HomeMy WebLinkAboutRESO7639RESOLUTION NO. 7639
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO
ADOPTING MODIFICATIONS TO THE RETIREMENT PLAN FOR
THE CITY'S HOURLY EMPLOYEES; AND APPROVING
EXECUTION OF AN AGREEMENT WITH ICMA RETIREMENT
CORPORATION FOR ADMINISTRATION OF THE PLAN
WHEREAS, the City of Palo Alto adopted a retirement plan
for the City's part-time, temporary and seasonal employees pursuant
to Resolution No. 7319 adopted June 13, 1994; and
WHEREAS, ICMA Retirement Corporation ("ICMA") has
administered this deferred compensation plan pursuant to Section
457 of the Internal Revenue Code; and
WHEREAS, ICMA has proposed that the City approve a modified
version of the deferred compensation plan which would permit
electronic filings, with a resulting reduction in plan
administration costs; and
WHEREAS, ICMA has also proposed modifications to the
deferred compensation plan relating to lump -sum payouts to certain
employees upon separation from employment with the City; and
WHEREAS, the Council desires to adopt the proposed
modifications to the deferred compensation plan for hourly
employees of the City, and to enter into an agreement with ICMA for
administration of the plan, as modified.
NOW, THEREFORE, the Council of the City of Palo. Alto does
RESOLVE as follows:
SECTION 1. The Council hereby adopts the amendments to the
"The City of Palo Alto/PTS 457 Deferred Compensation Plan (the
"Plan"), a copy of which is amended plan attached hereto as Exhibit
A and incorporated herein by reference.
SECTION 2. The Council hereby approves that certain
agreement by and between the City and ICMA for administration of
the Plan, and authorizes the City Manager to execute the agreement
for and on behalf of the City. A copy of the agreement is attached
hereto as Exhibit B and incorporated herein by reference.
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9611271ar 0031467
SECTION 3. The Council finds that this is not a project
under the California Environmental Quality Act.
INTRODUCED AND PASSED: December 16, 1996
AYES: ANDERSEN, FAZZINO, HUBER, KNISS, MCCOWN, ROSENBAUM, SCHNEIDER, STMITIAN,
WHEELER
NOES:
ABSENT:
ABSTENTIONS:
ATTES':
ity lerk
APPROVED AS TO FORM:
(0.0 -
enior Asst. City Attorney
APPROVED:
Depu y City Manager,
inistrative Services
Dir tor of Human Resources
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961127 1ac0031457
DEFERRED COMPENSATION PLAN
FOR PART-TIME, TEMPORARY AND SEASONAL EMPLOYEES
ARTICLE I. INTRODUCTION
The Employer hereby establishes the
Employer's Part-time, Temporary and
Seasonal Employees Deferred Compensation
Plan, hereafter referred to as the "Plan." The
Plan consists of the provisions set forth in this
document.
The primary purpose of this Plan is to provide
retirement income and other deferred benefits
to the Employees of the Employer in
accordance with the provisions of Section 457
of the Internal Revenue Code of 1986, as
amended (the "Code").
This Plan shall be an agreement solely between
the Employer and participating Part-time,
Temporary and Seasonal Employees.
ARTICLE II. DEFINITIONS
2.01 Account: The bookkeeping account
maintained for each Participant reflecting the
cumulative amount of the Participant's
Deferred Compensation, including any income,
gains, losses, or increases or decreases in
market value attributable to the Employer's
investment of the Participant's Deferred
Compensation, and further reflecting any
distributions to the Participant or the
Participant's Beneficiary and any fees or
expenses charged against such Participant's
Deferred Compensation.
2.02 Administrator: The person or persons
named to carry out certain nondiscretionary
administrative functions under the Plan, as
hereinafter described. The Employer may
remove any person as Administrator upon 60
days' advance notice in writing to such person,
in which case the Employer shall name another
person or persons to act as Administrator. The
Administrator may resign upon 60 days'
advance notice in writing to the Employer, in
which case the Employer shall name another
person or persons to act as Administrator.
2.03 Beneficiary: The person or persons
designated by the Participant, in writing to the
Administrator, who shall receive any benefits
payable hereunder in the event of the
Participant's death. In the event that the
Participant names two or more Beneficiaries,
each Beneficiary shall be entitled to equal
shares of the benefits payable at the
Participant's death, unless otherwise provided
by the Participant. A Participant may at any
time change his/her designated Beneficiary,
and such change shall become effective
immediately. If no beneficiary is designated by
the Participant, if the Designated Beneficiary
predeceases the Participant, or if the
designated Beneficiary does not survive the
Participant for a period of fifteen (15) days,
then the estate of the Participant shall be the
Beneficiary.
