficiary after a Participant's death, and any account or accounts
established for an alternate payee {as defined in Section 414(p)(8) of the Code).
3.02 Administrator: Shall mean Plan Administrator. The City Treasurer shall serve as
Plan Administrator unless another person or entity is designated by the City Council.
3.03 Annual Deferral: The amount of Compensation deferred in any year.
3.04 Automatic Distribution Date: On or after January 1, 2002, "Automatic Distribution
Date" means April 1 of the calendar year after the Plan year the Participant attains age
70-112, or, if later, has a Severance from Employment.
3.05 Beneficia :The designated person for, if none, the Participant's estate) who is
entitled to receive benefits under the Plan after the death of a Participant. A designated
person includes an individual, trust, corporation or firm, or the estate of the Participant, or
any combination of the foregoing designated by a Participant to receive benefits under
the Plan. Designation shall be made on a Provider Beneficiary Designation Form
executed by the Participant to the Provider, unless otherwise provided. Beneficiary may
be singular or plural, primary or contingent.
3,06 CaIPERS: Shall mean the California Public Employees Retirement System.
3.07 Code: The Internal Revenue Code of 1986, as now in effect or as hereafter
amended. All citations to Sections of the Code are to such sections as they may from
time to time be amended or renumbered.
3.08 C_pen=ion: All cash compensation for services to the Employer, including
salary, wages, fees, commissions, bonuses, overtime pay that is includible in the
Employee's gross income for the calendar year, plus amounts that would be cash
compensation for services to the Employer includible in the Employee's gross income
for the calendar year.
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3.09 Contract Administrator; An administrator employed under contract authorized by
the City Council and under the direction of the Plan Administrator.
3.10 Contributions: Of a Participant shall mean his Participant Contributions and any
Employer Contributions made on his behalf.
3.11 Deferred Compensation: The portion of Compensation which the Participant and
the Employer mutually agree to defer in accordance with the provisions of this Plan; any
amount credited to the Participant's Account.
3.12 Deferred Compensation Committee: Shall mean the Committee, consisting of the
Plan Administrator, as Chairperson; the City Manager or his appointee; the Finance
Director or his appointee; the Human Resources Director or his appointee; two (2)
Participating Employees and one (1) Rotating Department Employee Representative.
3.13 Disabili :The substantial permanent 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 or by the Public Employees' Retirement System, on the
basis of advice from a physician or physicians.
3.14 Eligible Employee: Shall mean any Employee who is not a Qualified CALPERS
Participant. However, if an Employee's Compensation is determined pursuant to a
collective bargaining agreement, he shall not be an Eligible Employee under this Plan
unless he meets the preceding requirements of this Paragraph 3.14 and such bargaining
agreement specifically provides that he may be an Eligible Employee hereunder; and
further provided no employee shall be an Eligible employee if his service is described in
clauses (1) through (v) of the IRC Section 3121(b)(7)(F).
3.15 E_ mployee; Each natural person, whether appointed or elected, who is employed
by the Employer, whether as an employee or officer of the Employer.
3.1 fi Employer: Shall mean the City of Anaheim.
3.17 Employer Contributions: Shall mean the contributions of the Employer that are
made to the Plan in accordance with Article 5.02.
3.18 Includible Compensation: An Employee's actual wages in box 1 of Form W-2 for
a year for services to the Employer.
3.19 Normal Compen_ sation: The amount of compensation which would be payable to a
Participant by the Employer for a taxable year if no Participation Agreement were in effect
to defer compensation under this Plan.
3.20 Normal Retirement Age: Normal Retirement age is designated as 10-112 unless
the Participant has elected an alternate Norma! Retirement Age in writing (to be provided
to the Plan Administrator before severance). Once a Participant elects to use the Special
Section 457 Catch-up provision, the normal retirement age may not be changed.
A Participant's alternate Normal Retirement Age may not be earlier than the earliest date
that the Participant will become eligible to retire and receive unreduced retirement
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benefits under the California Public Employees Retirement System, and may nat be later
than the date the Participant will attain age 70-1/2. If a Participant continues employment
after attaining age 70-1/2, but has not previously elected an alternate Normal Retirement
Age, the Participant's alternate Normal Retirement Age can not be later than the
mandatory retirement age established by the Employer, or the age at which the
Participant actually leaves service if the employer has no mandatory retirement age, or as
required bylaw.
3.21 Partici ant: An individual who is currently deferring Compensation, or who has
previously deferred Compensation under the Plan by salary reduction and who has not
received a distribution of his entire benefit under the Plan. Only individuals who perform
services for the Employer as an Employee may defer Compensation under the Plan.
