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HomeMy WebLinkAboutRESO 7944RESOLUTION NO. 7944 RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO APPROVING A MONEY PURCHASE PLAN WHEREAS, the City of Palo has employees who render valuable services; and retirement retirement death; and WHEREAS, the plan benefits and funds for establishment of a money purchase said employees by providing funds for their beneficiaries in the event of WHEREAS, the Council desires that its money purchase retirement plan be administered by the ICMA Retirement Corporation and that the funds held in such plan be invested in the ICMA Retirement Trust, a trust established by public employers for the collective investment of funds held under their retirement and deferred compensation plans: NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows; SECTION 1. The . Council hereby establishes a money purchase retirement plan (the "Plan") in the form of the ICMA Retirement Corporation Governmental Money Purchase & Trust, pursuant to the specific provisions of the Adoption Agreement, a copy of which is attached hereto and incorporated herein by reference. The Plan shall be maintained for the exclusive benefit of all eligible employees and their beneficiaries. SECTION 2. The Council hereby executes the Declaration of Trust of the ICMA Retirement Trust, and attached hereto, specifically relating to the money purchase plan established by this resolution. SECTION 3. The City Council hereby agrees that the City of Palo Alto will serve as trustee under the Plan and will invest funds held under the Plan in the ICMA Retirement Trust. SECTION 4. The Council hereby declares that the Director of Human Resources shall be the coordinator for the Plan; shall receive reports, notices, etc. from the ICMA Retirement Corporation or the ICMA Retirement Trust; shall cast, on behalf of the Employer, any required votes under the ICMA Retirement Trust; and may delegate any administrative duties relating to the Plan to appropriate departments. 000322 cl 0032321 SECTION 5. The Council hereby authorizes the Director of Human Resources to execute all necessary agreements with the ICMA Retirement Corporation incidental to the administration of the Plan. SECTION 6. The City Clerk is hereby directed to forward a certified copy of this resolution to the ICMA Retirement Corporation along with an executed copy of the Adoption Agreement, an executed copy of the Declaration of Trust, and two original Administrative Services Agreements, along with any other documents as the Director of Human Resources deems necessary. SECTION 7. The Council finds that this is not a project for purposes of the California Environmental Quality Act ("CEQA"). INTRODUCED AND PASSED: March 27, 2000 AYES: BEECHAM, BURCH, EAKINS, KLEINBERG, KNISS, LYTLE, MOSSAR, OJAKIAN NOES: ABSENT: FAZZINO ABSTENTIONS: ATTEST: APPROVED: ~?).~ City Clerk APPROVED AS TO FORM: Senior Asst. City Attorney Resources Services 000322 cl 0032321 2 DECLARATION OF TRUST OF ICMA RETIREMENT TRUST ARTICLE I. NAME AND DEFINITIONS Section 1.1 Name:The name of the trust created hereby is the ICMA Retirement Trust. Section 1.2 Definitions: Wherever they are used herein, the following terms shall have the following respective meanings: (a) By-laws. The by-laws referred to in Section 4.1 hereof, as amended from time to time: (b) Deferred Compensation Plan. A deferred compensation plan established and maintained by a Public Employer for the purpose of providing retirement income and other deferred benefits to its employees in accordance with the provision of section 457 of the Internal Revenue Code. (c) Employees. Those employees who participate in Qualified Plans and/ or Deferred Compensa- tion Plans. (d) Employer Trust. A trust created pursuant to an agreement between RC and a Public Employer, or an agreement between RC and a Public Employer for adnlinistrative services that is not a trust, in either case for the purpose of investing and adnlinistering the funds set aside by such Employer in connection with its Deferred Compensation agreements with its employees or in connection with its Qualified Plan. (e) Investment Contract. A non-negotiable contract entered into by the Retirement Trust with a financial institution that provides for a f fixed rate of return on investment. (f) ICMA. The International City/County Management Association. (g) ICMA Trustees. Those Trustees elected by the Public Employers in accordance with the provisions of Section 3.1 (a) hereof, who are also members or former members of the Executive Board of ICMA. (h) RC Trustees. Those Trustees elected by the Public Employers who, in accordance with the provisions of Section 3.1 (a) hereof, are also members or former members of the Board of Directors ofRC. (i) Internal Revenue Code. The Internal Rev- enue Code of 1986, as amended. MPP 