2.04 Deferred Compensation: The amount of
Normal Compensation otherwise payable to
the Participant which the Participant and the
Employer mutually agree to defer hereunder,
any amount credited to a Participant's
Account by reason of a transfer under section
6.03, or any other amount which the Employer
agrees to credit to a Participant's Account.
2.05 Earnings: Earnings, which form the
basis for computing the minimum amount of
compensation that must be deferred under this
Plan, are all of each Participant's W-2 earnings
which are actually paid to the Participant
during the Plan Year, plus the Deferred
Compensation and/or any contributions made
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EXHIBIT A
pursuant to a salary reduction agreement
which are not includible in the gross income of
the Employee under section 125, 402(e)(3),
402(h)(1)(B), 403(b), or 414(h)(2) of the
Code.
2.06 Employee: Any individual who provides
services for the Employer, who is not a
member of a retirement system, as def<<ed in
Treas. Regs. section 31.3121(b)(7)-2,
maintained by the Employer, and who has been
designated by the Employer as eligible to
participate in the Plan.
2.07 Includible Compensation: The amount
of an Employee's compensation from the
Employer for a taxable year that is attributable
to services performed for the Employer and
that is includible in the Employee's gross
income for the taxable year for federal income
tax purposes; such term does not include any
amount excludable from gross income under
this Plan or any other plan described in Section
457(b) of the Code or any other amount
excludable from gross income for federal
income tax purposes. Includible Compensation
shall be determined without regard to any
community property laws.
2.08 Normal Compensation: The amount of
compensation which would be payable to a
Participant by the Employer for a taxable year
if no agreement were in effect to defer
compensation under this Plan.
2.09 Normal Retirement Age: Age 70-1/2,
unless the Participant has elected an alternate
Normal Retirement Age by written instrument
delivered to the Administrator prior to
Separation from Service. A Participant's
Normal Retirement Age determines the period
during which a Participant may utilize the
catch-up limitation of Section 5.02 hereunder.
Once a Participant has to any extent utilized
the catch-up limitation of Section 5.02, his/her
Normal Retirement Age may not be changed.
A Participant's alternate Normal Retirement
Age may not be earlier than age 55 and may
not be later than age 70-1/2. Notwithstanding
the foregoing, if a Participant continues
employment after attaining age 70-1/2, not
having previously elected an alternate Normal
Retirement Age, the Participant's alternate
Normal Retirement Age shall not be later than
the mandatory retirement age, if any,
established by the Employer, or the age at
which the Participant actually separates from
service if the Employer has no mandatory
retirement age.
2.10 Participant: Any Employee who has
joined the Plan pursuant to the requirements of
Article IV.
2.11 Plan Year: The calendar year.
2.12 Retirement: The first date upon which
both of the following shall have occurred with
respect to a participant: Separation from
Service and attainment of age 65.
2.13 Separation From Service: Severance of
the Participant's employment with the
Employer which constitutes a "separation from
service" with the meaning of Section
402(d)(4)(A)(iii) of the Code. In general, a
Participant shall be deemed to have severed
his/her employment with the Employer for
purposes of this Plan when, in accordance with
the established practices of the Employer, the
employment relationship is considered to have
actually terminated. In the case of a Participant
who is an independent contractor of the
Employer, Separation from Service shall be
deemed to have occurred when the
Participant's contract under which services are
performed has completely expired and
terminated, there is no foreseeable possibility
that the Employer will renew the contract or
enter into a new contract for the Participant's
services, and it is not anticipated that the
Participant will become an Employee of the
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Employer.
ARTICLE M. ADMINISTRATION
3.0t Duties of the Employer: The Employer
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.
3.02 Duties of Administrator: The
Administrator, as agent for the Employer, shall
perform nondiscretionary administrative
functions in connection with the Plan,
including 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
Employer in accordance with the provisions of
this Plan.
ARTICLE IV. PARTICIPATION IN THE
PLAN
4.01 Initial Participation: A new Employee
wilt become a Participant and have
compensation deferred for the calendar month
during which the Participant first becomes an
Employee. An employee of the Employer who
becomes eligible to participate in this Plan shall
become a Participant and have compensation
deferred beginning in the calendar month
following the calendar month in which the
Participant becomes eligible to participate in
this Plan. The minimum amount of Deferred
Compensation for any Participant for any
taxable year shall be 7.5% of Earnings for the
taxable year.
4.02 Changes in Participant Election: A
Participant may change the amount of
compensation not yet earned which is to be
deferred provided that no change may reduce
future deferrals to less than 7.5% of Earnings.