3.22 P_articipatinp Employee: An appointed member to the Deferred Compensation
Committee. The Participating Employee must submit an Application for Appointment to
the Committee. The Committee will select the Participating Employee. The Participating
Employee must be a full-time employee with the City of Anaheim and must be a
Participant of the Plan. This member shall serve a two (2} year term.
3.23 Participating E=aloyee (Rotating Department Employee Representative): The
Rotating Department Representative will be selected from Departments in the order of
staff size. Any Department may choose to pass or not participate. The respective
Department Head shall select the Department Representative. The Department
Representative must be a full-time employee with the City of Anaheim and must be a
Participant of the Plan. This member shall serve a two (2} year term.
3.24 Participati_on_A reg em=: An agreement entered into between an Employee and
the Employer, including any amendments or modifications, thereof. Such agreement
shall: (a) fix the amount of Deferred Compensation; (b} incorporate the terms, conditions,
and provisions of the Plan by reference.
3.25 Plan: City of Anaheim Deferred Compensation Plan.
3.26 Plan Year: The calendar year.
327 Provider: An institution providing investments or deposit vehicles.
3.28 Qualified CALPERS Participant: Shall mean any Employee who:
(a) is or ever has been a member of CALPERS, and
(b} either:
(1) based upon his current compensation, is making Employee
contributions to CALPERS and having Employer contributions made to
CALPERS,
(2) previously retired from the service of the Employer and has attained
normal retirement age under the CALPERS, or
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(3) previously retired from the service of the Employer and is currently
receiving retirement benefits under the CALPERS.
3.29 Requir_ginning Date: April 1 of the calendar year following the calendar year,
in which the Participant attains age 70-112 or a Severance from Employment, whichever
is later.
3.30 Retirement: The first date upon which both of the following shall have occurred
with respect to a Participant: Severance from Employment and attainment of age 50.
3.31 Severance from Employ,_;: The term Severance from Employment means the
date that the Employee dies, retires, or otherwise has a severance from employment
wi#h the Employer, as determined by the Plan Administrator (and taking into account
guidance issued under the Code.
3.32 S_po_: refers only to a person of the opposite sex who is a husband or a wife.
However, registered domestic partners shall have the same rights and responsibilities
as are granted to and imposed upon spouses under this Plan pursuant to California
Family Code Section 297.5(a) effective January 1, 2005, except as required by federal
law.
3.33 Sub-Committee: A subdivision of the Committee and shall be less than a quorum
of the Committee.
3.34 Trust Agreement: The written agreement (or declaration) made by and between
the Employer and the Trustees under which the Trust Fund is maintained under Article
vlll.
3.35 Trust Fund: The trust fund created under and subject to the Trust Agreement
under Article VII.
3.36 Trustees :The Trustee(s) duly appointed and currently serving under the Trust
Agreement, which are the Deferred Compensation Committee members.
3.37 Valuation Date: Each business day.
ARTICLE IV. ADMINISTRATION
4.01 The Plan shall be administered by the Plan Administrator but maybe administered
through a Contract Administrator under the direction of the Plan Administrator.
Participants receiving services from said Plan Administrator andlor Contract Administrator
may be charged a fee for said services.
The Trustees shall determine said fees in a manner deemed fair and equitable. The
Trustees may have withheld or collect, such fee, in such manner as it deems equitable,
from the compensation deferred pursuant to the Plan, or the income produced from the
compensation deferred pursuant to the Plan.
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4.02 Duties of the Plan Administrator: The Plan Administrator shall have the authority to
make all discretionary decisions affecting the rights or benefits of Participants which may
be required in the administration of this Plan. The Plan Administrator's decisions shall be
afforded the maximum deference permitted by applicable law.
4.03 Duties of the Provider: The Provider shall act for the exclusive benefit of the
Participants and their Beneficiaries. The Provider, as agent for the Trust, shall perform
nondiscretionary administrative functions in connection with the Plan, including but not
limited to; the maintenance of Participants' Accounts, the provision of periodic reports of
the status of each Account, and the disbursement of benefits on behalf of the Trust in
accordance with the provisions of this Plan.
ARTICLE V. PARTICIPATION IN THE PLAN
5.01 Eli ibil' :Each Eligible Employee shall have up to 7.5% of his Compensation
earned as an Eligible Employee withheld by the Employer as a Participant Contribution
under this Plan. Notwithstanding the preceding, the Employer and the Eligible Employee
mutually acknowledge that unless indicated otherwise in the salary resolution or
personnel ordinance or policies of the Employer, the salary or wage of the Eligible
Employee includes the Participant Contributions made under this Plan. As soon as
practicable after the deduction from the Compensation of the Eligible Employee, the
Employer shall pay all Participant Contributions to the fund or funds established under the
Plan.
