HomeMy WebLinkAbout0185.094-~.
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March 17, 1994
THE HONORABLE CITY COUNCIL
Palo Alto. California
Dapepdept Care As.iat'DC! Plan for Bligible City Employees
Members of the Council:
llIrport in Brief
7
This report requ~9ta the Council to adopt the attached reBol~tions
amending the City of Palo Alto's Dependent Care Assistance (IRe
sec. 129) and Flexible Benefits Plan (IRe Sec. 125). These
resolutions reflect a single technical change to Section 10.3 of
each Plan Document. to reference the Merit Rules and Regula.tions
with respect to continued employment.
Baclwrpupd
The Dependent Care Assistance Plan and Flexible Benefits Plan were
adopted by Resolutions 6720 and 6119, respectbrelY. Both plans
became effective July 30, 1969 for the SEIU bargaining unit.
Management, Confidential, Council Appointed Officers, Fire and
PQlice employees also became eligible for the Plan after the
implementation of the Compensation Plan effective July 2, .l9BB,
adopted by Resolution 6728 and subsequently amended by Re~olution
6734.
As these contracts deal with the Internal Reven';J.e Code. the City
periodically has these contracts reviewed h".l legal counsel ~ After
review by counsel, it is necessary to amend Section 10.3 of both
documents.
The language is being changed from:
·Excep~ as otherwise expressly agreed to by the Employee and
the City, each Employee is at will and may he terminated by
the City at any time-tQ!
WEach Employee's rights with respect to continuing employment
with the City are established by the Merit System Rules and
Regula t: ions· .
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Staff recommends that the Council adopt the attached Resolutions
amendin9' the Flexible Benefits Plan and the Dependent Care
Assistance Plan.
Respectf ly submitced~
Benefits
Director of Human Resources
Att.achments
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
ALTO AOOPTrNG AN A.~'"DMENT TO THE CITY OF PALO
ALTO FLEXIBLE BENEFI'rs PLAN
WHEREAS, the City of Palo Alto (the "City") maintains the
City of Palo Alto Flexible Benefits Plan (the ·Plarl·) which is
intended to qualify as a cafeteria Pl~ under section 125 of the
Internal Revenue Code of 1986, as amended (the ·Code·); and
~, the City CQuncil wishes to adopt certain
technical amendments to the Plan, as hereinafter set forth I in
conformance with amendments to the Code and regulations prcmulgat.ed
pursuant thereto, effective January 1, 1993j and
WH8RRAS, the City is permitted to ~nd the Plan pursuant
to Section 6.1 of the Plan.
NOW, THEREFORE. the Council cf the City ot Palo Alto does
RESOLVE as follows:
SHerlON 1 The City Council hereby approves the
amendment of the Plan by adoption of that certain document entitled
·City of Palo Alto Flexible Benefits Plan--Amended and Restated
8ffective January 1, 1993,· a copy of which is attached hereco and
inco~rated herein by reference.
SECTION 2 The Council finds that this is not a project
under the California Bnvironmental Quality Act.
INTRODUCED AND PASSED,
AYES,
NOES,
ABSENT,
ABSTENTIONS,
ATTEST,
City C:lerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
94013 L lac 0Q30I69
APPROVED,
fooI'.ayor
City Manager
Director of Finance
Director ot Human Resources
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cnI' OF PALO ALTO
FLEXIBLE BENEFITS PLAN
Amended and Restated Effective January 1, 1993
A.IUICLE I
ARTICLE II
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
2.12
2.13
2.]4
2.15
2.16
2.17
2.18
ARTICLE III
3.1
3.2
3.3
3.4
3.5
ARTICLE IV
4.1
4.2
4.3
ART1C!.E V
5.1
5.2
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CITY OF PALO ALTO
FLEXIBLE BENEFITS PL<\N
Amendecd and Restated Effective J~nll:lry 1, )99.3
TABL.E OF CONTENTS
INTRODUCTION .................................... .
DEFINITIONS
Benefit Plans ........................................ .
City ................•....................•..........
City Councll ....................•............. _ ...... .
Code .............................................. .
Dependent Care Plan . , ................................ .
Effective Date ................ _ ................ __ .... .
Eliglble Employee .................................... .
Employee .........•..................................
Employee ContnbuiJOD .... _ .................. _ ......... .
EnrcUrnent Fonn ..•.... _ •.............................
Highly Compensated Individual .......................... .
Highly Compensated ParticipD!1t .......................... .
Key Employee ...................................... ..
Open Eruollment Period ............................... .
Participant .................................... , ..... .
Plan .............................................. .
Plan Administrator ................................ , ... .
Plan Year .......................................... .
ELIGIBILITY AND PARTICIPATION ..........•...... , .. .
Commencement of Participation ............ , ............. .
Termination of Participafion ............ , ................ .
Reinstatement of Former Par'idpant ........ , ............. .
Reinstatement of Suspended Par1icipJ.nl .............. _ ..... .
D&rimination Limitations .............................. .
BENEFITS .•............ , .......................... .
Benefit PlClns ........................................ .
Benefit Plan Selection ................................. .
Description of Benefits Other TrJ<ln C .. ~h ....
ENROLLMENT ................... .
Enrollment of Newly Eligibh:: Emp~oye,~s
Open Enrollment Period ....... .
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1
2
2
2
2
2
2
2
2
2
3
3
3
3
3
3
3
4
4
5
G
7
7
7
7
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5.3 Fallure to Etect ......................................... 9
5A Irrevocability of Election by the Participant During the Plan Year.. 9
55 Forfeiture of Unused B<:neLts .......•................... 10
ARTIClE VII
7.1
7.2
7.3
CONTRIBUTIONS .................................. .
Employee Contriliut~Qn .. ~ ............................. .
Allocation of ContrLbutions .............................. .
ADMINISTRATION OF PiAN .•.........•..............
Plan Administrator. , .•......•.........................
Examination of Records ................................. ~
lndemnification of Plan Administrator .....•......... ~ ...... .
10
10
10
11
11
12
12
ARTICLE VIII BENEFIT CLAIMS PROCEDURE....................... 12
ARTICLE IX
9.1
9,2
,A.RTIO.E X
Hl.I
10.2
10.3
]0.4
10.5
10.6
10.7
10.B
10.9
A.VlENDMENT OR TERMINATION OF PLAN' . . .. . . . . .. . .. 12
Amendment or Termination of Plan .. ~ . . . . . . . . . . . . . . . . . . .. 12
Authority of Plan Administrator ....... , ....... ,.......... 13
MISCEllANEOUS PROVISIONS ........................ 13
Exdusive Benefit ...................................... 13
Information To Be Furnished. .. . • . . . . • . . . . • . . . . • . . . . . . . .. 13
Limitation of Rights .. . . . . . . . . . . . . • . . . . • . . . . • . . . . • . . . . . 13
Benefits Solely From General Assets ...............•...... 14
N onassignability of Rights . . . . . . . . . • . . . . . . . . . • . . . . • . . . • .. 14
Gender and Number ................................... 15
Titles .. . • . . . . • . . . . . . . . . . . . . • . . . . . . . . . . • . . . . • . . . . • .. 15
Governing L.a'", .............................. ~ • . • • • • .• 15
Severability ......................................... 15
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CITY OF PALO ALTO
FlEXIBLE BENEFITS PlAN
AlDended aJUl Restated Effective January I, 1993
ARTICLE I
I!'.TRODUCTlON
The City of Palo A1to F1exibTe Benefits Plan, originally effective July 30, 1988 and
amended and restated as 'Set forth herein effective January 1, 1993, is main.ained by the
City of Palo Alto for the purp05e of pIO".riding Eligible Employees with a choice between
cash and the opportunity to pay for dependent care expenses and such other benefits.
under the various Benefit Plnns as may from time to lime be offered under Ihe Plan with
pre-tax doDars. The Plan .is intended Ie· qua1ify as a c:;.feteria plan under section 125 Df
the Code, and is to be imerpretcd in a manner consistent with section 125 of the Code.