Such change shall become effective as of the
beginning of the calendar month commencing
after the date the change is executed.
ARTICLE V. LLMITATIONS ON
DEFERRALS
5.01 Normal Limitation: Except as provided
in section 5.02, the maximum amount of
Deferred Compensation for any Participant for
any taxable year shall not exceed the lesser of
$7,500.00 or 33-1/3 percent of the
Participant's Includible Compensation for the
taxable year. This limitation will ordinarily be
equivalent to the lesser of $7,500.00 (or any
higher dollar amount permitted under Code
section 457(b) at the beginning of the taxable
year) or 25 percent of the Participant's Normal
Compensation.
5.02 Catch -Up Limitation: For each of the
last three (3) taxable years of a Participant
ending before his/her attainment of Normal
Retirement Age, the maximum amount of
Deferred Compensation shall be the lesser of:
(1) $15,000 or (2) the sum of (i) the Normal
Limitation for the taxable year, and (ii) the
Normal Limitation for each prior taxable year
of the Participant commencing after 1978 less
the amount of the Participant's Deferred
Compensation for such prior taxable years. A
prior taxable year shall be taken into account
under the preceding sentence only if (1) the
Participant was eligible to participate in the
Plan for such year (or in any other eligible
deferred compensation plan established under
Section 457 of the Code which is properly
taken into account pursuant to regulations
under section 457), and (ii) compensation (if
any) deferred under the Plan (-or such other
plan) was subject to the deferral limitations set
forth in Section 5.01
5.03 Other Plans: The amount excludable
from a Participant's gross income under this
Plan or any other eligible deferred
compensation plan under section 457 of the
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Code shall not exceed 57,500.00 (or such
greater amount allowed under Code section
457(b) at the beginning of the taxable year),
less any amount excluded from gross income
under section 403(b), 402(a)(S), or
402(h)(1)(B) of the Code, or any amount with
respect to which a deduction is allowable by
reason of a contribution to an organization
described in section 501(c)(18) of the Code.
ARTICLE VI. INVESTMENTS AND
ACCOUNT VALUES
6.01 Investment of Deferred Compensation:
The Employer shall have all powers with
respect to the investment of the Participant's
Deferred Compensation. All investments of
Participant's Deferred Compensation made by
the Employer, including all property and rights
purchased with such amounts and all income
attributable thereto, shall be the sole property
of the Employer and shall not be held in trust
foi Participants or as collateral security for the
fulfillment of the Employer's obligations under
the Plan. Such property shall be subject to the
claims of general creditors of the Employer,
and no Participant or Beneficiary shall have
any vestedinterest or secured or preferred
position with respect to such property or have
any claim against the Employer except as a
general creditor.
6.02 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, not less frequently than
annually, showing the then current value of
his/her Account.
6.03 Transfers:
(a) Incoming Transfers: A transfer may
be accepted from an eligible deferred
compensation plan maintained by
another employer and credited to a
Participant's Account under the Plan if
(i) the Participant has separated from
service with that employer and become
an Employee of the Employer, and (ii)
the other employer's plan provides that
such transfer will be made. The
Employer may require such
documentation from the predecessor
plan as it deems necessary to
effectuate the transfer, to confirm that
such plan is an eligible deferred
compensation plan within the meaning
of Section 457 of the Code, and to
assure that transfers are provided for
under such plan. The Employer may
refuse to accept a transfer in the form
of assets other than cash, unless the
Employer and the Administrator agree
to hold such other assets under the
Plan. Any such transferred amount
shall be treated as a deferral subject to
the limitations of Article V, except
that, for purposes of applying the
limitations of Sections 5.01 and 5.02,
an amount deferred during any taxable
year under the plan from which the
transfer is accepted shall be treated as
if it has been deferred under this Plan
during such taxable year and
compensation paid by the transferor
employer shall be treated as if it had
been paid by the Employer.
(h) Outgoing Transfers: An amount
may be transferred to an eligible
deferred compensation plan maintained
by another employer, and charged to a
Participant's Account under this Plan,
if (i) the Participant has separated from
service with the Employer and become
an employee of the other employer, (ii)
the other employer's plan provides that
such transfer will be accepted, and (iii)
the Participant and the employers have
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signed such agreements as are
necessary to assure that the
Employer's liability to pay
benefits to the Participant has
been discharged and assumed
by the other employer. The
Employer may require such
documentation from the other
plan as it deems necessary to
effectuate the transfer, to
confirm that such plan is an
eligible deferred compensation
plan within the meaning of
section 457 of the Code, and
to assure that transfers are
provided. for under such plan.