5.02 On behalf of each Eligible Employee that has Participant Contributions deducted
from his Compensation pursuant to Article 5.01, the Employer shall pay to the fund or
funds established under the Plan, any Employer Contribution required under the terms of
any collective bargaining agreement or City Council Resolution. Payment of Employer
Contributions shall be made concurrently with the payment of the Participant
Contributions.
5.03 The Employer may change percentages of Compensation to be contributed as
Participant Contributions or Employer Contributions to greater or lesser percentages by
amending this Plan in accordance with Article XV. In addition, such percentages may be
changed to comply with the terms of any collective bargaining agreement pursuant to
which Employees participate in this Plan. Any percentage changes in the amount of
Participant Contributions hereunder shall be effective only with respect to Compensation
earned after the adoption date of the Plan amendment relating thereto or, if applicable
and later, the ratification date of the collective bargaining agreement relating thereto. In
no event shall the combined Participant Contributions and Employer Contributions total
less than 7.5% of an Eligible Employee's Compensation earned or exceed the maximum
deferral allowed by the Internal Revenue Code.
5.05 Information Provided by the Participant: Each Employee enrolling in the Plan
should provide to the Plan Administrator at the time of initial enrollment, and later if
there are any changes, any information necessary or advisable for the Plan
Administrator to administer the plan, including, without limitation, whether the Employee
is a participant in any other eligible plan under Code Section 457(b). The participation
6
election shall also include designation of a Beneficiary. Any such election shall remain
in effect until a new election is filed.
5.06 Contributions Made Promatly: Annual Deferrals by the Participant under the Plan
shall be transferred to the Trust Fund within a period that is not longer than is
reasonable for the proper administration of the Participant's Account Balance. For this
purpose, Annual Deferrals shall be treated as contributed within a period that is not
longer than is reasonable for the proper administration if the contribution is made to the
Trust Fund within i 5 business days following the end of the month in which the amount
would otherwise have been paid to the Participant.
ARTICLE VI. NON-RESPONSIBILITY CLAUSE
6.01 The Employer may, but is not required to, invest funds held pursuant to
agreements between Participants and the Employer in accordance with the preference or
preferences indicated by each Participant at the time of enrollment or change in
enrollment, prospectively only. The Employer shall retain the right to approve or
disapprove such investment request or requests, for transfer of investment among
different modes of investment available under the Plan. Any such action by the Employer
in investing funds, or approving of any investment of funds, 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,
In no event shall the Employes obligation to pay benefits to a Participant exceed the
value of the amounts credited to the Participant's account; the Employer shall not be
liable for losses arising from depreciation or shrinkage, in the value of any investments
acquired under this Plan.
6.02 Safe Harbor: No person who is otherwise a fiduciary shall be liable for any loss,
or by reason of any breach, which results from such participant's or beneficiary's
exercise of control. This relieves the Trustees and the Employer of responsibility for
participant-directed investments under the terms of the plan and Trust. The fiduciaries
of the plan are relieved of liability for any losses resulting from investment instructions
given by the participant or beneficiary.
ARTICLE VII. TRUST AND INVESTMENT QF ACCOUNTS
7.01 Investment Funds: In accordance with uniform and nondiscriminatory rules
established by the Employer and the Provider, the Participant may direct his Accounts to
be invested in one ~1) or more investment funds available under the Plan; provided,
however, that the Participants investment directions shall not violate any investment
restrictions established by the Employer. Neither the Employer, the Provider, nor any
other person shall be liable for any losses incurred by virtue of following such directions or
with any reasonable administrative delay in implementing such directions. Participants
must notify the Plan Administrator or Provider of errors in the Participants account
statement within 60 days after the end of the quarter in which the error occurred.
7.02 Crediting of Accounts: The Participant's Account shall reflect the amount and value
of the investments or other property obtained by the Employer through the investment of
the Participant's Deferred Compensation. Each Participant shall receive periodic reports
from the Providers, not less frequently than annually, showing the then current value of
his Account. Investment and market valuation of mutual funds can be made only when
the New York Stock Exchange is open for trading.
7.03 TT ust: Notwithstanding any contrary provision of the Plan, in accordance with
Section 457(g) of the Internal Revenue Code, all amounts of compensation deferred
pursuant to the Plan, all property and rights purchased with such amounts, and all income
attributable to such amounts, property, or rights shall be held in trust for the exclusive
benefit of participants and beneficiaries under the Plan. Any Trust under the Plan shall
be established pursuant to a written agreement that constitutes a valid trust under the law
of the State of California.
