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HomeMy WebLinkAboutCC 21 DEFERED COMP 12-21-87 . CONSENT CALENDAR ~ ~:~, ~-~ ~qt?~ ~ '~' ~ NO. 21 :!' ":'~ '" "'! ] ~i! ;!ii~' ~.~..I....~.'}~ '12-21-87 . DATE Dec.bet 21, 1987 TO: FROM: SUBJECT: WILLIAM A. HUSTON, CITY MANAGER . -. NARY E. WYNN, CITY CLERK/DEFERRED COMPENSATION COI~I~ITTEE CHAIRPERSON GREAT I~[STERN BANK, A FEDERAL SAVINGS BANK, DEFERRED COMPENSATION PLAN AGREENENT RECOMNENDATION: Authorize the Mayor and City Clerk to execute the Great Western Bank Deferred Compen- sation Plan Agreement. BACKGROUNO: Since 1981, Home Savings of America.has been a depository for the City of Tustin funds for the Internal Revenue Code Section 457 Deferred Compensation Program. On October 13, 1987, we received a letter from Home Savings of America (copy attached) stating that they wil no longer act as a depository for the City's Deferred Compensa- tion funds after December 31, 1987. At present we have 12 participants in Home Savings of America. These participants desire to have another Savings institution as a depository for their funds. There have been meetings of the Deferred Compensation Committee and of the partici- pants and the consensus is that Great Western Savings Bank is desired a~ the depository for their funds. Great Western Savings Bank administers 250 plans throughout the State including Santa Ana, Costa Mesa and Newport Beach. At present they are paying 8.65% interest based on a five-year treasury note. Great Western will provide statements quarterly. A copy of their agreement is attached. The City also has the United States Conference of Mayors as a'deferred compensation plan which is administered by Public Employees Benefit Services Corporation (PEBSC0). At present the City has 99 participants in PEBSC0 and 12 in Home Savings. MARY E. WY~ ( (\ DEFERRED COMPENSATION COMMITTEE CHAIRPERSON _ attachment October 12, 1987 Ms. Mary Wynn Chairman - D/C Committee City of Tustin 300 Centennial Way Tustin, CA 92680 Dear Ms. Wynn: For several years, Home Savings of America has been a depository for funds for.your Internal Revenue Code Section 457 Deferred Compensation Program. This particular type of program was started with various Public agencies in the belief that .we would expand our deposit base at an affordable cost. After careful analysis, we have concluded that our continued depository relationship no longer meets our minimum effective cost standards. In order to afford you adequate notice, we wish to inform you that we will no longer act as a depository for your deferred compensation funds after December 31, 1987. Our relationship with your City and its personnel over the past years has been excellent. The cooperation we have received has been most appreciated. I hope your experience with Home Savings nas Seen the same. Home Savings of America will assist in every way possible in transferring your funds to a provider of your choice. Sincerely yours, ® Daniel T. Armstrong Senior Vice President DTA:imc Member: Federal Savings and Loan Insurance Corporation · Federal Home Loan Bank COMPENSATION PLAN AG9~ This Agreement is effective this December 1, 1987 by and between GREAT WESTERN BANK, a Federal Savings Bank, hereinafter referred to as GREAT ~, and the CITY OF TUSTIN, hereinafter referred to as WHEREAS, AGENCY, pur~3__~nt to and in compliance with Internal Revenue Code Section 457, has established a Deferred Compensation Plan, hereinafter referred to as PLAN; and WHEREAS, AGENCY desires to utilize GREAT WESTERN in the performance of certain services in connection with the administration of PLAN; WHEREAS, GREAT WESTERN desires to provide such services subject to the terms and conditions set forth herein; Now therefore, AGENCY and GREAT WESTERN agree as follows: 1. TERM: This Agreement shall remain in effect for a period of three (3) years from the effective date hereof. This Agreement shall be renewed for successive three-year terms if not cancelled by either party, by written notice to the other party. This ~t may also be terminated for "Cause" as that term is hereinafter defined. For purposes of this Agreement, the term "Cause" shall mean the failure of either party to perform any or all of its obligations as defined herein. The non-defaulting party shall give the defaulting party written notice which shall specify the particulars of the default. If such default is not cured within sixty (60) days from the end of the month in which notice of default is given, the non-defaulting party may terminate the Agreement effective thirty (30) days after the date on which written notice of termination is given to the defaulting party. 