ARTICLE II
DEFINITIONS
2.1 "Benefli Plans'" meam all benefit plans avaii.1hie for election by.a
PaT1icipant ru; descnbed in more detail in Section 4.1.
2.2 "Q!y" means the City of Palo Alto.
2.3 "City Council" me;mSo the gDverning legis.lative body of the City, m
con~tituled from time to time.
2.4 "h:.od~" means. the lrltefIl:ll Revenue Code of 198(j, and the re,gulalion.'> <1m.!
!ulJngs i~~ued purSu<.lnl thereto, <.Ill <l~ in effeci ,~r.d Cinlci1(k:d fmm lime II) time.
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2.5 "Denendenl Cine P!,U]" m~ans tilt; Cily of Palo A!tO Dependent C<:!r~
Assislance Plan 1 as amended from time to time, the term:. of which shall be incorporo'ltcd
;n!O the Pla~ by reference.
2.6 "Effective Date" of the amended and restated Plan meClns .'anu:uy I, 1993.
2.7 "Eligible Employee" means each Employee who is eligible to participaie in
any Benefit Plan maintained by the Ci!y and whose participation is provided for in an
applicable Memorandum of Understanding or Compensation Pian.
2.8 "Employee" me~ns a person who receives remuneration for rendering
sen'ices to the City, any portion of whose income is subjc:ct to withholding of jiicome t3:<
and/or employment tax by the City, as weB as any other person qualifying as 2 common
law employee of the City.
2.9 "gmployee (.ontdbution" meam the contr[bution which a Participant elects
to make as a reduction in compensation to pay for benefits under one or more Benefit
Plans be or she has chosen under the Plan, as set forth in Section 6.1. Emp10yee
ContnoutEons are made on a pre-tax basis by payron deduction.
2.10 "Enrollment Form" means the form which an Employee shail COTi1pletC in
order to s,eJect the Benefit Plans offered under the Plan.
2.11 "Highly CompensJ!:1~_g_l.D_djvi~!l"'1!" means any Employee who is a highly
compensated individual as defined in section 125(e)(2) of the Code.
2.12 "Highfy CQ!l1P_(")J~ated Particip,mt" mean!'. .a Participan! who is a. highly
compensa'ed Participant as defined in sectiorl 12S(e)(I) af the Code.
2.13 "Key Employe!!" IT,eam; <In)' per. ... on Wh0 is <J key elTIrloyc~ Gi~ defined iil
,ection 416(1)(1) of the Code,
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2.14 "~n Enrollment PerJQ.Q" mean:) the period sdect-=:d by the Plan
Administrator during which Eligfble Employe~s may elect benefits for the following Plan
Year.
2.1.5 "PartIf1p-ant" means an Eligible EmpJcyt'c who becomes a Panicipant in the
Plan pursuant to the 1erms of Article Hr.
2.16 "P:an" means the City of Palo Alto flexible Benefits Plan as set forth
herein, together wtth any and an amendments thereto.
2.17 "Plan Administrator" means tne committe-e or indh:idual appointed by the
City from time to time 10 adminis!er the FInn.
2.18 "Plan Year" me.<:flS a i2-month period ending wlth the last pay period of
fhe ca]endar year.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Conum~-ncement of Participation. Each Eiigtble Employee may participate
in the Plan subject to his or her electior:: made pursuant fa the provisions of Article V.
3.2 Termination of Participation
(a) A Participi:!nt will cease to be a Participant in the Plan as of the
earliest of (1) the dale on which the Plan terminates, (2) the date on which the
Participant ceases to be an Eligible Employee ,JOd h;:Js. $0 credited to hi<; or her <lccount
under the Pl£ln, or (3) the dnte on ,,,'hic::h 1he P<Jrtici;JCHlt's h.:nerit elec:ioIl ptmu.flnt to
Article V expins or termin,:',tes in (Ic{;ordan<::e with A.rlkJe V. Hmvever, henefits under
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the Benefit PliJm 1'1ecleJ when pJrtil:ipation ce,Jses shall (ontinu~ to the e"tent specific:J
in such B'!!nefit Plans.
(b) A P.<lrtkip.mt's ejection to rec~i\'e benefits under a given Benefit
Plvn and ccrresponding salary reduction authorization to pay for benefits lJilde. that
Benefit Plan shan autamatlcally cease either when the ParticipGnt is no Fonger eligible for
coverage under such Benefit Plan or the Panidpllnt dects to -cease participation in such
B:ellefit Plan in accordance with the terms of such Benefit Pian and the Plan.
(c) In the event that a PClrticipant t!; no longer an Eligible Employee
during a Plan Year, Employee Contributions sh an ce .. se and the Participant will be
entitled to receive the benefits under the Benefit Plans for which Employee
Contnbutions have beer:l made in accordance with the provisions of such Benefit Plans.
(d) Subject to any specific limitations which the City shan impose under
a Bel .!fit Plan, (i) partiCipation shaU continue during a leave of absence during which the
Participant continues to receive compensation from the City and eii) partidpati:m shall
be suspended during an unpaid leave of abserce.
3.3 Reimitater.1ent of Fonner Pa_r~_cipan!.
(a) A former Participant who once again becomes .!in Eligible Employee
may enroll in the Plan in accordnnce with Artide V.
(b) A former Particirnflt who at all times remains an Eligible Ernpioyee
mayenrotl in the Plan in accordance with Secliom 5.1 ;::nd 5.4.
(c) Notwi!hst~lnding the foregoing, tJ Pnrticip<lflt who terminates
parlicipiHion in the Pli.ln due to his or her termin<ltioI1 uf employment (juring a Plan Yem
may not re-enroll j,'"1 tlH:: PJ,!n during 111:1: silme PI<ln Ytilf.
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(3) A suspended Pi:lrticipJ.nl who once ag<!in becomes. an Eligible
Employee after an unpaid leave uf absence of 30 days or less 5.hall resume participalion
upon return to work, provided such return is within the same Plan Year. The
\\oithholding for such a Partkipant shall be the same amount afler tI-le Parliclpailt re:lumes
participation as it was prior to the unpaid leave of <Ihsence, with no adjustment for the
lime C:uring the uopaid leave of absence when roo withholding occurred. Every other
Participant who is on an unpaid. :e?\'e of tlbsence resumes panicipJ.:ion as soon as
administratively feasible after c.omplering. signir.g and filing <J.n Enrollment Form with the
Plan Administrator, and such Enrollment Form shall be effective, subject 10 Section 5.4 ,
for the period beg[nning on t'ti.e date determined by the Plan Admirli~trator and ending
on the !ast day of the Plan Year during which such form was filed.
(b) If a suspended Participant resumes paIticipation after an unpaid
leave of absence in the same Plan Year as the 'Jr,paid ieave of absence began, the
benefits elected for the remainder of the sud PI<ln Year snall be identical to thnse
benefits, if any elected at the beginnirlg of s .... Jch Plfln Year; except 2S othcf\llo';.se permitted
in Section 5A.
3.5 Discriminalion Limi!<ltio'1~.
(a) The Plan shall not discriminate in favor of Highly Ccmpensa!ed
lnuividuals as 10 eliglhi!ily to participate or Highly Compcma!ed PoHticipOJrHs .as. to
contributions ~nd hendits. In addiLion, nl) more than twer:i}~f;'le percenl (25~'o) of the
aggregHle :lmounts p<Jid ur.dcr the Pbn J'oIrins ,111)' Plan YC;-Ir .'.h;llI hI: p;i.ill to Key
Employees.
