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HomeMy WebLinkAboutCC RES 79-0611 2 5 5 bi ? 8 9 10 ! II 15 16 25 ~ ~9 RESOLUTION NO. 79-61 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN ADOPTING THE DEFERRED COMPENSATION PLAN FOR THE EMPLOYEES OF THE CITY OF TUSTIN. WHEREAS, the City of Tustin has established a Deferred Compensation Plan ..... for the employees of the City on March 1, 1976; and' WHEREAS~ tbs Deferred Compensation Plan as adD,)ted was written to comply with the then current internal Revenue Code and Rules and Regulations promulgated thereunder; and WHEREAS, the 95th Congress passed the Revenue Act of 1978 (P.L. 95-600) which has a significant impact on the Deferred Compensation Plan of the City of Tustin, and does require certain amendments to the Deferred 'Compensation Plan to insure that continued deferral of compensation by employees will continue to be excluded from the employees' gross income in the year of deferral; NOW, THEREFORE, BE IT RESOLVED that the City does hereby authorize the proper amendments to the Deferred Compensation plan so that i~ complies with the Revenue Act of 1978 (P.L. 95-600); and IT, IS FURTHER RESOLVED that the Deferred Compensation Plan' of the ci of Tustin is hereby amended by amending it in.its entirety and adopting and accep"r,g the revised plan document, a copy of which is attached hereto marked Exhibit A and incorporated herein by this reference.as though set forth in full hereat, which contains the appropriate amendments for compliance with the Revenue Act of 1978 (P. L. 95-609) and the Mayor and City Clerk are hereby authorized and directed on behalf of the City of Tustin [o confirm said amendment. PASSED AND ADOPTED at a reguIar meeting of the City Council of the City of T'ustin on this 20th day of August, 1979. ATTESTS 3GR:se:D'3/28/79 T/R/Def Comp D:I STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY ~ OF TUSTIN RUTH C. POE, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, does hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 79-61 was duly and regularly introduced, passed and adopted at :a-regular meeting of the City Council held on the __ 20th · lday of August , 1979, by the following vote: .............. AYES: NOES: ABSENT: COUNCIU4EN: _SCHUSTER, ..S.A.L.~A.RELLI, S.HARP, ..WEL..SH,. ~..NN. EDy_~_ COUNC iL,~iEN: NONE ......... ~ ..... t . .. , ~ ........ ....._.. COU~CIL~4EN: NONE RUTH C. PO~, City of Tustin, cal~r-n~a EXHIBIT A . AMENDMENT TO THE DEFERRED COMPENSATION PLAN FOR CITY OF TUSTIN The Deferred Compensation Plan adopted March 1, 1976 is hereby amended in its. entirety by substitutin9 the attached plan · · document therefore. IN NIT,NESS WHEREOF the undersigned has caused th~s amendment to bm executed this CITY OF TUSTIN, a municipal corporation ..... r ~ .(EmPlOYer) .i-. SCHUSTER MAYOR' OF THE CITY OF TUSTIN ...... (Tille) ............ I .... i EXHIBIT A SCHEDULE OF CHANGES RESULTING FROM ~HE TAX REFOFbM ACT OF 1978 , I. 'i'he following Sections were deleted and not replaced-- 1. Section 4.2 2. Section 6.3 - Last sentence only II. The following Sections were deleted with new Sections added: · 1. Section 3.2 2. Section 3.5 3. Section 3.6 4. Section '3.7 5.. Section 4.1 o 6. Section 5 - Added 5.1 and 5.2 7. S=_ction B III. The following Sections are new'. 1. S~c.tion 3.8 2. Section 6.6 · i. · . SECTION 1. NAME' DEFERRED COMPENSATION PLAN(' FOR CITY OF TUSTIN ~he name of the Plan is the City of Tustin, California Deferred Compensation'Plan (hereinafter referred to as the Plan). SECTION 2. PURPOSE- . o The pr. imary purpose of the Plan is to attract and hold personnel by pem~tt~ng them to enter into a§reements with the ~hich will provide for deferral of payment of a portion of their current compensa-. .... tion until death, disability, retirement, termina, tion of employment, or othe. event as provided herein, in accordance with the provisions of Sections 5321' - 53214 of the Government Code of the State of California, and the applicable provisions of the Internal Revenue Code. SECTION 3. DEFINITIONS' For the purposes of this Plan, certain ~,~ords and phrases used here~n w~ll have the fol 1 owi nD mean1 nDs' ' 3.1 "Employer" shall be the 3.2 "Employee" shall mean only those individuals who perform service for the -£mployer as e'ither a common law emp.loyee or an independent contractor. "Participant" shall mean any employee' who fulfills the requirements of enrollment into th~s Plan as designated eligible by the 3.4 "Part';cipation Agreement" shall mean the agreement executed an~ filed by an employee with the employer pursuant to Section 4, in which the · employee elects to become a participant in the Plan. 3.5 "Includible Compensation" shall mean compensation for service performed- for 'the e~,ployer which (takin§ into account the provisions of Sections 457 and 403(b) of -the Internal Revenue Code) is currently includible ir §ross income. Amounts of compensation shall, be determined ~ithout re~ard to any community property laws. 3.6 "Employment Period" shall mean any calendar month. 