2. TERMINATION: Upon the effective date of termination of this Agreement, other than for Cause as defined above, the following shall occur: a. No new account will be est~_blished under this Agreement. b. If applicable, mutual fund shares shall be dishlrsed as mutually agreed in writing by AGENCY and GREAT WESTERN. c. If applicable, annuity products shall be disbursed according to the terms of the applicable annuity contract, as mutually agreed in writing by AGENCY and annuity provider. This section shall not serve to affect normal distributions to participants pursuant to PLAN. -1- 3. D~~: The minimum participant deferral per pay period shall be $10.00 (not less than $10). a. Cause appropriate deductions to be made fr~m such payroll (s) as may be applicable. b. Send by check or wire transfer the amount of the total deductions to : Great Western Bank Deferred Onmpensation Department P.O. Box 6350 Northridge, California 91328 or to such other facility or in such other manner as may be mntually agreed upon between GREAT WESTERN and AGENCY. ~ide, in such for~a as agreed upon by ~ENCY and GREAT WESTERN, a deferral listing with respect to participant sub-accounts to include not less than the following: 1. Name of Participant 2. Social Security number of participant 3. Amount to be credited to participant's sub-account(s). d. Establish a sub-account for each participant. Se Credit the amounts sent by AGENCY to the sub-account(s) of the various participants and to selected investment vehicles in accordance with the latest written instructions by Agency on file with GREAT WESTERN. fe FUnds invested in the option described herein as "GWSIA" will accrue interest as of the date of receipt by GREAT g® Place mutual fund orders, if applicable, within three (3) business days of the receipt of deferral listing and check, in accord_~_nce with the latest written instructions by Agency on file with GREAT WESTERN. 4. RECORD KEEPING AND REPORDS: GREAT WESTERN agrees to furnish AGENCY, no later than twenty (20) days following the end of each month and each quarter a report regardir~ the status of PLAN containing the following information: a. Each participant's name. b. Each participant's Social Security account number c. Each participant's sub-account ~. -2- d. Deposit credited to each sub-account during the period. e. Withdrawals from each sub-account during the period. f. Interest/Earnings credited to each sub-account during the period. g. If applicable, Mutual Fund Share activity in each sub-account, and the Net Asset Value as of the report h. Summary totals of the PLAN. GREAT WESTERN agrees to provide quarterly statements to participants in PLAN, no later than twenty (20) days following the end of each calendar quarter. Each statement shall identify the transactions which have cozurred in the participant's sub-account at the beginning and the end of the preceding quarter. GREAT WESTERN agrees to maintain the records necessary to produce the above mentioned reports, and agrees that all records shall be the property of AGENCY and that, in the event this Agreement is terminated for any reason, GREAT WESTERN will provide AGENCY a copy of such records, in hard copy or such other form as mutually agreed upon between GREAT WESTERN ar~ AGENCY, within ninety (90) days after the effective date of termination. AGENCY agrees that all related computer tapes, discs and programs shall remain the property of GREAT GREAT WESTERN agrees that all information 'supplied to and all work processed or completed by GREAT WESTERN shall be held to be confidential and will not be disclosed to anyone other than AGENCY except as required by law. 5. DISTRI~b'flONS: Upon receipt of authorized written instructions from AGENCY, GREAT WESTERN agrees to process the payment of benefits to participants and beneficiaries in accord_~nce with PLAN. Distributions shall be made once a month, on the seventh (7th) calendar day before the last day of the month. If that day is a Saturday, Sur~____a_y or Holiday, distributions shall be made on the next business day. Initial distribution requests received by GREAT WESTERN, at its headquarters in Northridge, on and after the sixteenth (16th) calendar day of a month will be processed the following month. If applicable, the distribution of funds resulting from the liquidation of mutual fund shares will be made on the next distribution date which falls at least five (5) business days after the receipt of such funds by GREAT WESTERN. The above notwithstanding, GREAT WESTERN will cooperate with AGENCY to not unreasonably delay distribution requests in conjunction with "emergency withdrawals", as defined in PLAN. GREAT WESTERN agrees to withhold appropriate Federal and State income taxes, according to instructions set forth on form W-4 completed by the participant, to remit such with-holdings to proper taxing authorities, and to issue net funds to participant (s) or beneficiary(s) in accordance with instructions on the Distribution Request Form. GREAT WESTERN agrees to perform required monthly, quarterly and annual reporting of withholdings to appropriate taxing -3- authorities. GREAT WESTERN agrees to issue appropriate annual wage and tax statements to those participants and beneficiaries who received distribution(s) during the preceding year ~ to retain a copy of such information on file for the period required by law. GREAT WESTERN agrees to provide AGENCY a monthly report of all disbursements made during .the previous month. 