Such transfers shall be made
only under such circumstances
as are permitted under section
457 of the Code and the
regulations thereunder.
6.04 Employer Liability: In no event shall
the Employer's liability to pay benefits to a
Participant under Article VI 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.
ARTICLE VII. BENEFITS
7.01 Retirement Benefits and Election on
Separation from Service:
(a) If a Participant Separates from
Service and the value of his/her
Account at the time of Separation
from Service is $3,500 or less, the
distribution of the Participant's
Account shall be made in one lump
sum as soon as practicable after the
Administrator receives notification
from the Employer that the Participant
has Separated from Service. Such
Participant will not have the right to
irrevocably elect to have the
distribution of benefits commence on a
fixed or determinable date other than
that described herein nor may the
Participant elect an alternate payment
option described in Section 7.02. The
Participant may, however, transfer
his/her Account pursuant to Section
6.03.
(b) If a Participant Separates from
Service and the value of his/her
Account is greater than $3,500 at the
time of Separation from Service, the
distribution of a Participant's Account
shall commence as of April 1 of the
calendar year after the Plan Year of the
Participant's Retirement, and the
distribution of such Retirement
benefits shall be made in accordance
with one of the payment options
described in Section 7.02.
Notwithstanding the foregoing, the
Participant may irrevocably elect
within 60 days following Separation
from Service to have the distribution
of benefits commence on a fixed or
determinable date other than that
described in the preceding sentence
which is at least 61 days after
Separation from Service, but not later
than April 1 of the year following the
year of the Participant's Retirement or
attainment of age 70-1/2, whichever is
later.
7.02 Payment Options: As provided in
Sections 7.01(b), 7.04 and 7.05, a Participant
whose Account value exceeds $3,500 at the
time of Separation from Service or Beneficiary
of a Participant whose Account value exceeds
$3,500 on the date of the Participant's death
may elect to have the value of the Participant's
Account distributed in accordance with one of
the following payment options, provided that
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such option is consistent with the limitations
set forth in Section 7.03.
(a) Equal monthly, quarterly,
semi-annual or annual payments in an
amount chosen by the Participant,
continuing until his/her Account is
exhausted;
(b) One lump -sum payment;
(c) Approximately equal monthly,
quarterly, semi-annual or annual
payments, calculated to continue for a
period certain chosen by the
Participant.
(d) Annual Payments equal to the
minimum distributions required under
Section 401(a)(9) of the Code over the
life expectancy of the Participant or
over the life expectancies of the
Participant and his/her Beneficiary.
(e) Payments equal to payments made
by the issuer of a retirement annuity
policy acquired by the Employer.
(f) Any other payment option elected
by the Participant and agreed to by the
Employer and Administrator, provided
that such option must provide for
substantially nonincreasing payments
for any period after the latest benefit
commencement date under Section
7.01.
A Participant's or Beneficiary's election of a
payment option must be made at least 30 days
before the payment of benefits is to
commence. If a Participant or Beneficiary fails
to rr.ake a timely election of a payment option,
benefits shall be paid monthly under option (c)
above for a period of five years.
7.03 Limitation on Options: No payment
option may be selected by a Participant or
Beneficiary under Sections 7.02, 7.04, or 7.05
unless it provides that the amount of any
annual installment is not less than S3,500 per
year. No payment option may be selected by
a Participant or Beneficiary under Sections
7.02, 7.04, or 7.05 unless it satisfies the
requirements of Sections 401(a)(9) and
457(d)(2) of the Code, including that
payments commencing before the death of the
Participant shall satisfy the incidental death
benefits requirement under section
457(d)(2)(B)(i)(l). Unless otherwise elected
by the Participant, all determinations under
Section 401(a)(9) shall be made without
recalculation of life expectancies.
7.04 Post -retirement Death Benefits:
(a) Should the Participant die after
he/she has begun to receive benefits
under a payment option, the remaining
payments, if any, under the pay-ment
option shall be payable to the
Participant's Beneficiary within the
30 -day period commencing with the
61st day after the Participant's death,
unless the Beneficiary elects payment
under a different payment option that
is available under Section 7.02 within
60 days of the Participant's death. Any
different payment option elected by a
Beneficiary under this section must
provide for payments at a rate that is at
least as rapid under the payment
option that was applicable to the
Participant. In no event shall the
Employer or Administrator be liable to
the Beneficiary for the amount of any
payment made in the name of the
Participant before the Administrator
receives proof of death of the
Participant.