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(b) If the Plan AdJ1!irlisir<nor determine~, before or during <l.I'y Plan
Year, that the Pian m(lY fail to sa:isfy for such PliJn Year any of t~e nondiscrimin~tion
requirements set fruth in paragraph (:0) abQ"."e or an)' other nOfldiscril]1.in.ation
requirement which applies 10 a Benefil Plan, the Plan AdministrCltor may mOdify the
elections of all those Participants who are Highty Ccmpellsated Pa!1icipants, Key
Employees or highly compensated empToyees within the meaning of $ection 414(q) of the
Code. In the event that the elections of some Participants: are modified, such elections
shall be modified for any such affected Participant by redudng the Employee
Contnbution of such affected PClrticip"m in the proportion that such affected
Participant's compensation bears to the compensation of all such affected Participant.:;
during the Pl~n Year untll the Plnn is in compliance ~ith the applicabie
nondiscrimination requirements. For purposes of this Section 3.5(b). compens-arion shaD
mean wages within the meaning of sec!ion 3401(a) of the Code (Le., wages for purposes
of income tax: -..withholding), at the effective date of the modification of the elections. The
PJan Administrator shall determine in which order the Benefit Plans offered under the
Plan shall be affected by sucb modifications of elections in its sole discretion, pu!".!;uant to
rules uniformly applied 10 similarly situated Panicipants.
ARTiCLE IV
4.1 Benefit Plans. A Partkip~mt m::ly seieci Clmong the follnwing BCllcfit PJnns
for each Plan YecH:
ll',,-VI;1
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(a) DCp~i1(jL"nl Om: Pian;
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(b) Such o:hi!r Bent':fil Plans a~ th<:: PJ<Jn Adminislr.alor may dc;s.ignate
from time: ~o time.
The Benefit Plan ... to be offered under tte Plan shall be s.electe-d at the discretion
of the Plan Administrator and m8Y be prospectively changed at any time upon wIilten
notice to Participants and Eligible Employees.
4.2 Ben~Jit Pian Selection. A Participant shaH designate on the EmolIment
Form those Benefit Plans described in Section 4.1 which he or she selects. If a
Participant has elected to receive benefits from the Dependent Care Plan, the Participant
shaD a1so designate the amoLinl of h!s or her Employee Contnbution to be allocated to
such Benefit Plan.
4.3 Description of Benefj1s Other ThJiO Cas.h. While the election to rec..::ive
benefits from one, or more of the Beflefit Plam describr.d in Section 4.1 sh.::lli be made
under the Plan, the benefits 'Will be piOvided not by the P!an but by the particular Benefit
Plan. The types and amounts of benefits availabl~ under each optional Benefit Plan
described in Section 4.11 the requirements for participating in suclj Ben-::,:fit Plan.~ and the
other terms and conditions of ccverage and benefit5 un .. :'lei such Benefit Plans, are as set
forth FIom time to time in the documents that cum.!ilute (or arc incorporated by
reference in) such Benefit Plans, The Benefit Plans are hereby incorporated by
reference into the Plan. Any <lmendmenL<:' to such Benefit Plans are also to be
inco.r~orated by reference autolTlalicaHy into !he PJ.:u,;.
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ARTICLE V
£.'iROLLMENT
5.1 Enrollment of Newly Eligihle EmQkJ)'ces.
(a) If a newly EligibJe Employee ",;,shes to receive ber;efits from one or
more of the Benefit Plans dc::scr~d in Section 4.11 such newly Eligible Employee shall
complete, sign and return the EruoOment Form to the Plan Administl'ator before the pzy
period fonowing the first day of the month after the Employee's date of hire by the City
(the ~nronment Date"'). Ar:y election by the !lewly Eligible Employee shal~ subject to
Sections 5.2 and 5A-1 be effective for the period beginni:lg on the Enrollment Date and
ending on the last day of the Plan Year within which such participation begins.
(b) An Eligible Emplo)'ee who doe, not file on Enrollment Form with
the Plan Administratvr in a timely fashion upon rust being eligible for the Benefit Plan
descnbed in Section 4.1(a) of the Plan may become a Parlicipant in the future in
accordance with the provisions of Sections 5.2 and 5.4.
5.2 ~n EiUonment Period. Each Participant may (and ar. Eliglole Emp!oyee
who is not a Participant may, in order to become a Participant) complete, sign and file a
new Enronmen~ Farm with the Plan Administrator during the Open Enroilment Period.
The elections made by the Participant during an Open Enrollment Period shall be
effective, subje.ct 10 Sectfon 5A, for the next Plan Ye.ar .
. 53 Failure to EJeet. A Pafticipolnl faili.'"1g: to rrmJ .... e a timely and proper electior.
in accordance with Seclio!1S 5.1(<1) or 5.2 sllillJ be deemed to have elecied 10 receive his
("Ir her full compensation in cash.
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(a) Elections made or deemed to be made under the Plan for a given
Plan Year shall be irrevocable during such Plan Year unle~s the Participant h;::5 a change
in family status. A Participant may re\'oke a benefit election for the bakmce of a Plan
Year and file a new elec:ion onl), if both the revocalion and the new election are on
aC('.Qunt of a!'\d consistent wtth a change in family status. For purposes of this
Section 5A, a change in faml1)' status include:s marriage, divorce, death of:a spouse or
dependent, birth or ao')ption of a cbild , commencement or termination of emp'lo)'ment of
a spouse, change from full-time to part-time employment statu.s (or vlce .... ersa) by <I
Participant Of spouse, tht.:: return from an unpaid leave of absence by 8 Participant or
spou~ 1he taking of unpaid ]e~.ve of absence by a Participant's spouse l a significant
change in health coverage attnbutabJe to a spouse's employment. a signifir..ant increase in
tbe Participant'S portion of the prem:urn cost under a health plan when the Participant
may elect simflar coverage under anothe-: health plan, a significant curtailment or
cessation of coverage under a health plan when the Participant may eJect similar
ooV"eiage under another healtll plan, and such other events as the Plan Administrator
dctcP.1lines will qualify as a change in fClmlly sTatus under regulations and nliings of the
Internal Revenue Service. Any new election under this Section 5.4 stari be made by
filing a new Enrollment Form within .. reasonable period of time C1fter the change In
family status and shrlll bt! effec .... i"e .cJt such time 25 the: Pbn AdlllinISi.!.<ltor 5h<lj] prescribe,
bL1t not earlier than the first pcl)! peric'<l beginning after the En;Dlhnent Form is
completed i1nd returned to Ihe Plan Administr.llor.
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(b) A P<lrticipant may. during the Open Enrollment Period, .evoke or
change his or her election or deemed election dfecti'!e as of the beginning of the next
Plan Year in accordance with Section 5.2.
5.5 Forfeiture of Unu50ed Benefits. Any "J.mO\lnt of the £mploye~ Contribution
here\lndcr whkh is not applied to provide a Participant the bendils elected (or deemed
elected) hereunder on or before the end of the third month after the close of the Plan
Year will be retained by the City and such unused benefits will be forfeited by the
Participant.
AR'nCLE Vl
~NTRlBUTlONS
6.1 Employee Contng)JJion. For each Plan Year, 1he amount of each
Participanfs Emp10yee Contribution shalf be equal to tile cost of the Bene!!t Plans
seJected by such Participant. Such Participant shall enter into a salary reduction
agreement authorizing the reduction of such Participant's compensation, on a pro rata
basis per pay period, by an amount t:qual to his or h~r Employee Contribution.
6.2 Allocation of Conmburions. As of ee.ch date an amount equal to the
Participant's Ernployee Contribution is withheld from the Participant's compensation
pursuant to Section 6.1, such amoum shaU be credited to prm"ide benefib under the
appiOpria!e Benefit Plans consislent with the P<1TticipJl1t's election under the Pl~~ ..