6. INVES~/~ENT VEHIC~-~: GREAT WESTERN agrees to provide the herein described services for AGENCY with the following investment vehicles. A. Great Western Savings Indexed Account ("GWSIA"). The investment vehicle identified as GWSIA shall be savings accounts with GREAT WESTERN. Each such account shall be subject to rules, regulations and statutes to which GREAT WESTERN is subject, as promulgated by the Federal Home Loan Bank Board (F~mR), the Federal Savings and Loan Insurance Corporation (FSLIC) and other such regulatory authorities. (1) The rate of interest for all funds received during the first Contract Year, as defined below, shall yield the highest of: a. M/nimum Guaranteed Plan yield of 9.10%. The over-the-counter yield quotation for the five year United States Government Treasury Note, as set forth on the day before the last business day of each calendar quarter. This yield will be guaranteed for the succeedir~ cale~ quarter regardless of any subsequent change in the five year United States Treasury Note yield. c. Such other yield declared by Great Western, not less than a or b. The rate of interest for all funds for Contract Years subsequent to the first Contract Year shall yield the higher of: a. The over-the-counter yield quotation for the five 'year United States Treasury Note, as set forth on the day before the last business day of each calendar quarter. This yield will be guaranteed for the succeeding calendar quarter, regardless of any subsequent change in the five year United States Treasury Note yield. b. Such other yield declared by Great Western, not less than 1. -4- For pu~ of this Agreement, "Contract Year" shall mean the period of time between the effective date of the Contract, and the same day of the month in each succeeding year; the first Contract Year, however, shall be extended, if necessary in order to ensure that every Contract Year will end' on the last day of a calendar month. (3) 'Interest will accrue daily, using the 365/360 day method, will be credited monthly, on the last day of the month, and will be automatically reinvested to allow for monthly compound/rig. GREAT WESTERN agrees to' collateralize any amounts of PLAN funds invested in GWSIA in excess of Federal Savings and Loan Insurance Corporation insurance limits per participant, with first deeds of trust on commercial, industrial or residential property. The unpaid outstanding principal balance of the collateral shall be adjusted monthly, and shall in the aggregate, at all times equal or exceed 150 percent of the amount of such funds in excess of FSLIC ~ l 'mitso B. Other investment vehicles available within the PIAN are de~r~ on the attached Schedule 1. (1) If applicable, PLAN funds invested in mutual fund options will utilize Great Western Financial Securities Corporation, a wholly owned subsidiary of Great Western Bank, as the Broker/Dealer for such transactions. (2) If applicable, Single Premium Immediate Annuities and other annuity produ~ purcbs~ed by AGENCY pursuant to PLAN will be issued and guaranteed by John Alden Life Insurance Company, a wholly owned subsidiary of Great Western Financial Corporation, or such other life insurance company selected by Great Western. (3) Certain investment vehicles may impose sales charges These sales charges will be disclosed in the prospectus or insurance contract, whichever is applicable. (4) GREAT WESTERN may, from time to time, offer to perform the herein described services for additional and/or alternate investment vehicles upon written agreement 7. ENROT.IMENT SERVICES: GREAT WESTERN agrees to process, or arrange to have processed, the enrollment of eligible employees who elect to participate in PLAN. GREAT WESTERN agrees to provide informational and promotional material ~3ant to PLAN for distribution to employees of AGENCY, subject to approval of such material by AGENCY,such approval not to be unreasonably withheld. AGENCY agrees to allow and facilitate the periodic distribution of such material to employees o -5- GREAT WESTERN agrees to conduct, or arrange-to have conducted, group presentations periodically for employees of AGENCY, to explain PLAN. AGENCY agrees to facilitate the scheduling of such presentations and to provide facilities at which satisfactory atter~ance can be e~. GREAT WESTERN agrees that qualified personnel will be made available periodically to discuss PLAN with individual employees of 8. TITLE AND OWNERSHIP: AGENCY shall at all times be the unrestricted owner of all PLAN assets, in accord~ance with IRC 457 provisions. 9. PRIVITY OF CONTRACT: GREAT WESTERN shall have no privity of contract with PIAN participants. GREAT WESTERN agrees not to accept or honor instructions which may be submitted by participants without written, authorization from AGENCY. 10. FEES AND EXPENSES: GREAT WESTERN, in consideration of its services under the Plan, shall receive an annual administration fee of $12.00 per participant in the Plan. GREAT WESTERN will deduct the administration fee from each Participant sub-account in four equal installments of $3.00 at the end of each calendar quarter. GREAT WESTERN my require each Participant to maintain a cash balance in the GWSIA sufficient to cover administration fees. Other than the termination of the contract, if a Participant's account is transferred from GREAT WESTERN to another provider other than GREAT WESTERN or a subsidiary of Great Western Financial Corporation, a .transfer fee in the amount of twenty-five dollars ($25.00) will be assessed, such fee to be deducted from the Participant's account prior to transfer of funds. 