All amounts of compensation deferred under the Plan shall be transferred to a trust
established under the Plan within a period that is not longer than is reasonable for the
proper administration of the accounts of participants. Incorporated herein by reference is
the City of Anaheim Section 457 Deferred Compensation Plan Trust.
ARTICLE VIII. ELIGIBLE ROLLOVERS
8.01 Eligible Rollover Distributions:
(a) At the direction of the Employer, the Plan Administrator may permit a class of
Participants and Beneficiaries to elect to have all or any portion of their Account
Balance transferred to another eligible governmental plan within the meaning of
Section 457(b} of the Code and Section 1.457-2(f) of the Income Tax Regulations. A
transfer is permitted under this Article 8.01(a} for a Participant only if the Participant
has had a Severance from Employment with the Employer and is an employee of
the entity that maintains the other eligible governmental plan. Further, a transfer is
permitted under this Article 8.01 (a} only if the other eligible governmental plan
provides for the acceptance of plan-to plan transfers with respect to the Participants
and Beneficiaries and for each Participant and Beneficiary to have an amount
deferred under the other plan immediately after the transfer at least equal to the
amount transferred.
(b} Upon the transfer of assets under this Article 8.01, the Plan's liability to pay benefits
to the Participant or Beneficiary under this Plan shall be discharged to the extent of
the amount so transferred for the Participant or Beneficiary. The Plan Administrator
may require such documentation from the receiving plan as it deems appropriate or
necessary to comply with this Article 8.01 (for example, to confirm that the receiving
plan is an eligible governmental plan under paragraph (a) of this Article 8.01, and to
assure that the transfer is permitted under the receiving plan) or to effectuate the
transfer pursuant to Section 1.457-10(b) of the Income Tax Regulations.
s
8.02 Rollover Distributions:
(a} A Participant or the surviving spouse of a Participant {or a Participant's former
spouse who is the alternate payee under a domestic relations order, as defined in
Section 414(p) of the Code) who is entitled to an eligible rollover distribution may
elect, at the time and in the manner prescribed by the Plan Administrator, to have all
or any portion of the distribution paid directly to an eligible retirement plan specified
by the Participant in a direct rollover.
(b) For purposes of this Art~le 8.02, an eligible rollover distribution means any
distribution of all or any portion of a Participant's Account Balance, except that an
eligible rollover distribution does not include any installment payment under Article
9.05 for a period of 10 years or more. or
(c) For any other distribution, the portion, if any, of the distribution that is a required
minimum distribution under Section 401(a)(9). In addition, an eligible retirement plan
means an individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, a qualified
trust described in Section 401 (a) of the Code, an annuity plan described in Section
403(a} or 403(b} of the Code, or an eligible governmental plan described in Section
457(b} of the Code, that accepts the eligible rollover distribution.
ARTICLE IX. DISTRIBUTION QF BENEFITS
9.01 Benefit Distributions At Retirement or Other Severance from Employment: Upon
retirement or other Severance from Employment {other than due to death), a Participant
is entitled to receive a distribution of his Account Balance under any form of distribution
permitted under Article 9.05 commencing at the date elected under Article 9.03. If a
Participant does not elect otherwise, the distribution shall be paid as soon as
practicable following Normal Retirement Age or, if later, following retirement or other
Severance from Employment and payment shall be made in monthly installments of the
minimum annual payments described in paragraph {b) of Article 9.05.
9.02 Latest Distribution Date: In no event shall any distribution under this Article IX
begin later than the later of (a) April i of the year following the calendar year in which
the Participant attains age 70-1/2 or fib} April 1 of the year following the year in which
the Participant retires or otherwise has a Severance from Employment. If distributions
commence in the calendar year following the later of the calendar year in which the
Participant attains age 70-1/2 or the calendar year in which the Severance from
Employment occurs, the distribution on the date that distribution commences must be
equal to the annual installment payment for the year that the Participant has a
Severance from Employment determined under paragraph (b) of Article 9.05 and an
amount equal to the annual installment payment for the year after Severance from
Employment determined under paragraph (b) of Article 9.05 must also be paid before
the end of the calendar year of commencement.
9.03 Election of Benefit Commencement Date: A Participant may elect to commence
distribution of benefits at any time after retirement or other Severance from
Employment by a notice filed at least 30 days before the date on which benefits are to
9
commence. However, in no event may distribution of benefits commence later than the
date described in Article 9.02.
(a) Amount of Account Balance: Except as provided in Article 9.05, the amount of any
payment under this Article IX shall be based on the amount of the Account Balance
on the preceding Valuation Date.
(b) Revocation of Prior Election: Any election made under this Article IX may be
revoked at any time.