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ARTlCLE VII
ADMINISTRATION OF PLAN
1.1 Plan Adm!llistrator. 1t shall be '8 principal duty of the Plan AdministralOT
to 5ee that the Plan is cmried ou~ in ,accDrd"mce with i[$ terms, fnr the exciusive benefit
of pe'rsons entitled to p~Jrticipate in the PI'ln without discrimination among them. The
Plan Administrator will have full power to administer the Plan, subject to applkable
requirements oi law. For this purpose, the Plan Administrator~s powers will indudt'..,. but
will not be limited t01 the following:
(a) To make and enforce such rules 3;:Jd regulations. as it deems
necessary or proper for the effie-kIlt administrt=l.tion Df the Plan, including the
establishment of a c.!aim procedure;
(b) To interpret the Plan in its sale discretion, fLO; interpretation thereof
in good faith to be final and conclusive on the City. Employees, P.artjcipants and aD
persons claiming benefits under the Plan;
(c) To decide, in its sole. discretion..., aU questiOns concerning the Plan
alld the eligibility of any person to particip<Jte in the Plan;
(d) To appoint such agents, counsel, aCcOimtant.;, consultants and other
persuns as may be requ!red to 8ssist in <;dministering th:: Plan; and
(e) To allocate and delegate its rcspon~rni:lties under the Pbn and to
designate OIher persons 10 e.arry out <Jny of its responsibilities under the PI<Jn, <J.ny such
aiJooHion, delegation or designstion to be by written in!itrumC~1 <J.nJ in accord.ance with
IIpplicabte requirements. of I~jw.
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7.2 EX<1mination of Re(ords.. The Plan Administrator sh"ll make available to
eacb Participant such of the records under the Plan as pertairl s~cific.ally to that
Partidpant, fm eJl:amlnation at reas~n.:Jble times during normal bu.si:1e5S hours.
7.3 Indemnification of Plan Adm.i_D.i.~.tratoI. The City agrees to indemnify and
defend to the fuliest extent permitted by !alA' any Employee, inciuding any former
Employee, to whom it has delegated OT allocated re.$ponslbilities with respect to the
administration of the Plan, against an liabilities, damages~ cosis and expenses, including
attorneys' fees and amounts paid in settlement of any c1aims approved by the City,
OCC"sioned by any aci or omis..o;;ion to act in connection with the Plan, if ~uch act OT
omission does not involve bad faith, gross negligence, or Wlllful misconduct
ARTICLE VlII
AIl claims fOT benefits provided under a Benefit Plan shan be determined
under the benefit ciairns procedures contained in sucb Benefit Plan.
ARTICLE IX
AMENDMENT OR TERMiNATION OF PLAN
9.l Amendment or Termination of PI8JJ-Although the City h<:ls established the
Plan with the intentioll of maintaining il: for an indefinite period of time, the City
reserves the right nt any time, .and from time to time,
(a) to mOdify or amend in whole or in part <In,' or all of the provisions
of the Pbr\ or
.1) -
(b) 10 discontin~e or lerminiite tne Plan at any time. Any such
discontinuance or termination shall t-.e effective as of such dale as the City sh.lIl
determine.
9.2 Authority of Plan Administrator. The Plan Adminlslrator shalt ha .... e
authoritj to modify or amend the Plan as may be necessary to
(a) implement any additional Benefit Plans as may be designated under
Section 4.1(c); or
(b) enable the Plan to meet any rcgLlirements for qualification under
section 125 of the Code or other applicable law.
ARTICLE X
~SCELlANEOUS PROVISIONS
10.1 Exclusive Benefit The Plan shall be est3h1ished and maintained for the
exclusive benefit of Eligible Employees, their spouses, and dependents.
10.2 Infqonation To Be Furnished. Pankipants shaD provide the City and the
Plan Administrator with such !l1formation nnd evidence, and shaTI sign such documents,
as may reasonably be iequf:Sted from time to time for the purpose nf adminis.tration of
the Plan.
10.3 LimitatiQJL.9f RighIS. The. establionment of the PLow or any ame.ndment
thereof, the creation of <lny fund or ac,,"ount, or ,hc pD)'mcllt of any benef:ts shall not be
construed as giving to any Participdnt or other person 2, ~egal or equitable right again~t
Ihc City o. the PI<ln Admini.strator ex.:t:pl .<!~ provided [n rhe Pl:ln. Under no
circumst<.lm;..:s sh<J1I the terms of cmpio)'menl of any PilrlicipMI be mm.lified or in lilly
13
,~
:.......---. '--~--:-
W'~y affected by the provisiDns of the Plan. The main!en<1nc:~ of the Pian shall not
constitute 8 contract of .employment and participation in the Pbn wil! no~ give allY
Panicipant a risht to be retained in the: emplo) of the CIty. E.ach Employee's rights with
respect to continuing employment with the City are established by the Merit System
Rules and Regulations.
lOA Benefits Solely From General Assets. Except as otherwise required by
applicable law, 1he benefits provided hereund~r wl1l be paid solely from the general
as.<>e.:ts of the City. Nothing htrein will be construed to require the City or the Pl<:!!l
Administrator to maln~ain any fund or segregate any amo: .. J[]t for the benefit of any
Participant, and no Participant or other person shall have an)' ciaim against, right 10, or
security or other interest in, any fund, account or asset of the City from which any
payment under 1he Plan may be made" except as an l . .m!'.et"ured general creditor of the
City.
10.5 Nonassignability of ~ights. Neither the City nOT the Plan Administrator
shall recognize any transfer, mortgage, pledge, hypothecation, order or assignment by any
Participant or lx:neficiary of an or any part of 1';::S or her interest under the Plan. Any
attempt by a Participant or beneficiary to assign, alienate, sell, t::ansfer, pledge or
encumber his or he. benefits shall be void .. A Participant's or bene.ficiary's interests shan
nol be subject in any manner [0 transfer by operation of lDw, and shall be exempt from
the claims of creditors or other dalmants (including but nol limited to debts 1 contracts,
liabililLes~ or torte;) from all orders, decrees, levees, gilfili:,hments, ar.d/or executiDns and
other legal or equiti:lble process or rr(xt:edmg~ .1g.1inst .s.uch Pi:.Irticipant or bl.,"ndici'lry to
the full extent which JT'l<.ly be pcrmilied by r:lw.
14
\
10.6 Gend~1-<1nd Numh§.I. Words usc:J in the I1las.ct:!ine, feminine or neuter
genders shall each be deemed to refer to the other, \ ... ·h~ne\'e[ the conte)'.!:; are required;
and words used in the si:1g111ar or pluml shall e.ach be deemed la refer to the. Qcher
whenever th~ contexts are required.
10.7 Titles. Titles are for convenience ollly and are not deemed to be a pall of
me Plan.
lV.8 Governing Law. The prov[.c,ions of the Plm'i shan be construed,
administered and enforced according to applkabTe federal law and the laws of the State
of California.
10.9 SeverabJli!y. If any provisiDn of the Plan is held by a court of competent
jurisdiction to be invalid or unenforceable, 1he remaining provisions shall continue 10 be
f.illy effective.
IN VlIT!'I.TF..ss \\-'HEREOF, 1he City adopts the amended and Tt:stated Pian to be
effective as of January 1~ 1993.
CITY OF PALO ALTO
By: __________________ .
ATTEST:
City Oerk
15
RBSOLtrrION NO.
RESOLUTION OF THE COUNCIl. OF THE CITY OF PALO ALTO
ADOPTING AMENDMENTS TO THE CITY OF PALO
ALTO DEPENDENT CARE ASSISTANCE PLAN
'.-'.
WHEREAS, the City of Palo ~to (the ·City") maintains the
City of Palo Alto DE:peru.!e[J.t care Assistance Plan (the 'Plan-) j
which is intended to qualify as a dependent care aasistance program
under section 129 of the Internal RevenuS! Code of 1986, ae amended
(the ·Code'); and
WHEREAS, the City Council wishes to adopt certain technical
amendments to the Plan, as hereinafter set foeth, in conformance
with amendments to the Code and regulations prrnrrulgated pursuant
thereto, effective January 1, 1993; and
WBBRBAS~ the City is per.mitted to amend the Plan pursuant
to Section a~l of the Plan.