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(b) 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 estate of the Beneficiary. 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
estate in a lump sum.
7.05 Pre -retirement Death .Benefits:
(a) Should the Participant die before
he/she has begun to receive the
benefits provided by Section 7.01(a),
the value of the Participant's Account
shall be payable to the Beneficiary in
one lump sum as soon as practicable
after the 90th day following the
Participant's date of death or as soon
thereafter as the Administrator
receives notification that the
Participant has died.
(b) Should the Participant die before
he/she has begun to receive the
benefits provided by Section 7.02(b),
and the value of the Participant's
Account exceeds $3,500 on the date of
the Participant's death, the value of the
Participant's Account shall be payable
to the Beneficiary commencing within
the 30 -day period commencing on the
91st day after the Participant's death,
unless the Beneficiary elects a different
fixed or determinable benefit
commencement date within 90 days of
the Participant's death. Such benefit
commencement date shall be not later
than the later of (i) December 31 of the
year following the year of the
Participant's death, or (ii) if the
Beneficiary is the Participant's spouse,
December 31 of the year in which the
Participant would have attained age
70-1/2.
Unless a Beneficiary elects a different
payment option prior to the benefit
commencement date, death, benefits
under this Section shall be paid in
approximately equal annual
installments over five years, or over
such shorter period as may be
necessary to assure that the amount of
any annual installment is not less than
53,500. A Beneficiary shall be treated
as if he/she were a Participant for
purposes of determining the payment
options .available under Section 7.02,
provided, however, that the payment
option chosen by the Beneficiary must
provide for payments to the
Beneficiary over a period no longer
than the life expectancy of the
Beneficiary, and provided that such
period may not exceed (15) years if the
Beneficiary is not the Participant's
spouse.
(c) In the event that the Beneficiary
dies before the payment of death
benefits has commenced or been
completed, the remaining value of the
Participant's Account shall be paid to
the estate of the Beneficiary in a lump
sum. In the event that the Participant's
estate is the Beneficiary, payment shall
be made to the estate in a lump sum.
7.06 Unforeseeable Emergencies:
(a) In the event an unforeseeable
emergency occurs, a Participant may
apply to the Employer to receive that
part of the value of his/her Account
that is reasonably needed to satisfy the
emergency need. If such an application
is approved by the Employer, the
7/1/96 7
Participant shall be paid only such
amount as the Employer deems
necessary to meet the emergency need,
but payment shall not be made to the
extent that the financial hardship may
be relieved through cessation of
deferral under the Plan, insurance or
other reimbursement, or liquidation of
other assets to the extent such
liquidation would not itself cause
severe financial hardship.
(b) An unforeseeable emergency shall
be deemed to involve only
circumstances of severe financial
hardship to the Participant resulting
from a sudden unexpected illness,
accident, or disability of the Participant
or of a dependent (as defined in
section 152(a) of the Code) of the
Participant, loss of the Participant's
property due to casualty, or other
similar and extraordinary unforeseeable
circumstances arising as a result of
events beyond the control of the
Participant. The need to send a
Participant's child to college or to
purchase a new home shall not be
considered unforeseeable emergencies.
The determination as to whether such
an unforeseeable emergency exists
shall be based on the merits of each
individual case.
ARTICLE VIII. NON -ASSIGNABILITY
8.01 In General: Except as provided in
Section 8.02, no Participant or Beneficiary
shall have any right to commute, sell, assign,
pledge, transfer or otherwise convey or
encumber the right to receive any payments
hereunder, which payments and rights are
expressly declared to be non -assignable and
non -transferable.
8.02 Domestic Relations Orders:
(a) Allowance of Transfers: To the
extent required under final judgement,
decree, or order (including approval of
a property settlement agreement) made
pursuant to a state domestic relations
law, any portion of a Participant's
Account may be paid or set aside for
payment to a spouse, former spouse,
or child of the Participant. 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 sum at the earliest date
that benefits may be paid to the
Participant, unless the order directs a
different time or form of payment.
Nothing in this Section shall be
construed to authorize any amount to
be distributed under the Plan at a time
or in a form that is not permitted under
Section 457 of the Code. Any payment
made to a person other than the
Participant pursuant to this Section
shall be reduced by required income
tax withholding; the fact that payment
is made to a person other than the
Participant may no1. prevent such
payment from being includible in the
gross income of the Participant for
withholding and income tax reporting
purposes.