3.7 "Disability" shall mean the complete and permanent inability of a par- cipant to engage in his usual oc'cupation by reason of a medically determ~inabie physical or mental impairment as determined solely by the Employer on the basis of advice from a physician or physicians. 3.8 "Norm.,al Retirement Date" shall mean the later of' A. The normal retirement age specified in any other retirement plan ma~n- · ta'ined for the. employee by -the employer, or B. The date the employee attains age 65. REV 2/7 9 SECTION 4. PARTICIPATION IN THE PLAN' 4.1 A Participation Agreement shall be effective for the first employment period following its execution and filin~ with the emp. loyer. The Par- ticipation Agreement shall continue from per~od to per~od and remain, in full i~orce and effect Unless terminate, d as provided in Section ~.2, 4.2 A participant may terminate his participati'on in the Plan, and thereby terminate further deferral of his compensation, by filing with the employer an executed written notice of termination at least 30 days prior ~o effective date of termination. Once terminated, a former partici- pant cannot rejoin the Plan during the' employment period in which ter- mination occurred; however, he may elect to become a participant in subsequent employment periods., rio amounts shall be t}ayable to an employe~ upon terminatin~ his participation ~n the Plan unless otherwise due pursuant to Section 7. 4.3 A participant may select, pursuant to Section 6, one or more investment objectives .provided that the amount deferred for each objective equals or exceeds, the minimum of not' less than $10 per pay period. S:C~ION 5. DEfeRRAL OF COMPENSATION- 5.1 During each employment period in which the employee is' a participant in the Plan, the.employer shall defer payment of such part of his compen- sation as is specified by the employee in his Participation Agreement provided that, except as provided in 5.2, the maximum that each par- ticipant may defer under this Plan for any taxable year shall not exceed the lessor of- . A. $7,500.00, or B . J~ of the participant's Includible Compensation. 5.2 The ~ax~m deferral described in 5.1 shall not be applicable for one or more.of the participant's last three taxable years ending before the a~..ain~,. .... of normal retirement age under this Plan. In that instance, the maximum shall be the lesser of: · A. $1.5,000.00, or · B. The sum of - (i)IThe maximum deferral amount established for the purpo'ses of Section 5.1 for the taxable year (determined without regard tO this Section), plus (ii) So much of the maximum deferral amount established for the Pur- posesI of Section 5.1 for taxable years before the taxable year as has not theretofore been used under Section 5.1 or under this Section. . · SECTION 6. AD~INISTRATION OF THE PLAN' 6.1 The Plan shall be administered by an Advisory Committee who shall be the sole authority to enforce the Plan and shall be responsible for the operation of the Plan in accordance w~th its terms, afd shall deter- mine all the questions arising out of the administration, interpreta- tion, and application of the Plan, ~;.hich determinations shall be con- clus~ve and binding on all persons. . 6.2 The employer shall establish a deferred compensation fund to %¢hich all deferred compensation shall be credited at such t~mes as the compensa: ...... tion would have been payable to individual employees if not a partici. pant of the Plan. Separate book accounts w~ll be est. a. blished for eaci. employee participation which will show all amounts of deferred compen- s. ation, investments made, shares acquired and earnings and §ains on invest~,nen'ts. Each book account w~ll be valued at least quarterly. 