03/31/2000 G) Investment Adviser .The Investment Adviser that enters into a contract with the Retirement Trust to provide advice with respect to investment of the Trust Property. (k) Portfolios. The separate conmlingled pools of in vestment established by the Investment Adviser to the Retirement Trust, under the supervision of the Trustees, for the purpose of providing invest- ments for the Trust Property. (1) Public Employee Trustees. Those Trustees elected by the Public Employers who, in accor dance with the provision ofSection 3.1 (a) hereof, are full-time employees ofPublic Employers. (m) Public Employer Trustees. Public Employers who serve as trustees of the Qualified Plans or Deferred Compensation Plans. (n) Public Employer.A unit of state or local government, or any agency or instrumentality thereof, that has adopted a Deferred Compensa- tion Plan or a Qualified Plan and has executed this Declaration of Trust. (o) Qualified Plan. A plan that is sponsored by a Public Employer for the purpose of providing retirement income to its employees and that satisfies the qualification requirements of Section 401 of the Internal Revenue Code. (p) Public Employer Trust. A trust that is established by a Public Employer in connection with its Qualified Plan and that satisfies the requirements of Section 501 of the Internal Revenue Code, or a trust established by-a Public Employer in connection with its De- ferred Compensation Plan and that satisfies the requirements of Section 457(b) of the Internal Revenue Code. (q) RC. The International City Management Association Retirement Corporation. (r) Retirement Trust. The Trust created by this Declaration ofTrust. (s) Trust Property. The amounts held in the Retirement Trust as provided in Section 2.3. The Trust Property shall include any income resulting from the investment to the amounts so held. (t) Trustees. The Public Employee Trustees, ICMA Trustees and RC Trustees elected by the Public Employers to serve as members of the Board of Trustees of the Retirement Trust. ARTICLE II. CREATION AND PURPOSE OF THE TRUST; OWNERSHIP OF TRUST PROPERTY Section 2.1 Creation: (a) The Retirement Trust was created by the execu- tion of this Declaration ofT rust by the initial Trustees and Public Employers and is established with respect to each participating Public Employer by adoption of this Declaration of Trust. (b) The Retirement Trust is hereby expressly made a part of the appropriate Qualified Plan or Deferred Compensation Plan of each Public Employer that executes or has executed this Declaration ofTrust. Section 2.2 Purpose and Participation: (a) The purpose of the Retirement Trust is to pro- vide for the conmlingled investment of funds held by the Public Employers in connection with their Deferred Compensation and Qualified Plans. The Trust Property shall be invested in the Portfolios, in Investment Contracts, and in other investments reconm1ended by the Investment Adviser under the supervision of the Board ofTrustees. No part of the Trust Property will be invested in securities issued by Public Employers. (b) Participation in the Retirement Trust is limited to M pension and profit-sharing trusts which are maintained by Public Employers and that are ex- empt under section 501 (a) of the Internal Rev- enue Code because the Qualified Plans related thereto qualifY under section 401 (a) of the Inter- nal Revenue Code and (ii) deferred compensa- tion plans maintained by Public Employers under Section 457 of the Internal Revenue Code (and trusts maintained by such Public Employers in con- nection with such 457 plans). Section 2.3 Ownership ofTrust Property: (a) The Trustees shall have legal title to the Trust Prop- erty. The Trust Property shall be held as follows: (i) for the Public Employer Trustees for the ex- clusive benefit of the Employees; or (ii) in the case of a Deferred Compensation Plan maintained by a Public Employer that has not established a Public Employer Trust for the plan, for the Public Employer as beneficial owner of the plan's assets. (b)· The portion of the corpus and income of the Re- tirement Trust that equitably belongs to any Pub- lic Employer Trust may not be used for or di- verted to any purpose other than for the exclu- sive benefit of the Employees (or their beneficia- MPP 03/31/2000 ries) who are entitled to benefits under such Pub- lic Employer Trust. (c) No employer's-Public Employer Trust may assign any part of its equity or interest in the Retirement Trust, and any purported assignment of such equity or interest shall be void. ARTICLE Ill. TRUSTEES Section 3.1 Number and Qualification ofTrustees: (a) The Board ofTrustees shall consist of nine Trustees. Five of the Trustees shall be full-time employees of a Public Employer (the Public Employee Trustees) who are authorized by such Public Employer to serve as Trustee. The re- maining