11. TRANSFERS: GREAT WESTERN will allow the transfer of funds in participant sub-account to/from other investment vehicles provided under PLAN which are in effect on the effective date of this Agreement or which may be added under PLAN subsequent to the effective date of this Agreement. Such transfer will be allowed only upon express written agreement between AGENCY, GREAT WESTERN and the applicable investment vehicles and will be allowed throughout the term of this Agreement. Funds will be transferred from GREAT WESTERN to other investment vehicles, as defined above, within ten (10) business, days of receipt by GREAT WESTERN at its headquarters in Northridge, California, shall be upon written authorization by AGENCY. If applicable, transfers, which involve the liquidation of mtual fund shares will be made within five (5) business days following the receipt of the proceeds from the' sale of said mutual Transfers from GREAT WESTERN to other investment vehicles will be in the form of a check payable to the other investment vehicle, sent by regular U.S. mail. Authorized requests for wire transfers will be processed without unreasonable delay, subject to a wire transfer fee as determined by GREAT WESTERN, but not more than fifteen dollars ($15.00) per transfer. Funds transfe~ to GREAT WESTERN from other investment vehicles will be in the form of a check accompanied by the information specified in Section 3(g) of this Agreement. Such funds -6- received will be credited in accordance with the terms of this Agreement. 12. ~CES EXCUSING PERFORMANCE: Except for the generation of earnings as provided herein, the performance by the parties to this Agreement is subject to force majeure and is excused by fires, power failures, strikes, acts of God, restrictions imposed by government, or delays beyond the delayed party's control. Failures of or defaults by investment vehicles other than GREAT WESTERN shall excuse 13. INDEMNIFICATION: NotwithstAnding any other provision herein to the contrary, GREAT WESTERN agrees to be solely responsible to AGENCY for any and all services performed by GREAT WESTERN or its employees under this Agreement. GREAT WESTERN shall be responsible for any error or negligence ccnm~tted by GREAT ~ or its employees. AGENCY shall be responsible for any error or negligence committed by AGENCY or its employees. GREAT WESTERN shall not be liable for investment performance, except as expressly provided for in this 14. ASSIGNABILITY: No party to this Agreement shall assign the same without the express written consent of the other party, such consent not to be unreasonably withheld. Unless agreed to by the parties, no such assignment shall relieve any party to this Agreement of any duties or responsibilities herein. 15. PARTIF~ BOUND: This Agree~t and the provisions thereof shall be binding upon and shall inure to the benefit of the successors and assigns of the respective parties. 16. APPLICABLE IAW: This Agreement shall be construed in accordance with the laws operating within the State of California. 17. UNIAWFJL PRDVISIONS: In the event any provisions of this Agreement shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of the Agreement, but the same shall be construed and enforced as if said illegal or invalid provision had never been inserted herein. Notwithstar~ anything contained herein to the contrary, no party to this Agreement will be required to perform or render any services hereunder, the performance or rendition of which would be in violation of any laws relating thereto. 18. MODIFICATION: This writing is intended both as the final expression of the Agreement between the parties hereto with respect to the included terms and as a complete and exclusive statement of the terms of the Agreement, pur~3ant to California Code of Civil Procedures Section 1856 or its successor(s). No modification of this Agreement shall be effective unless and until such modification is' · evidenced by a writing signed by both parties. -7- 19. NOTICES: All notices and demand to be given under this Agreement by one party to another shall be given by certified mail, addressed ~h~ethe ~ to ~ notified or upon whom a demand is being made, at respec~zve addresses set forth in this Agreement or such' other place as either party may, from time to time, designate in writing to the other party. Notice shall be deemed to be effective on the third business day following the date of roiling. Deferred Compensation Department P.O. Box 6350 Northridge, California 91328 CITY OF TUSTIN Attn: Mary Wynn City Clerk 300 Centennial Way Tustin, CA 92680 IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date first above written. BY: BY: DATE SIGNED: DATE SIGNED: -8- SCHEU3LE 1 Dkm'k~ED ~SATION PLAN AG~~ CITY OF TUSTIN Pursuant to Section 6 of this A~re~ent, other investment vehicles available under this Agreement are as follows: Bond Fund of America (BFA) _ a Mutual Fund Growth Fund of America (GFA) - a Mutual Fund Investment Company of America (ICA) - a Mutual Fund American Balanced Fund (AMBAL) - A Mutual Fund U.S. Gov't Guaranteed Securities - (GVT) - A Mutual Fund (~D~.~ ~ ~Pm~) No Load Mutual Fund Income and Growth - A Mutual Fund Government Securities - A Mutual Fund Aggressive Income - A Mutual Fund Special Situations - A Mutual Fund No Load Mutual Fund Calvert Social Investment - A Mutual Fund Annuity Group Annuity Contract - an investment option Single Premium Immediate Annuity (SPIA) (a distribution option only) -9-