(b) 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 Section. No such transfer shall be
7/1/96
8
effectuated unless the
Employer or Administrator has
been provided with satisfactory
evidence that the Employer
and the Administrator are
released from any further claim
by the Participant with respect
to such amounts. The
Participant shall be deemed to
have released the Employer
and the Administrator from
any claim with respect to such
amounts, in any case in which
(i) the Employer or
Administrator 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 or Administrator 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 or Administrator
from the obligation to comply
with the judgment, decree, or
order.
(c) Participation in Legal Proceedings:
The Employer and Administrator shall
not be obligated to defend against or
set aside any judgement, decree, or
order described in paragraph (a) 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 or Administrator to incur
such expense, the amount of the
expense may be charged against the
Participant's Account ;nd 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 and Administrator 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.
ARTICLE IX. RELATIONSHIP TO
OTHER PLANS AND EMPLOYMENT
AGREEMENTS
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 Employer's employees,
and participation hereunder shall not affect
benefits receivable under any such plan or
system. 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.
ARTICLE X. AMENDMENT OR
TEED 1lNATION OF PLAN
The Employer may at any time amend this Plan
provided that it transmits such amendment in
writing to the Administrator at least 30 days
prior to the effective date of the amendment.
The consent of the Administrator shall not be
7/1196
.9
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required in order for such amendment to
become effective, but the Administrator shall
be under no obligation to continue acting as
Administrator hereunder if it disapproves of
such amendment. The Employer may at any
time terminate this Plan.
Upon termination of this Plan by the
Employer, all Accounts will be distributed to
Participants and Beneficiaries in one lump sum
as soon as practicable following written
notification to the Administrator by the
Employer that the Plan is terminated.
The Administrator may at any time propose an
amendment to the Plan by an instrument in
writing transmitted to the Employer at least 30
days before the effective date of the
amendment. Such amendment shall become
effective unless, within such 30 -day period, the
Employer notifies the Administrator in writing
that it disapproves such amendment, in which
case such amendment shall not become
effective. In the event of such disapproval, the
Administrator shall be under no obligation to
continue acting as Administrator hereunder. If
this Plan document constitutes an amendment
and restatement of the Plan as previously
adopted by the Employer, the amendments
contained herein shall become effective on
January I, 1996, and the terms of the
preceding Plan document shall remain in effect
through December 31, 1995.
Except as may be required to maintain the
status of the Plan as an eligible deferred
compensation plan under section 457 of the
Code or to comply with other applicable laws,
no amendment or termination of the Plan shall
divest any Participant of any rights with
respect to compensation deferred before the
date of the amendment or termination.
ARTICLE XL APPLICABLE LAW
This Plan shall be construed under the laws of
the state where the Employer is located and is
established with the intent that it meet the
requirements of an "eligible deferred
compensation plan" under Section 457 of the
Code, as amended. The provisions of this Plan
shall be interpreted wherever possible in
conformity with the requirements of that
section.
ARTICLE XII. GENDER AND NUMBER
The masculine pronoun whenever used herein,
shall include the feminine pronoun, and the
singular shall include the plural, except where
the context requires otherwise.
7/1/96 10
ICMA
RETIREMENT
CORPORATION
ADMINISTRATIVE SERVICES AGREEMENT
Type: 457
Account Number: 3953
EXHIBIT 8
•
Plan .53
I CSI A
RETIREMENT
CORPORATION
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement, made as of the day of
, 199 , (herein referred to as the "Inception Date"), between The International
City Management Association Retirement Corporation ("RC"), a nonprofit corporation
organized and existing under the laws of the State of Delaware; and the City of Palo
Alto PTS ("Employer") a City organized and existing under the laws of the State of
California with an office at 250 Hamilton Avenue, Palo Alto, California 94301-2531,
Recitals
Employer acts as a public plan sponsor for a retirement plan ("Plan") with
responsibility to obtain investment alternatives and services for part-time, seasonal
and temporary employees participating in that Plan;
The ICMA Retirement Trust (the "Trust") is a common law trust governed
by an elected Board of Trustees for the commingled investment of retirement funds
held by state and local governmental units for their employees;
RC acts as investment adviser to the Trust; RC has designed, and the
Trust offers, a series of separate funds (the "Funds") for the investment of plan
assets as referenced in the Trust's principal disclosure document, "Making Sound
Investment Decisions:, A Retirement Investment Guide." The Funds are available only
to public employers and only through the Trust and RC. However, investment in the
PLUS Fund is the only option available to participants in this plan.
In addition to serving as investment adviser to the Trust, RC provides a
complete offering of services to public employers for the operation of employee
retirement plans including, but not limited to, communications concerning investment
alternatives, account maintenance, account record -keeping, investment and tax
reporting, form processing, benefit disbursement and asset management.