four Trustees shall consist of two per- sons who, at the time of election to the Board of Trustees, are members or former members of the Executive Board ofiCMA, and two persons who, at the time of election, are members or former members of the Board of Directors of RC. One of the ICMA Trustees and one of the RC Trustees shall, at the time of election, be full-time employees of Public Employers. (b) No person may serve as a Trustee for more than two terms in any ten-year period. Section 3.2 Election and Term: (a) Except for the Trustees appointed to fill vacancies pursuant to Section 3.5 hereof, the Trustees shall be elected by a vote of a majority of the voting Public Employers in accordance with the procedures set forth in the By-Laws. (b) At the first election ofTrustees, three Trustees shall be elected for a term of three years, three Trustees shall be elected for a term of two years and three Trustees shall be elected for a term of one year. At each subsequent election, three Trustees shall be elected each to serve for a term of three years and until his or her successor is elected and qualified. Section 3.3 Nominations:TheTrustees who are full-time employees of Public Employers shall serve as the Nonlinating Conmlittee for the Public Employee Trustees. The Nonlinating Conmuttee shall choose candidates for Public Employee Trustee in accordance with the procedures set forth in the By-Laws. Section 3.4 Resignation and Removal: (a) Any Trustee may resign as Trustee (without need for prior or subsequent accounting) by an instrument in writing signed by the Trustee and delivered to the otherTrustees and such 2 resignation shall be effective upon such delivery, or at a later date according to theterms of the instrument. Any of the Trustees may be removed for cause, by a vote of a majority of the Public Employers. (b) Each Public Employee Trustee shall resign his or her position as Trustee within sixty days of the date on which he or she ceases to be a full-time employee of a Public Employer. Section 3.5 Vacancies: The term of office cf a Trustee shall terminate and a vacancy shall occur in the event of his or her death, resignation, removal, adjudicated incompetence or other incapacity to perform the duties of the office of a Trustee. In the case of a vacancy, the remaining Trustees shall appoint such person as they in their discretion shall see fit (subject to the limitations set forth in this Section), to serve for the unexpired portion of the term of the Trustee who has resigned or otherwise ceased to be a Trustee. The appointment shall be made by a written instrument signed by a majority of the Trustees. The person appointed must be the same type ofTrustee (i.e., Public Employee Trustee, ICMA Trustee or RC Trustee) as the person who has ceased to be a Trustee. An appointment of a Trustee may be made in anticipation of a vacancy to occur at a later date by reason of retirement or resignation, provided that such appointment shall not become effective prior to such retirement or resignation. Whenever a vacancy shall occur, until such vacancy is filled as provided in this Section 3.5, the Trustees in office, regardless of their number, shall have all the powers granted to the Trustees and shall discharge all the duties imposed upon the Trustees by this Declaration. A written instrument certifYing the existence of a vacancy signed by a majority of the Trustees shall be conclu- sive evidence of the existence of such vacancy. Section 3.6 Trustees Serve in Representative Capacity: By executing this Declaration, each Public Employer agrees that the' Public Employee Trustees elected by the Public Employers are authorized to act as agents and representatives of the Public Employers collectively. ARTICLE IV. POWERS OF TRUSTEES Section 4.1 General Powers: The Trustees shall have the power to conduct the business of the Trust and to carry on its operations. Such power shall include, but shall not be limited to, the power to: (a) receive the Trust Property from the Public Employers, Public Employer Trustees or the trustee or administrator under any Employer Trust; (b) enter into a contract with an Investment Adviser providing, among other things, for the establish- MPP 03/31/2000 ment and operation of the Portfolios, selection of the Investment Contracts in which the Trust Property may be invested, selection of the other investments for the Trust Property and the payment of reasonable fees to the Investment Adviser and to any sub-investment adviser retained by the Investment Adviser; (c) review annually the performance of the Investment Adviser and approve annually the contract with such Investment Adviser; (d) invest and reinvest the Trust Property in the Portfolios, the Investment Contracts and in any other investment reconm1ended by the Invest- ment Adviser, but not including securities issued by