9.04 Payment Ootions: As provided in Articles 9.01, 9.02, and 9.07, a Participant or
Beneficiary may elect to have the value of the Participant's Account distributed in
accordance with one of the following payment options, provided that such option is
consis#ent with the limitations set forth in Article9.06.
9.05 Forms of Distribution: In an election to commence benefits under Article 9.03, a
Participant entitled to a distribution of benefits under this Article IX may elect to receive
payment in any of the following forms of distribution:
(a) A lump sum payment of the total Account Balance or
(b) Annual installment payments through the year of the Participant's death, the amount
payable each year equal to a fraction of the Account Balance equal to one divided
by the distribution period set forth in the Uniform Lifetime Table at Section
1.401(a)(9)-9, A-2, of the Income Tax Regulations for the Participant's age on the
Participant's birthday for that year. If the Participant's age is less than age 70, the
distribution period is 27.4 plus the number of years that the Participant's age is less
than age 70. At the Participant's election, this annual payment can be made in
monthly or quarterly installments. The Account Balance for this calculation (other
than the final installment payment} is the Account Balance as of the end of the year
prior to the year for which the distribution is being calculated. Payments shall
commence on the date elected under Article 9.03. For any year, the Participant can
elect distribution of a greater amount (not to exceed the amount of the remaining
Account Balance} in lieu of the amount calculated using this formula.
{c) Equal monthly, quarterly, semi-annual or annual payments in an amount chosen by
the Participant, continuing until his Account is exhausted;
{d) Approximately equal monthly, quarterly, semi-annual or annual payments, calculated
to continue for a certain period chosen by the Participant.
(e) Payments equal to payments made by the issuer of a retirement annuity policy
acquired by the Provider.
{f) Any payment option elected by the Participant and agreed to by the Employer and
Provider and as provided for by the Internal Revenue Service.
A Participant's or Beneficiary's selection of a payment option may include the selection of
an automatic annual cost-of-living increase. Such increase will be based on the rise in the
Consumer, Price Index for All Urban Consumers (CPI-U) from the third quarter of the last
10
year in which acost-of-living increase was provided to the third quarter of the current
year. Any increase will be made in periodic payment checks beginning the following
January.
9,06 Limitation on Options; Nfl payment option, other than a lump sum payment, may
be selected by a Participant unless the amount is not less than $100 per year. No
payment option may be selected by a Participant under Articles 9.05 or 9.07 unless it
satisfies the requirements of Sections 401(a)(9) and 457(4)(2) of the Code, including
that payments commencing before the death of the Participant shall satisfy the
inciden#al death benefit requirements under Section 401(a)(9)(G).
9.07 Death Benefit Distributions: Commencing in the calendar year following the
calendar year of the Participant's death, the Participant's Account Balance shall be paid
to the Beneficiary in a lump sum.
Alternatively, if the Beneficiary with respect to the Participant's Account Balance is a
natural person, at the Beneficiary's election, dis#ribution can be made in installments
(calculated in a manner that is similar to installments under Article 9.05) with the
distribution period determined under this paragraph. If the Beneficiary is the
Participant's surviving spouse, the distribution period is equal to the Beneficiary's life
expectancy using the single life table in Section 1.401(a)(9)-9, A-1, of the Income Tax
Regulations for the spouse's age on the spouse's birthday for that year. If the
Beneficiary is not the Participant's surviving spouse, the distribution period is the
Beneficiary's life expectancy determined in the year following the year of the
Participant's death using the single life table in Section 1.401 (a}(9)-9, A-1, of the
Income Tax Regulations for the Beneficiary's age on the Beneficiary's birthday for that
year, reduced by one for each year that has elapsed after that year. For any year, a
Beneficiary can elect distribution of a greater amount (not to exceed the amount of the
remaining Account Balance) in lieu of the amount calculated using this formula.
(a) If the designated Beneficiary does not continue to live for the remaining period of
payments under the payment option, then the commuted value of any remaining
payments under the payment option shall be paid in a lump sum to the
Beneficiary(ies) of the Beneficiary. In the event that the Beneficiary has no named
Beneficiary(ies) on file, payment shall be made in a lump sum to the estate of the
Beneficiary.
(b) If the beneficiary is a spouse, the Beneficiary may rollover distributions to an I RA or
a 401, 403(b) or governmental 457 plan in which the spouse participates .
(c) In the event that the Participant's estate is the Beneficiary, the commuted value of any
remaining payments under the payment option shall be paid to the Participant's estate
in a lump sum.