NOW, THEREFORE, the Council of the City of ~alo Alto does
RBSOLVB as follows:
SRCTloti 1. The council hereby amends the Plan by approving
that certain document entitled ·City of Palo Alto Flexible Benefits
Plao--Amended and Restated Effective January 1. 1993,' a copy of
which is attached hereto and incorporated herein by reference.
SECTION ~ The Council finds that tbis is not a project
under the California Environmental Quality Act.
IIr.'I<ODUCED AND PASSED:
AYES:
NOES:
ABSENT,
ABSTENTIONS:
ATTEST: APPROVED:
City Cl.erk Mayor
APPROVED AS TO FORM:
City Manager
Senior Asst. City Attorney
Director of Fina..;:-c=-e,,--------
Director of Human Resources
I
~'?1i.1Q
-~I"""""'rlol I'Y)I
CITy OF PALo ALTO
DEPENDENT CARE ASsISTANCE PL<\N
Amen<f"..d and Restated
Effective January 1, 1993
ARTICLE I
ARTICLE Ii
2.1
2.2
2.3
2.4
25
2.6
2.7
2.8
2.9
2.10
2.11
2.12
2.13
2.14
2.15
2.16
2.17
2.18
2.19
ARTICLE III
3.1
3.2
3.3
3.4
3.5
ARTICLE IV
4.1
4.2
ARTICLE V
5 I
CITY OF PALO ALTO
DEPENDENT CARE ASSISTANCE PL-\N
Amended and Reslated Effecti .... e JanuClry 1, 1993
T ABl.E OF CONTENTS
INTRODUCTION
DEFINITIONS . . • . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . .. 1
City ............................................. 1
City Counc" •..•.........•......................... 1
Cooe ........................................... 1
Dependent •..•...........................•........ 1
Dependent Care Assistance Account ... ___ .. ~ .. __ ..... ~ .. 2
Dependent Care Expenses ... _ . + _ •••• _ • • • • • • • • • • • • • • •• 2
Dependent Care Servke Provider ..... + ••• + •• _ • • • • • • • • •• 2
Effective Date ............. _ .................... _ . .. 2
Eligible Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3
Employee......................................... 3
Employee Contribution _ .......... _ ....... _ ......... " 3
Enrollment Form .. _ .......... _ ............... _ . . . .. 3
Flex Pla.o ......................................... 3
Highly Compen'''' cd Employee . . . . . . . . . . . . . . . . . . . . . . . .. 3
Non-Highly Compensated Employee ..................... 3
Participant .....•.........••...•.....••....•....•.• 3
Plan ............. _ ............................... 3
Plan Ad ministrator ........................ _ . . . . . . . .. 4
Plan Year ............................... , . . . . . . . .. 4
ELIGIBILITY AND PARTJCIPAflON .................. 4
Commencement of Participation ~""""""""""'" 4
Te,rminatiofl of Participation ........................... 4
Reinstatement of Fonner Participant. . . . . . . . . . . . . . . . . . . .. 4
Reinstatement of Suspended Participant .................. 5
Discrimination Limitatioru; . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ELECTION TO RECEIVE DEPENDENT CARE
ASSISTANCE ..................................... .
Eie{:tion ProcedLire ...... .
Reimbu.rsement Limilntinns ........................... .
DEPENDENT CARE ASSISTANCE ACCOUNTS ...
7
7
7
5.2
5.3
5.4
ARTICLE VI
6.1
6.2
6.3
ARTICLE VII
ARTICLE VIII
8.1
82
8.3
ARTICLE IX
9.1
9.2
ARTICLE X
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
1O.1l
Cred iting of Accounts ......................... ,...... 8
Debiting of Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 8
Forfeiture of Accounts ............................... 8
REIMBURSEMENT OF DEPENDENT CARE EXPENSES .. 9
Qaims (or Reimbunemefit .................... . ..... .
ReimblJrsement of Expenses ......................... .
Repon 10 Participants On or Berore January 31 of Ea~h
Year ........................................... .
9
JO
10
TERMINATION OF PARTICIPATION... . . . . . ... . .. . .. 11
ADMINISTRATION OF PLAN •. . . . . . . . . . . . . . . . . . . . . . 11
Plan Administrator ................................. 11
Examination of Record... ..•.......•.................. 12
Indemnificatioll of Pl<J.n Administrator . . . . . . . . . . . . . . . . . .. 12
AMENDMENT OR TERMINATION OF PLAN .......... 13
Anlendment of P~an ................................ 13
Termination of Plan ......... , .... ,................. 13
MISCELlANEOUS PROVISIONS .. _ ........... , . . . . .. 13
Exc~usive Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 13
Information To Be Furnished ......................... 13
Limit.tion of Rights ....•..•.......................• 13
Benefits Solely From General Assets ... . . . . . . . . • . . . . . . . • 14
Nonassignabl1ity of Rights ..•....................•.... 14
No Guarantee of Tax Consequences ..................•. i5
lndemrdfication of City by Participa!lts ................. '. 15
Gender and Nt;mber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 16
Tilles ........................................... 16
Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 16
Severobl1ity . . . . . . . . . . . . . . . . . • . . . . . . . . . . . . • . . . . . . . . 16
ii
-,
:, ~4J._:
., <c->.
"~ C""" : .. ~"; ., . . . ~'.;t~~.,. -
CITY OF PALO ALTO
DEPENDENT CARE ASSISTANCE PLAN
Amended and Restated
Effective January 1, ]993
ARTICLE [
INTRODUCTION
. ~ ::; .
The City of Palo Alto Dependent Care Assistance Plan, amended and restated
effective January 1, 1993 (the "Plan"), is mtlinlained by the City of Palo Aho. The Plan is
intended to qualify as a dependent care assistance program pUfs~ar:~ to Section 129 of
the Code and is to be interpreted in 3 manner consis!ent with ;he requirements of
Section 129 of the Code. The purpose of the Plan is to ena~le Participants [0 elect to
receive reimbursemenu. of their dependent care expenses that are ex.cludable frOI!! the
Particip::m(s gross income pursuant to SectlOil 129 of the Code.
ARTICLE 11
DEF1NITIONS
2.1 "91:/ means the City of Palo Alto.
2.2 "Cjtv Council" means the governing le£islfl!.lve bod} of the: City, as
constituted from time to time.
2.3 "~" means the Internllf Revenue Code of 1986, anJ the regulations and
rur~ngs. is.::.ued pL~rs.uant thereto, all as in effect and amended (rom time to time.
2.4 "Dependent" means any per:'.on wi,Q is (0) a J"cpcl1uent las defined ill
Section 152 of the Code) of Ihe P.lrl:-.:ip;inl \.\'ho j:-. tinder l11c agL': of 13 ,Ina with f'::;Pl:ct
to whom the ParHcipanl is entitled to an exemption pursuant to Se..::tion 151(c) of tIle
Code, or (b) a dependent (as defined in Section 152 of the Code') or spouse of the
Participant who is physically or mentally incapable of caring far hilnse!f or herself.
2.5 "Pepend~nt Care Assistance Account" means the account describe.d jn
} .. rticie V hereof.
2.6 "Dependent Caie Exnenses" means expenses incurred by a ParticipaDl
which (a) are incurred for the alre of 8 Dependent of the Particip.ant or for related
household ~LvjCe:S, (b) are paid Of payable w a Dependent Care Service Provider an~
(c) are incurred to enable the Participant to be gainfuUy employed for any period for
which there are one Of more Dependents with respect to t.he Participant. Dependent
Care. Expenses shall :tot include expenses incurred for ~ervlces outside the Participant's
household for the care: of a Dependent unless such Dependent ~ descnbed in
Section 2.2(a) of the Plan or regularly spends 3t least eight (8) hOUTS each day in the
Participant', household.