Public Employers, provided that if a Public Employer has directed that its monies be invested in one or more specified Portfolios or in an Investment Contract, the Trustees of the Retirement Trust shall invest such monies in accordance with such directions; (e) keep such portion of the Trust Property in cash or cash balances as the Trustees, from time to time, may deem to be in the best interest of the Retirement Trust created hereby without liability for interest thereon; (f) accept and retain for such time as they may deem advisable any securities or other property received or acquired by them as Trustees hereunder, whether or not such securities or other property would normally be purchased as investment hereunder: (g) cause any securities or other property held as part of the Trust Property to be registered in the name of the Retirement Trust or in the name of a nominee, and to hold any investments in bearer form, but the books and records of the Trustees shall at all times show that all such investments are a part of the Trust Property; (h) make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted; (i) vote upon any stock, bonds, or other securities; give general or special proxies or powers of attorney with or without power of substitution; exercise any conversion privileges, subscription rights, or other options, and make any payments incidental thereto; oppose, or consent to, or otherwise participate in, corporate reorganiza- tions or to other changes affecting corporate securities, and delegate discretionary powers and pay any assessments or charges in connection therewith; and generally exercise any of the powers of an owner with respect to stocks, 3 bonds, securities or other property held as part of the Trust Property; (j) enter into contracts or arrangements for goods or services required in connection with the operation of the Retirement Trust, including, but not limited to, contracts with custodians and contracts for the provision of administrative services; (k) borrow or raise money for the purposes of the Retirement Trust in such amount, and upon such terms and conditions, as the Trustees shall deem advisable, provided that the aggregate amount of such borrowings shall not exceed 30% of the value of the Trust Property. No person lending money to the Trustees shall be bound to see the application of the money lent or to inquire into its validity, expediency or propriety or any such borrowing; Q) incur reasonable expenses as required for the operation of the Retirement Trust and deduct such expenses from of the Trust Property; (m) pay expenses properly allocable to the Trust Property incurred in connection with the Deferred Compensation Plans, Qualified Plans, or the Employer Trusts and deduct such expenses from that portion of the Trust Prop- erty to which such expenses are properly allocable; (n) pay out of the Trust Property all real and personal property taxes, income taxes and other taxes of any and all kinds which, in the opinion of the Trustees, are properly levied, or assessed under existing or future laws upon, or in respect of, the Trust Property and allocate any such taxes to the appropriateaccounts; (o) adopt, amend and repeal the By-laws, provided that such By-laws are at all times consistent with the terms of this Declaration ofT rust; (p) employ persons to make available interests in the Retirement Trust to employers eligible to maintain a Deferred Compensation Plan under Section 457 or a Qualified Plan under Section 401 of the Internal Revenue Code; ( q) issue the Annual Report of the Retirement Trust, and the disclosure documents and other literature used by the Retirement Trust; (r) in addition to conducting the investment program authorized in Section 4.1 (d), make loans, including the purchase of debt obliga- tions, provided that all such loans shall bear interest at the current market rate; MPP 03/31/2000 (s) contract for, and delegate any powers granted hereunder to, such officers, agents, employees, auditors and attorneys as the Trustees may select, provided that the Trustees may not delegate the powers set forth in paragraphs (b), (c) and (o) of this Section 4.1 and may not delegate any powers if such delegation would violate their fiduciary duties; (t) provide for the indemnification of the Officers and Trustees of the Retirement Trust and purchase fiduciary insurance; (u) maintain books and records, including separate accounts for each Public Employer, Public Employer Trustee or Employer Trust and such additional separate accounts as are required under, and consistent with, the Deferred Compensation or Qualified Plan of each Public Employer; and (v) do all such acts, take all such proceedings, and exercise all such rights and privileges, although not specifically mentioned herein, as the Trustees may deem necessary or appropriate to administer