9.08 Designation of a Trust as a Beneficiary: A Participant may name a trust as a
Beneficiary with respect to the Participant's account in accordance with the requirements
of Code Section 401(a)(9) and Treasury Regulation Section 1.401(a)(9)-4. In order for a
trust to be validly named as Beneficiary under the Plan, certification of the trust
establishing the existence and terms of the trust executed by the trustee shall be
provided to the Provider, which certification shall include the following:
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(a} The existence of the trust and date of execution of the trust.
(b} The identity of the settlor(s) and the currently acting trustee(s) of the trust.
(c} The powers of the trustee.
(d} The revocability or irrevocability of the trust, or a confirmation that the trust shall
become irrevocable upon the death of the Participant.
(e} The signature authority of the trustees indicating whether all of the currently
acting trustees are required to sign in order to exercise their powers.
(f) The trust identification number (taxpayer identification number)
(g} The manner in which title to trust assets should be taken.
(h) A statement that the trust has not been revoked, modified, or amended in any
manner which would cause the representations to be incorrect.
(i) A statement that the certification is being signed by all of the currently acting
trustees of the trust.
(j) The certification shall be in the form of an acknowledged declaration signed by
all currently acting trustees of the trust under penalty of perjury.
(k) Copies of excerpts from the trust documents which designate the trustee.
(I) Copies of excerpts from the trust documents which confer upon the trustee the
power to act in the pending transaction.
To the extent any of the foregoing does not comply with the requirements of Code
Section 401(a)(9) and the Treasury Department Regulations thereunder, the Plan shall be
administered in accordance with such provisions of the Code and Treasury Regulations.
9.09 Unforeseeable Emergency Distribution: This Plan does not permit Unforeseeable
Emergency Withdrawals.
9.10 Mandatory Distributions for Certain Account Balances of $1,000 or Less: At the
direction of the Plan Administrator, a Participant's total Account Balance shall be paid in
a lump sum as soon as practical following the direction if
(a} The total Account Balance does not exceed $1,000 (or the dollar limit under Section
411(a}(11) of the Code, if greater),
(b} The Participant has not previously received a distribution of the total amount
payable to the Participant under this Article 9.1 o and
(c) No Annual Deferral has been made with respect to the Participant during the two-
yearperiod ending immediately before the date of the distribution.
9.11 Account Balances of $1,000 or Less: Notwithstanding Articles 9.03, 9.05 and
9.07, if the amount of a Participant's Account Balance is not in excess of $1,000 (or the
dollar limit under Section 411(a)(11) of the Code, if greater) on the date that payments
commence under Article 9.05 or on the da#e of the Participant's death, then payment
shall be made to the Participant (or to the Beneficiary if the Participant is deceased) in a
lump sum equal to the Participant's Account Balance as soon as practicable following
the Participant's retirement, death, or other Severance from Employment.
9.12 Procedure When Distributee Cannot Be Located: The Plan Administrator is
authorized to declare a forfeiture to the Plan of all Plan distributions and any income or
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other increment thereon if the owner, participant or beneficiary cannot be found and has
not, within three (3) years after it becomes payable or distributable, accepted the
distribution, corresponded in writing concerning the distribution, or otherwise indicated
an interest as evidenced by a memorandum or other written record on file with the Plan
Administrator. For this purpose the Plan Administrator or Provider will mail a notice to
the last known address shown on the City or Providers records. All forfeitures shall be
used to offset future Plan expenses.
ARTICLE X. NON-ASSIGNABILITY !MISCELLANEOUS
10.01 Non=Qn_ bility: Except as provided in Article 10.02, the interests of each
Participant or Beneficiary under the Plan are not subject to the claims of the
Participant's or Beneficiary's creditors; and neither the Participant nor any Beneficiary
shall have any right to sell, assign, transfer, or otherwise convey the right to receive any
payments hereunder or any interest under the Plan, which payments and interest are
expressly declared to be non-assignable and non-transferable.
10.02 Domestic Relations Orders:
Notwithstanding Article 10.01, if a judgment, decree or order (including approval of a
property settlement agreement) that relates to the provision of child support, alimony
payments, or the marital properr)r rights of~ a spouse or former spouse, child, or other
dependent of a Participant is made pursuant to the domestic relations law of any State
("domestic relations order"), then the amount of the Participant's Account Balance shall
be paid in the manner and to the person or persons so directed in the domestic
relations order. Such payment shall be made without regard to whether the Participant
is eligible for a distribution of benefits under the Plan. The Plan Administrator shall
establish reasonable procedures for determining the status of any such decree or order
and for effectuating distribution pursuant to the domestic relations order.