2.7 "Dependent Care Service Provider" mean:; a per;).on who provides care or
ot.ier seMces desc.flbed in Section 2.4(a) of 'the Plan, but ~han not include (a) a
Dependent Care Center (as defined in Se~tion 21(hX2)(D) of the Code), unless all
applicable :;tate and localla\VS are ~atisfied, or (b) a spouse or ch~d under the age of 19
of the Employee or a dependent with respect to ·.-:hom the Employee or the Employte'!i
.... pouse is ent'tkd to an exemption under Section 15](<:.-) of tile Cod!~.
2.8 "Effectrve Date" of the <Jmended and resi<l!ed Plan meClns lDn'Uary 1, ]9')3.
2
2,9 "Eligible E~~" meClm; each Empioyee who is eligible 10 participate [n
any Benefit Plan mainmir:ted by the City and whose participation is pro\-'lded for in an
applicabJe Memorandllm of Understanding or Compensation Plan,
2,10 "EmpJO"tee" means a person who re.::eives remuneration for rendering
.services to the City, any portion of whose income. is subject to Wilhholdinc of income t_ax
and/or employrnenl tax b}' the Cit)', as well as <:ny other'person qualifying-as a common
law empJ.Q'.yee of the City.
2.11 ''Employe_-;~.gn.!Dbction'' meam the contnbuticn tll the Plan by 2:
Psrticipant pursuant 10 Section 6,1 of the Fkx Plan.
2.12 ''Enrollment F~nn" means the form which 'an Employee -shalJ complete in
order to select oprionsl benefits and authorize EmpJoyee Contnbutions under the F1ex
Plan.
2,]3 "E1§:x Plan" means the City Gf Palo Alto Flexfble Benefits PlCln, as amended
from r.me to time.
2.14 "Higl'Jy Compensated Employee" means an Employee described in
Section 414(q) of tI,e Code.
2.15 "Non-Hi.,hi", Compens2ted EmpTDyee." rneam an Employee W;1O ic; not a
Highly Compensated Employee.
2..16 "Participant" me-ans each EmpToyee who pJ.rticiPJtt':~ in the Plan in
acconIance ..... ith Article 111.
2.17 "Pl~D" means the City of Poll') Alto Dependent Ctlre A'oslslancc Plan, ClS set
forth herein logether with any Clod alj amendrr;erlt~.
J
':.
2.18 "P!<1n Admjni~lrator~ means the committee or individulIl appOiJl!ed hy Ihe
City from time to time to administer the Plan,
2.19 "Plan Yea[~ means a 12-tTtolltn period commencing Oll Janual)' 1 and
ending with the last pay period of th< calendar year.
ARTICLE III
ELIGlBILnl' AND P~LCIPATION
3.1 Commencernerll of Participation. Each EliglbJe Employee wilo elects to
participate in the Plan pursuant to Section 4.2 of the Flex Plan shall commence
participation in the Pian in accordance with Section 3.t of the Hex PICIn.
3.2 Termination of PaniciR9.tion. A Participant wl1t cease to be a Participant
as of the earliest of (a) the date on which the Plan terminates, (b) the date on which the
Participant cea~ to be an Eligible Employee and has. SO credited to his or her account
UDder L\e Plan. or (c) the date on which the Participant's elec.lton to participate in the
Plan expires or terminates in accordance with Articles rrr and V of the Flex Plan.
However, rej~bursemellt.s of Dependent Care Expenses shall continue to be made in
accordance with Article VIl.
33 Reinstatement of Former Parti~_i.J;mn!.
(a) A former Pmtidpant, who elects 10 participate 111 the PI,m pursuant
to Section 4.2 or the Flex Plan,
(1) whD once ag:l:n become:;; an Eiiglble Employee m8Y enroll in
the PI,m in aecordall<:e with Article V nf the Flex Plan, or
4
(2) who at alllimc::s relTIaim. ~n Eligible Employee may t:nroll ir.
(he Plan in accordance with SeClions 5.2 and 504 of the Fkx Plan.
(b) Notwithst,mding the foregoing, a Par'.icipant who termiI1ates
participation in the Plan due to his or her termination of employment during a Plan Year
may not re-.enroll in the Plan during thaI same Ptall Yeaf.
3.4 Reinstatement of S!J.~nded Par~.
(a) A suspended Participant who once again become.s an Eliglbl:::
Employee after an unpaid leave of absence of 30 dElYs or less shan re$ume participation
upon fe-tum to work, provided s'Uch return is withi11 the same Plan Ye-ar. The
withholding for such a Participant shan be the same amount atler the Participant resumes
participation as it was prior to the unpaid Jeave of absence, with no adjU5tr~~n: for the
time during the unpaid leave of ab~nce when no '\l.,rithholding occurred. Every other
Participant who is on an unpaid le<lye of ahsence resumes participation as soon as
administratively feasible after completing. signing and filing an Enrollment Form 'olo1th the
Plan Administratoc, and such Enrollment Form shall be effective, suhjeci to Section 5.4
of the F1ell: Plan) for Ihe period beginning aD the dale de:eflIlined by the Plan
Administrator and ending on the last day of ihe Plan Yeo:r during which such fOim was
filed.
(b) IT a s'Uspellded Participant resumes p<lrticipation after an urlp<lid
leave of absence in the same PlaI1 Year as the unp<lid leave of absence began, the
benefits elected for tbe re-mainder (}f the such Pl<Jn Ye<.;r shall be idC::I11it.:al tD thme
hencfits, if any elected"H the beginrn'ng of SUC11 PI,ln Yellr, except a~ o!hep".ri~e pcrmiit[~d
in S{;;cliC'1n 5.4 of (he FJ~x Plan.
~"lllII.r"
irK~1u.I~'l 5
,-,,---~-------.
3.5 D.,iscrimination Limitations.
(::I) The contrml.Jtions or benefits provided l.Jllder the Plan shall not
discriminate in favor of Highly Ccmpensaled Empioyees or their dependents (as dtfined
in Section 152 of thl!: Code). The Pian shall benefit EmpToyees who qUG:iify und!!r a
c!assification which is not discriminatory in favor of Highly Compensated Employees or
their dependl!nfs. The PLan shan be considered nondi.u:riminatory if Ihe average benefits
provided to Non-Highly Compensated Emp!oyees under the Plan is at least fifty-five
(55%) of the average benefits provided to Highly Compens':Hed Employees under the
Plan. Solely for p~rposes of this Section 3.5, Leasr"d Employees (within the meaning of
Section 414(n)(2) of Ihe Code) ,han be wnsidercd Employees.
(b) If the Plan Administrator determines , before or during any Plan
Year, that the Plan may fail to satisf')' for such PIM Year any of the nondiscrimination
requirements set forth in Paragraph (a) above, the Plan Administrator may modify the
election of L'lose Participantc; who are Highly Compensated Employees. In the event that
the elections of those Participants who are Highly Corr.pensated Employees, are
mndifieG , ~ucb elections shan be modified for any such affened Participant by reducing
the EmpJoyee Contnbuticn of such affected Participant in !he proportion that stich
affected Partkipant"s compensation bears to the compensation of all su.:h affected
Participants during the Plan Year until the Plan is in C'ompJi.ance with the applicable
nondiscrimmation requirement. Far purposes of this Section 3.5(b), cUl11pemation shall
mean wages within the meaning of &ction 3401(a) of the Code (i.e., W'lgt'.5 for purposes
of ir!Come tax withholding), al [he effec[ivt.': d:.He or the modificalic,ln el~cliom.
ARTICLE IV
ELECTION TO RECEtV_i;_RJ;'Pr,:i'/DENT CARE ASSISTANCE
4.1 E~on ProceduJi::. A Panicipan'. may elect to particip<Jte in th~ P].nr. by
filing an Enronment Form in accordi:lIice 'With the procedures eWlblished under the Flex
Plan.