This Agreement supersedes the prior Administrative Services Agreement
entered into between the parties on or about August 22, 1994.
2
Plan 4,53
ICMA
RETIREMENT
CORPORATION
Agreernents
1. Appointment of_RC
Employer hereby designates RC as Administrator of the Plan to perform
all non -discretionary functions necessary for the administration of the Plan with
respect to assets in the Plan deposited with the Trust. The functions to be performed
by RC include:
(a) maintenance of individual accounts for participants reflecting
amounts deferred, income, gain, or loss credited, and amounts disbursed as benefits;
(b) provision of periodic reports to the Employer and participants of the
status of Plan investments and individual accounts;
(c) communication to participants of information regarding their rights
and elections under the Plan; and
(d) disbursement of benefits as agent for the Employer in accordance
with terms of the Plan.
2. Fnipinyer_Agreements
Employer agrees to the following with respect to the plan:
(a) there is no necessity for individual employee signatures upon
enrollment and/or disbursement;
(b) if the employee's address is not provided upon enrollment by the
Employer, then the Employer's address will be used as the contact address; and
(c) Employer will provide employees with communications on employee
right to file a W-4 form along with the Employer's request for disbursement.
3. LIMA RETIREMENT TRI IST
Employer continues to be a party to the Declaration of Trust of the ICMA
Retirement Trust and agrees that operation of the Plan and investment, management
and disbursement of amounts deposited in the Trust shall be subject to the
Declaration of Trust, as it may be amended from time to time and shall also be
subject to terms and conditions set forth in disclosure documents (such as the
Retirement Investment Guide or Employer Bulletins) as those terms and conditions
may be adjusted from time to time. It is understood that the term "Employer Trust"
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Plan #410t3
ICMA
RETIRESMEtiT
CORPORATION
as it is used in the Declaration of Trust shall mean this Administrative Services
Agreement.
4. Fmployer Duty to FurnishInforrnation
Employer agrees to furnish to RC on a timely basis such information as
is necessary for RC to carry out its responsibilities as Administrator of the Plan,
including information needed to allocate individual participant accounts to Funds in
the Trust, and information as to the employment status of participants, and
participant ages, addresses and other identifying information (including tax
identification numbers). RC shall be entitled to rely upon the accuracy of any
information that is furnished to it by a responsible official of the Employer or any
information relating to an individual participant or beneficiary that is furnished by such
participant or beneficiary, and RC shall not be responsible for any error arising from
its reliance on such information. If within ninety (90) days after the mailing of any
report, statement or accounting to the Employer or a participant, the Employer or
participant has not notified RC in writing of any error or objection, such report,
statement, or accounting shall be deemed to have been accepted by the Employer
and the participants.
5. C:ertain_13epresentations.-Warrarlties_and Co tenants
RC represents and warrants to Employer that:
(a) RC is a non-profit corporation with full power and authority to enter
into this Agreement and to perform its obligations under this Agreement. The ability
of RC to serve as investment adviser to the Trust is dependent upon the continued
willingness of the Trust for RC to serve in that capacity.
(b) RC is an investment adviser registered as such with the Securities
and Exchange Commission under the Investment Advisers Act of 1940, as amended.
iCMA-RC Services, Inc. (a wholly owned subsidiary of RC) is registered as a broker -
dealer with the Securities and Exchange Commission (SEC) and is a member in good
standing of the National Association of Securities Dealers, Inc.
RC covenants with employer that:
(c) RC shalt maintain and administer the Plan in compliance with the
requirements for eligible deferred compensation plans under Section 457 of the
Internal Revenue Code; provided, however, RC shall not be responsible for the eligible
status of the Plan in the event that the Employer directs RC to administer the Plan or
disburse assets in a manner inconsistent with the requirements of Section 457 or
otherwise causes the Plan not to be carried out in accordance with its terms;
-4-
Plan # 39.
- ICMA
RETIREMENT
CORPORATION
provided, further, that if the plan document used by the Employer contains terms that
differ from the terms of RC's standardized plan document, RC shall not be responsible
for the eligible status of the Plan to the extent affected by the differing terms in the
Employer's plan document.
Employer represents and warrants to RC that:
(d) Employer is organized in the form and manner recited in the opening
paragraph of this Agreement with full power and authority to enter into and perform
its obligations under this Agreement and to act for the Plan and participants in the
manner contemplated in this Agreement. Execution, delivery, and performance of this
Agreement will not conflict with any law, rule, regulation or contract by which the
Employer is bound or to which it is a party.