Where necessary to carry out the terms of such an order, a separate Account shall be
established with respect to the spouse, former spouse, or child who shall be entitled to
make investment selections with respect thereto in the same manner as the Participant;
any amount so set aside for a spouse, former spouse, or child shall be paid out in a lump
at the earliest date that benefits may be paid to the Participant, unless the order directs
a different time or form of payment. To the extent provided in Article VIII, the alternate
payee may elect to transfer all or part of a distribution to an eligible retirement plan. In
addition, in accordance with Code Section 414(p)(10), this Plan shall consider an order
a qualified domestic relations order even if such order requires a distribution to an
alternate payee prior to the time that a Participant has a Severance from Employment.
Any Payment made to a person other than the Participant pursuant to this Article X shall
be reduced by any required income tax withholding and shall be taxable to the alternate
payee.
(a} Release from Liability to Participant: The Employer's liability to pay benefits to a
Participant shall be reduced to the extent that amounts have been paid or set aside
for payment to a spouse, former spouse, or child pursuant to paragraph (a) of the
Article. No such transfer shall be effectuated unless the Employer has been provided
with satisfactory evidence that the Employer is released from any further claim by the
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Participant with respect to such amounts. The Participant shall be deemed to have
released the Employer from any claim with respect to such amounts, in any case in
which;
(i) the Employer has been served with legal process or otherwise joined in a
proceeding relating to such transfer;
(ii) the Participant has been notified of the pendency of such proceeding in the
manner prescribed by the law of the jurisdiction in which the proceeding is
pending for service of process in such action or by mail from the Employer
to the Participant's last known mailing address; and
(iii) the Participant fails to obtain an order of the court in the proceeding
relieving the Employer from the obligation to comply with the judgment,
decree, or order.
(b) Participation in Legal Proceedings: The Employer shall not be obligated to defend
against or set aside any judgment, decree, or order described in paragraph (a) or any
legal order relating to the garnishment of a Participant's benefits, unless the full
expense of such legal action is borne by the Participant. In the event that the
Participant's action (or inaction) nonetheless causes the Employer to incur such
expense, the amount of the expense may be charged against the Participant's
Account and thereby reduce the Employer's obligation to pay benefits to the
Participant. In the course of any proceeding relating to divorce, separation, or child
support, the Employer shall be authorized to disclose information relating to the
Participant's Account to the Participant's spouse, former spouse, or child (including
the legal representatives of the spouse, former spouse, or child), or to a court.
10.03 Mistaken Contributions: If any contribution (or any portion of a contribution) is
made to the Plan by a good faith mistake of fact, then within one year after the payment
of the contribution, and upon receipt in good order of a proper request approved by the
Plan Administrator, the amount of the mistaken contribution (adjusted for any income or
loss in value, if any, allocable thereto) shall be returned directly to the Participant or, to
the extent required or permitted by the Plan Administrator, to the Employer.
ARTICLE XI. RELATIONSHIP TO OTHER PLANS AND EMPLOYMENT AGREEMENTS
11.01 This Plan serves in addition to any other retirement, pension, or benefit plan or
system presently in existence or hereinafter established for the benefit of the Employers
employees. Nothing contained in this Plan shall be deemed to constitute an employment
contract or agreement between any Participant and the Employer or to give any
Participant the right to be retained in the employ of the Employer. Nor shall anything
herein be construed to modify the terms of any employment contract or agreement
between a Participant and the Employer.
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ARTICLE XII. APPLICABLE LAW
12.01 This Plan and Trust shall be construed under the laws of the State of California
and is established with the intent that it meets the requirements of an "eligible deferred
compensation plan" under Section 457 of the Code, as amended. The provisions of this
Plan and Trust shall be interpreted and applied so as to conform with the requirements of
Section 457 of the Code.
ARTICLE XIII. GENDER AND NUMBER
13.01 The masculine pronoun, whenever used herein, shall include the feminine
pronoun, and the singular shall include the plural, except where the context requires
otherwise.
ARTICLE XIV. MISCELLANEOUS
14.01 The Deferred Compensation Committee, as defined in Article 3.11 is empowered
to review, evaluate, and make recommendations for product providers to the City Council.
Additionally, the Deferred Compensation Committee will serve as an advisor to the Plan
Administrator in decisions such as unforeseeable emergency limitations, etc. Specific
duties and responsibilities for overall deferred compensation plan administration are
noted below:
A. CITY COUNCIL
1. Authorize, by Resolution, the Anaheim Deferred Compensation Plan
Document, incompliance with Section 457 of the Code.
2. Approves additions or removal of Providers, as well as approve
major amendments to the Plan.
3. Authorize the administration of the Plan.
B. PLAN ADMINISTRATOR
1. Day to day administration, including approval of Plan Participation
Agreements and preliminary evaluation of unforeseeable
emergencies.
2, Authority to sign all legal agreements with approved Providers,
including minor Plan amendments.