4.2 Reimbursement Limitations. The maximum Employee Contrib~lion which
the Participant may allocate to the Plan for any Plan Year and which Ihe Participant may
in tum receive unde.r the Plan in the form of dependent care assist.ance shall bo: the
lowest am.Qunt of fhe foH()\\'ing: (a) $5,000, or $2,500 if a separate tax return i~ filed by a
married Participant, (b) the Panicipani's earned income (as defined in Section 32(c){2)
of the Code) for the caJendar year (not including any amounts excluded from a
Participan!~s gross income in the fl'lrm of dependent care as~istance), or {c) the actual or
deemed earned income of the Participant's spouse for the calendar year. In the case of a
spouse who is a fun-time student for at least five (5) months of the Plan Year at an
eduCBtional institution or is physicany or meiltany incapahTe of caring for himself or
:herself, such spouse shall be deemed for eacn month dOJring which fuch spouse is a
student or is incapable of caring for himself or herself, to ha .... e earned iOCDme of not les.s
than $200 per month if the Participant ha5 one Dependent .and $400 per month jf the
Participant has two or more Dependents.
7
, I :
ARTICLE V
DEPENDENT CARE ASSISTANCE ACCOUNTS
5.1 Establishment of Accounts.. The City will estabrish a Dependent Care
Assiswnce Accmmt for each Pliln Year with respect to each Participant who has elected
to receive reimbursement of Dependent Care E'qJcn . ..es for the Plan Year,
5.2 Crediting of Accounts. As of enth date compensation k regularly paid 10
the PartJcipant in a Pian Year, each Participant's Dependent Care Assistance Account
shall be credited with an amount equal to the Employee Contribution which the
Participant ha. ... elected to be witbheld from hi]' or her compensatJOil and allocated to the
Plan on the Parilcipanfs Enro!lment Form.
5.3 Debiting of Accounts. A Participant's Dependent Care .~~fstance AC..cOlll1t
for each Plan Year shaD be debited from time to time iri the amount of any
reimbursern ent made pursuant to Ankle VI ta ur for the bene fit of the Participant for
Dependent Cere Expenses incurred during such Plan YeaI:'.
5.4 Forfeiture of Accou~. Tl1e amount credited to a Participant's Dependl;,mt
Care Assistance Account for any Plan Year shall be used only to reimburse the
Participant for Dependent Care Expenses which are incurred during such Plan Year, and
only if the P-articipant applies for reimb'Ursement on or before the end of the third month
folJowLng the close of the Plan Ye~r. For purposes. of this rule. Dependent Care
Expenses shall be deemed to have been incurred at the time the services which
generated tbe Dtpendent Care ExpenSt:s were provided. Any bal.}ncc remaining: in the
Participant's Dependent Care Assi:<;taJict Ac<.:ount for ,} Pian Year afler all
rcimhursemenlS hCIcundu shall not h;,: cmri~u OV(.!f W f(.!imbur:-;c the Partic.:ipHnt for
-.J
, .. " .
.,,"
'::': ,_. .~,-.;,
--,-~c>'-'P,'-~~~,\:f:i~''<~·<::·~~'::::-·:~,~··
'--'--""-"~-" c"""~
Dependent Care Expense'S incurred Juring a subset].tlt"nt P.[:Jn Ye<Jr, and shn!1 not be
available to the Panicip<lol in ~ny other form or mann~r, but sh.<ln rem'lin the prop('!rty
of the City, and the Panicip~lnt shall forfeit a~1 rights with respect to such balance.
tJHICLE VI
REIMBURSEMENT OF DEPENDENT CARE EXPEN~ES
6.I Ciaims forR~imbursement. A Particip.Jrit who i,1as elected to receive
reimburs::ment of Dependent Care Expenses for a Plzn Yem m<:l)' apply for
reimbursement of Dependent Care ExperL~s incurred by the Participant during the Plan
Year by submitting a claim in writing to the Plan Administrator or other company as may
be designated by the Plan Administrator, in such form as the ?lan Administrator may
prescnbe, setting forth:
(a) The amount, date~ and nature of the c=xpen..~ with respect to which
a ri:imbllrsement :is requested;
(b) Ine name of the person: organization or entity to wJ1Jdl the expense
was or :is to be paid;
(c) The name of the person for whom the expense was incurred, such
person's dak of bi11h, and the Ieiatiollship of such person to the Participant; and
Cd) Th-<lt the expense has not been reimhursed and is nat reimbursable
from any ether SOUTce.
Such applicalian sh.'lll be m;compror:}ed by bilb, i.'1voices, n:ceiptl O[ ulher slatement-;
showing ih1H Dependent Cue Expense.'; h"-l'Vt heen incurrt:d <lIJa the ;lmnUnlS of such
''"''" .. '
~ ......... .
expenses, together with nny additional documentation which !he Pl;m Administrator may
fl!quest
6.2 Relmbursement of Expenses. The City shall reimburse the rdfti~ipant
from the Parficipant's Dependent Care Assistance Account for Dependent Care
E.~nses incurred during the Plan Year for which the Participant submits documenwtion
in accmdance with Section 6.1. The maximum reimbursement of Dependent Care
F.xpen..~ incurred during a Plan Year ",hich a Participant may obtain \lnder the Plan at
any time shall be the balance.: of the Participanfs Dependent ('-are Asslstance Account at
the time of the request for reimbur:remen!. 1be amount of any Dependent Care
Expenses not reimbursed as .a result of the preceding sentence shall be carried over and
reimburs-e.d only if and when the balance in such Account a t or before the end of the
Plan Year ir. which such expenses are inwrred permits such reimbursement. The Plan
Administrat:Jr may, from time to time, estabJish rules and procedures concerning
reimbursements which shaD be applied to Participants in a nondiscriminatory manner.
6.3 Report 10 Par::icip:ants On or Before January 3l of Each Year. On or
before Jar.uary 31 of each year, the Plan AdministJatDr ShEd! furnbh on the Form W·2 of
each Participam who has received dependent CCire assistance during the prior calel1dar
year, or in slJch other form as the Internal Re".renue Servke shall prescnbe, the amount
of such ~sistance incurred during such year wilh respect to the Participanl
]()
., .. :
o
ARTJCLE VJJ
TERMINATION OF PARTICIPATION
In the event that a Participant ceases p,u-ticipa!ion in the Plan ln accorG<Jnce with
Section 3.2 of the Plan, no further Employee Contributions shall be allocated to such
Pa~tkjpant's Dependent Care Assistance AccounL The former P,micipant {or his or ber
estate) shaD be entitled to reimbursement for Dependent Care Expenses incurreo within
the same Plan Year in which participation in the Plan i<; terminated provided that the
former Partidpant (or his or her estate) applies for such reimbilrscment in accordance
with Article Vl. No such reimbursement shaH exceed ~he remaining balance, if any, in
the former Participant's D~pendent Care Assistance Account for the Plan Year in which
the expenst.s we re inculTed.
ARTICLEVlll
AI?MJNIST~T!ON OF PLAN
8.1 Plan Administrator. It shall be a principal duty of the Pl<m Administrator
to see that the Plan is carried out. in accoraancP:", witb it., terms, for the exc]usive ber:efit
of persons entitled to participate in the Plan without discrtmination among them. The
Pian Administrator will have full power to administer the Plan, subject to applicable
requirements of law. For this purpose, the Plan Adminislf<:ltor's powers. will indudc:, bUi
will not be limited to, the fol!owing:
(a) To make (lnd enforce such rules .~nd regl.OJ<.:tions a~ it deem~
n~ces:<;ary or proper for the efficient admini.'ilrilliDfl of the PJ;ln, im;ILldirtg the
II
, :.
establishment of <:Iny claims procedures thm m<ly be required by applicable pro\lisions of
law;
(b) To in!erpret the Plan, ils interpretation thereof in good faith to be
final and conclusive on the City, Employees, Partidpants and all persons claiming
benefits under the Plan;
(c) To decide, in its sole diS(rctiorl, all questions con.-:erning the Plan
and the eligibility of any person to participate in the Plan;
Cd) To appoint such agents, <:oumel, accountants, cons.ultants J:ld other
persoll! as may be required to assist in ~drninistering the Plan; and
(e) To allocate and delega!e its resp<msibllities under the Plan and to
designate other persons to carry out any of its rcsp0l'iSlbiJities under the Plan, any such
aDocation, delegation Dr desigmHion to be by written mstrument and in accordance with
applicable requirements of law.