6. Partiripatinn in Cartain Proceedings
The Employer hereby authorizes RC to act as agent, to appear on its
behalf, and to join the Employer as a necessary party in all legal proceedings involving
the garnishment of benefits or the transfer of benefits pursuant to the divorce or
separation of participants in the Employer Plan. The Employer consents to the
disbursement by RC of benefits that have been garnished or transferred to a former
spouse, spouse or child pursuant to a domestic relations order.
7. Co.mpenatinn and Payment
(a) Plan Administration Fee. The amount to be paid for plan
administration services under this Agreement shall be 0.75% per annum of the
amount of Plan assets invested in the Trust. Such fee shall be computed and paid
monthly on plan assets in the Trust at the end of each month.
(b) Account Maintenance Fee. There shall be an annual account
maintenance fee of $ 18.00. The account maintenance fee is payable in full on
January 1 of each year on each account in existence on that date. For accounts
established after January 1, the fee is payable on the first day of the calendar quarter
following establishment and is prorated by reference to the number of calendar
quarters remaining on the day of payment.
(c) Compensation for Advisory Services to the Trust. Employer
acknowledges that in addition to amounts payable under this Agreement, RC receives
fees from the Trust for investment advisory services furnished to the Trust.
(d) Payment Procedures. (i) All payments to RC pursuant to Section
7(a) shall be paid out of the Plan Assets held by the Trust and shall be paid by the
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Plan #3
ICMA
RETIREMENT
CORPORATION
Trust. The amount of Plan Assets held in the Trust shall be adjusted by the Trust as
required to reflect such payments. (ii) All payments to RC pursuant to Section 7(b)
shall be paid directly by Employer, and shall not be deducted from Plan Assets held
by the Trust.
8. Custody
Employer understands that amounts invested in the Trust are to be
remitted directly to the Trust in accordance with instructions provided to Employer
by RC and are not to be remitted to RC. In the event that any check or wire transfer
is incorrectly labeled or transferred to RC, RC is authorized, acting on behalf of the
transferor, to transfer such check or wire transfer to the Trust.
9. Bespnnsihility
RC shall not be responsible for any acts or omissions of any person other
than RC in connection with the administration or operation of the Plan.
10. Ierm
This Agreement may be terminated without penalty by either party on
sixty days advance notice in writing to the other.
11. Amendments and Adjustments
(a) This Agreement may not be amended except by written instrument
signed by the parties.
(b) The parties agree that compensation for services under this
Agreement and administrative and operational arrangements may be adjusted as
follows:
RC may propose an adjustment by written notice to the Employer given
at least 60 days before the effective date of the adjustment and the notice may
appear in disclosure documents such as Employer Bulletins and the Retirement
Investment Guide. Such adjustment shall become effective unless, within the 60 day
period before the effective date the Employer notifies RC in writing that it does not
accept such adjustment, in which even the parties shall negotiate with respect to the
adjustment.
(c) No failure to exercise and no delay in exercising any right, remedy,
power or privilege hereunder shall operate as a waiver of such right, remedy, power
or privilege.
6
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Plan
53
ICMA
RETIREMENT
CORPORATION
12. Notices
All notices required to be delivered under Section 11 of this Agreement
shall be delivered personally or by registered or certified mail, postage prepaid, return
receipt requested, to (i) Legai Department, ICMA Retirement Corporation, 777 North
Capitol Street, N.E., Suite 600, Washington, D.C, 20002-4240; (ii) Employer at the
office set forth in the first paragraph hereof, or to any other address designated by
the party to receive the same by written notice similarly given.
13. Complete Agreement
This Agreement shall constitute the sole agreement between RC and
Employer relating to the object of this Agreement and correctly sets forth the
complete rights, duties and obligations of each party to the other as of its date. Any
prior agreements, promises, negotiations or representations, verbal or otherwise, not
expressly set forth in this Agreement are of no force and effect.
14. Governing. l aw
This agreement shall be governed by and construed in accordance with
the laws of the State of California applicable to contracts made in that jurisdiction
without reference to its conflicts of laws provisions.
7
4 -
Plan 053
ICMA
RETIREMENT
CORPORATION
In Witness Whereof, the parties hereto have executed this Agreement
as of the Inception Date first above written.
ATTEST:
CITY OF PALO ALTO PTS
by• %% ..r
City Clerk Mayor
APPROVED AS TO FORM:
enior Asst. City Attorney
Director of Human Resources
Deputy City Manager,
Administrative Services
Risk Manager
INTERNATIONAL CITY MANAGEMENT
ASSOCIATION RETIREMENT
CORPORATION
by:
Stephen Wm. Nordholt/Date
Corporate Secretary
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