3. Communicating the Deferred Compensation Program to employees.
4. Maintain Deferred Compensation Procedures Manual and related
Plan documents.
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5. Coordinate Provider/City employee meeting schedule.
6. The Plan Administrator shall have the right to delegate any of the
above duties to staff.
C. DEFERRED COMPENSATION COMMITTEE
1. Conduct reviews of the Deferred Compensation Program and make
recommendations as necessary.
2. Conduct reviews of the Retirement Health Savings Program and
make recommendations as necessary.
3. Review Provider performance and provide recommendations on
adding, del®ting Providers to the City Council.
4. Review and make determinations on adding, deleting or amending
Investment Options.
5. Assist the Plan Administrator on unforeseeable emergency
determinations, as necessary.
6. The Committee shall have the power to appoint subcommittees.
7. The seven (7} Deferred Compensation Committee Members shall
serve as Trustees of the Trust.
8. The Committee will select the two (2} Participating Employee
members of the Committee.
D. SUBCOMMITTEE
1. Performs task within the scope of the Committee's responsibility
2. The Subcommittee makes reports and recommendations for
consideration to the Committee.
14.02 No Participant or other person shall have any legal or equitable right against the
Employer except as provided in the Plan, and in no event shall the terms of employment
of any Employee or Participant be modified or in any way affected thereby.
14.03 Each Participant herein expressly agrees for himself, his successors, assignees
and his beneficiaries that he shall look solely to the general assets of the Trust for the
payment of any such benefit to which he may become entitled under the Plan.
14.04 The Plan has been adopted in the State of California and shall be construed and
governed and administered incompliance with all applicable State law.
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14.05 The Plan shall be binding upon and shall inure to the benefit of the Employer, its
successors and assigns, all Participants and Beneficiaries, and their heirs, and legal
representatives.
14.06 Any notice or other communication required or permitted under the Plan shall be in
writing, and if directed to the Employer shall be sent to the Employer or Contract
Administrator at its principal office, as applicable; and, if directed to a Participant or a
Beneficiary, shall be sent to such Participant or Beneficiary at his last-known address as it
appears on the Employer's and Provider's records, or delivered to a participant (stapling
to a paycheck), emailed or faxed. Such notice shall be deemed given when mailed,
delivered to a Participant (stapling to a paycheck, emailed or faxed.
14.07 Deductions for Participant's contributions to the Public Employees' Retirement
System, Social Security, Retirement Health Savings Program, and other retirement plan
or associations shall be made regardless of amounts deferred pursuant to the Plan.
14.08 A permitted leave of absence without pay shall be considered to be a temporary
suspension of contribution to the Plan. Contribution shall be automatically reinstated in
accordance with the Participation Agreement as of the first day of the next payperiod
subsequent to the termination of such leave of absence status. In the event of a non-
permitted leave of absence without pay, the Employer at its discretion may deem such
absence a revocation of the Participation Agreement.
ARTICLE XV. AMENDMENT 0~ TERMINATION.OF PLAN
15.01 The Employer has the sole and exclusive right to terminate this Plan for all
Participants at any time. Upon such termination, each Participant in the Plan will be
deemed to have revoked his Participation Agreement as of the date of such termination.
Such termination shall have no effect on the rights of the Participant with respect to
amounts already deferred under the Plan or transferred pursuant to Article VIII.
The Employer may also amend the provisions of this Plan at any time; provided, however,
that no amendment shall 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 or losses attributable to such Deferred
Compensation prior to and subsequent to the amendment.
To the extent that there are legislative changes affecting Section 457 of the Internal
Revenue Service Code, this plan shall be interpreted to allow implementation of
mandatory changes.
This Plan is intended to qualify as an eligible deferred compensation plan under Section
457 of the Code and shall be interpreted and administered in a manner consistent with
such qualifications. The Employer 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 effective date of the Plan. In the event that the Plan is deemed by the
Internal Revenue Service to be administered in a manner inconsisten# with Section 457 of
the Code, the Employer shall correct such inconsistency within the period provided in
z~
Section 457 of the Code, or terminate the Plan, 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 XVI. TOTAL AGREEMENT
16.01 This Plan and the Participation Agreement, and any subsequently adopted
amendment thereof, shall constitute the total agreement or contract between the
Employer and the Participant regarding the Plan. No oral statement regarding the Plan
may be relied upon by the Participant.
The Employer hereby establishes this Deferred Compensation Plan on the terms and
conditions set forth herein.
DATE:
CITY OF ANAH OR
w_
CITY TREASU R
.~
ATT ~ : ~;
ITY C~.E
APPROVED AS TO FORM
CITY ATTORNEY
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