the Trust Property and to carry out the purposes of the Retirement Trust. Section 4.2 Distribution ofTrust Property: Distri- butions of the Trust property shall be made to, or on behalf of, the Public Employer or Public Employer Trustee, in accordance with the terms of the Deferred Compensation Plans, Qualified Plans or Employer Trusts. The Trustees of the Retirement Trust shall be fully protected in making payments in accordance with the directions of the Public Employers, Public Employer Trustees or trustees or administrators of any Employer Trust without ascertaining whether such payments are in compli- ance with the provisions of the applicable Deferred Compensation or Qualified Plan or Employer Trust. Section 4.3 Execution of Instruments:The Trustees may unanimously designate any one or more of the Trustees to execute any instrument or document on behalf of all, including but not limited to the signing or endorsement of any check and the signing of any applications, insurance and other contracts, and the action of such designated Trustee or Trustees shall have the same force and effect as if taken by all the Trustees. ARTICLE V. DUTY OF CARE AND LIABILITY OF TRUSTEES Section 5.1 Duty of Care: In exercising the powers hereinbefore granted to the Trustees, the Trustees shall perform all acts within their authority for the exclusive purpose of providing benefits for the Public Employers in connection with non-trusted 4 Deferred Compensation Plans and for the Public Employer Trustees, and shall perform such acts with the care, skill, prudence and diligence in the circum- stances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. Section 5.2 Liability: The Trustees shall not be liable for any mistake of judgment or other action taken in good faith, and for any action taken or omitted in reliance in good faith Ufon the books of account or other records of the Retirement Trust, upon the opinion of counsel, or upon reports made to the Retirement Trust by any of its officers, employ- ees or agents or by the Investment Adviser or any sub-investment adviser, accountant, ap- praiser or other expert or consultant selected with reasonable care by the Trustees, officers or employees of the Retirement Trust. The Trustees shall also not be liable for any loss sustained by the Trust Property by reason of any investment made in good faith and in accordance with the standard of care set forth in Section 5.1. Section 5.3 Bond: No Trustee shall be obligated to give any bond or other security for the performance of any of his or her duties hereunder. ARTICLE VI. ANNUAL REPORT TO SHAREHOLDERS The Trustees shall annually submit to the Public Employ- ers and Public EmployerTrustees a written report of the transactions of the Retirement Trust, including financial statements which shall be certified by independent public accountants chosen by the Trustees. ARTICLE VIII. DURATION OR AMENDMENT OF RETIREMENT TRUST Section 7.1 Withdrawal:A Public Employer or Public Employer Trustee may, at any time, withdraw from this Retirement Trust by delivering to the Board of Trustees a written statement of withdrawal. In such statement, the Public Employer or Public Employer Trustee shall acknowledge that the Trust Property allocable to the Public Employer is derived from compensation deferred by employees of such Public Employer pursuant to its Deferred Compensation Plan or from contributions to the accounts of Employees pursuant to a Qualified Plan, and shall designate the financial institution to which such property shall be transferred by the Trustees of the Retirement Trust or by the trustee or administrator under an Employer Trust. Section 7.2 Duration: The Retirement Trust shall continue until terminated by the vote of a majority of the Public Employers, each casting one vote. MPP 03/31/2000 Upon termination, all of the Trust Property shall be paid out to the Public Employers, Public Employer Trustees or the trustees or administrators of the Employer Trusts, as appropriate. Section 7.3 Amendment: The Retirement Trust may be amended by the vote of a majority of the Public Employers, each casting one vote. Section 7.4 Procedure:A resolution to terminate or amend the Retirement Trust or to remove a Trustee shall be submitted to a vote of the Public Employers if: (i) a majority of the Trustees so direct, or; (ii) a petition requesting a vote signed by not less than 25 percent of the Public Employers, is submitted to the Trustees. ARTICLE VIII. MISCELLANEOUS Section 8.1 Governing Law: Except as otherwise required by state or local law, this Declaration of Trust and the Retirement Trust hereby created shall be construed and regulated by the laws of the District of Columbia. Section 8.2 Counterparts: This Declaration may be executed by the Public Employers and Trustees in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 5