8.2 Examin_ation of Records. The Plan Adrnin1strator shan make a\'al1abJe to
each Participant such of the records under the Plan as penain specifically to that
Participant, for examination at reasonable times during normal business hour~.
8.3 Indemnification of Plan Aclmini~trator. The City agrees to inde-.mnify and
defend to the fullest extent permitted by la" ... allY Employee, including any fanner
Employ::e, to wham it has delegated or a!)(x:ated respomibilities with respect to the
administnl!ion of the Plan, against <III tiabilities, damages, costs nnd expenses, includir,g
aHorneys~ fees and amounts paid in settlement of any claim:-; ~ppro .. 'et.l by the City,
occasioned by .. ny ",cl or omission to act in conne(..tioll wiLh the-Plan, j( such act er
omi:'isicm docs not involv{! b;lt.1 [;lill1, gro~~ negl!g~nce. or willrlll mi~OIH.luct.
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< -~ .' ",--.; '".
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ARTICLE IX
.... MENDMENT OR TERMINATION OF PLAt.'
9.1 Amendment of Plan. The City rescI'\'CS ttle right at any time Dr times to
amend the provisions of the Plan to any f'.xtent and in any manner that it may deem
advisable, by a v.Tiuen instrum~nt signed by an officer of the City.
9.2 Termination of Plan. The City has establish(:d the Pian with a bona fide
intention ;and expectation that it will be continued indefinitely, but the City wiB have no
obligation whatsoever to maintain the Plan for allY gj...'en Jeng!h of time and ma.y
discontim~e or terminate the Plan on a prospecti,'e b'J~is lil nn)' time without liability, by a
written instrument signed by an officer of the City, Upon termination or discontir.uance
of the Plan, ali elections and Employee Contrihutions reh.:ting to the Plan 'ShaH terminate
and reimbursement shall be made only in accord£lnce with Article Vll.
ARTICLE X
MlSCELLANeQUS I'B-OYISIONS
10.1 Exclusive Benefit This Plan shaJ] be maintained fur the exciuslve benefit
of Eligible Employees, their spouses, and dependents.
10.2: Information T(,-~~.Fumished. Participants Shrin provid~ the City and the
Plan Administrator with such information and evidence, and ;shall sign such do::umen15,
ac;. may reascn.abiy be reguested from time to time for the PU[PO~'::"s of administration of
the Plan.
10.3 Ljmiw~j()n of Ril'IH!i. T.he: est;lhlishment elf the Pl;Jn or ,Hly ,1II1cndme;1t
thereof, the cH:::~lil)n of ;.ny fund or lH,:cDunt, or tlw pJ.ymcnl of '!fly b~ndiL'i. will not he
l'>H1lI.t!
~,.,..t..,..lIl.!l"l
'>... .. ---~-. IT
-.
construed as giving to any Participant or other person <l kg,l: or equitable rigll: a,gain.sl
the City or i.he Plan Administr.afor excep~ as provlded in the PI~n. Under ne-
circumstances shalJ the terms of emproyment o[ any Pmticip2nt be modlfied or in any
way affected by the provisions of the Plan. The maintenance of the Plan shall not
-constitute a contract of employment and participation in the Plan Wlll not give any
Participant a right to be refained jn the employ of the City. Each Employees's rights
with respect to continuing employment with the City C!re established by the Merit System
Rules and Regulations.
lOA Benefits Solely From Gener;c;!I Ass.e~. The benefits provided l1erelJJ1der will
be paid solely from the genera1 assets of Ihe City. The Dependent Care Assistance
Accounts established pursuant to Article V shall be for accounting purposes only and
nothing herein will be construed 10 require the City or the Plan Administrator to
maintain any funri or segr-ega~e any amount for the benefit of any Participant. and no
Participant or other person shan have any claim against. right 10, or security or other
interest jn, any fund., account or asset of the City from which any payment under the Plan
may be made) except as an unsecured general creditor of the City.
1Q.5 Nonassignabilitv of Rights. Neither tbe Cit), nor the Pl<..in Administrator
shall recognize any transfer. mortgage, pJedge~ hypothecation, OIc!·er or assignment by any
Participant or beneficiary of an or any part of his or her interest under the Plan. Any
attemyt by a ParticipanT or benefici<Jry to assign, aheiwte, sell, transfer, pledge or
encumber his or her benefits f;h:.oIfI be void. A Puliici[l<J:nt's or bc:neficiary's jnttre~t~ shall
not be ~llhject in any mClnJlcr to t.r<.!r:.Sft:f by operation nf [,1\\.', llnd 51l;!!J he eXt:mp! from
14
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·:.",-f~ ~:;
)~::::.t-, . ..;..~.;;.... _ . .,;;~.'; ... ' ~.:;c '.
liabi1i:ies, or lor:s) rrom all orders, dcch.:es, lel,lee.~, garnishments, and/or execu!iom nnd
other Jegal or equitable proces.5 (IT prDl;e~dings agaii1~t such Participant or beqefici;Jt)' to
the full extent which may be permined by law.
10.6 No Guarantee of Tax Consequenc-e.s. Nei!her the City nor the Plan
Admlnistrator makes any commitment or guarantee that any am01Jnl.<; paid to or for the
ben~fl! of a Pa"icipant under the Plan wllJ be exclljdabf:::: [rom the Participant's gross
income for federal or state income tax purposes, or thai ClOy other federal or .s.late tax
treatment will apply 10 or be availabre to any P.urtic.ipant It shall be the obrigation of
each Partjclp~nt to detennine whether each payment tinder the Plan is excludable from
the Participant's gross income for federal and state income tax purposes, and to notify
t.lJ:e City if the Participant ha.s reason to believe that such payment is not so excludflble.
10.7 Indemnification of City by Particm~. If any Participant receives one or
more reimbursements under the Pltln Ihat are flot for Dependent Care Expenses or that
are includable in the Participanfs gross income for any reJwn, upon t:le request of the
City, !luth Participant shan indemnify and reimbl.lrs.e the City tor any liabl1tty it may incur
for failure to wilhhoid federal or state income tax or .s.ociai security tax from such
reimbursements. However) sllch indemnification and rcimbursem~nt shan not ex:ceed the
amount of additional federal and st.1te income tax t'n~l the Participant would 'have owed
if the reimbursements had been made to the Parti6pant as regular c.::Ish compensation,
pJ:;s tbe Participai1t's share of any SOCi8i security tax th .. t would have been paid on such
compensation, including .any in!ere~t and pen;lltie:; uttributable therell\ k~s .1:lY
~dditior.aj income Gnd s(-...::i:l1 :>ccur:!y tux actlla!iy paid by the PaJticip'.nt.
10>'"'7>.01
"""-""'~': 15
10.8 yel14.~r llnd Number. Word~ used in the: m:\.<;.C'uiine, femininl! OJ neuter
genders shatl each be deemed tn refer to the other, whenever the context~ ilre required;
and \\'ords used in the singutar or plural :;hall each be deemed to refer to the other
whene.ver the contexts are re~uired.
10.9 Titles. Titles are for convenience only and aie not deemed to be a part of
the Plan.
10.10 Governing La~. The provisions of the Plail shali be construed,
administered and erJorced according to applicable federal 1m',' <lnd the laws of the St.elte
of QI]ifomia.
10.11 Sevc(~bility. ]f any provision of the Plan h;. held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions shan continue to be
fully effective.
IN WITNESS WHEREOF, the City ndopts the amelided and restCl:ted Plan 10 be
effective as of January 1, 1993,
CITY OF PALO A1:ro
By: ____________________________ _
City Clerk
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