6.3 On executing the Participation A~reement, the employee shall desk§hate his investment objective prospectively only. The employer may invest amounts of' deferred compensation in mutual fun/t shares, or interest deposits with a savings and loan company or banking institutions, or investments w~th a stockbroker, or life insurance and/or fixed/ variable annuity contract with an insurance company, whichever in the employer's sole ~ud§ment will best achieve the ~mployee's object~ves. The employee's investment designations are intended to be an expression of mere investment preferences and do not obligate the employer to follow the ~"~ ' _,,~v,oyee s desi§nations. . 6.4 The employer m~y,.but is not required to, invest deferred compensation at least monthly in the investment vehicles provided for in this P]an. All amounts of deferred com:pensation, whether or 'not invested by the employer, shall at all times be 'and remain an asset of the ~mployer. Any and all dividends, capital gains distributions, interes, t or other income payable on any of the employer's investments of deferred compen-' sation also shall be an asset of the employer. Ihe employer shall have the sole right to vote any shares of stock which it may acquire bY such investment. - 6.5 Neither 'this Plan or any Participation Agreament nor any book account sh~il' be deemed to create a trust or custodial account on behalf of, or for, ~ne benefit of any participant of the Plan or his beneficiaries. No participant of the Plan or his beneficiaries shall have, by reason of th~] Plan, Participation Agreement, or book account, any secured or preferred interest in, or to, any assets of the employer.. The employer shall have only a contractual obl igation to pay the benefits -due the participant under the Plan. -' · 6.6 All amounts of compensation deferred under this Plan, all property and rights purchased with such amounts, and all ~ncome attributable to such amounts, property or rights shall remain (until made available'to the participant or other beneficiary)solely the property and rights of the employer, without being restricted, to the provision of benefi-ts under this Plan, subject only to the claims of the employer's general cre- di tor$. ' SECTION 7. DISTRIBUTION OF BENEFITS' Election---Each participating employee must elect the payout options and the payout periods for each event stated in Sections 7.:>, 7.-3~,.'.,~o4, and 7.5, at the time of signing each Participation Agreement. 7.2 Retirement---In the event.of retirement, the full ben'fits credited to the participant's book account plus or minus subsequent investment gains or losses, but less any Federal or State i~come taxes required tp. be withheld, shall be distributed to him in any one or more of the fol- lowing ways' 7.2(a) In a lump sum. 7.2(b)' In monthly, quarterly, semi-annual or annual installments' over a period not to exceed l0 years from date di~tributiolnI began. or over a period established by the employer not greater than the life expectancy of the participant; or, for a participant eligible for an annuity payout option; installments during the lifetime of the participant with a provision for a period.cer- - tain.. Life expectancy shall be determined once by the employer, on the date of the initial installment distribution. Install- - . ment distributions will be made in substantially equal pa3nnents,~ but no payment shall have a value of less than (the smaller of) $50 or the balance credited to the participant's book account. 7.2Cc) Postpone payments under 7.2{a) and {b) above until participant reaches his 55th, 60th, 65th or 70th birthday. Participant's book account balances may continue to be invested until-- .in the employer's sole judgment--cash is to be withdrawn for payment Olf benefit~. Payment of benefits will co~ence on the first day of the thirdl~.onth following termination of employment. Payment of benefits under' S~ction 7.2(c) will co~ence on the first day of the month fol- lowing participant's birthday. 7.3 Disability---In event of termination of employment by reason Of dis- I ability, distribution of benefits will be as provided in Section 7.2.. 7.4 Other Termination---In event of termination of emplojnuent by reason o._n.=_r than those specified in Sections 7.2 and 7.3, then the full bene- fits creditedI to participant's book account, plus or minus subsequent in'~estment gains or losses, but less any Federal or State income taxes required to b~ withheld, shall be distributed to him in any one or more of the fol lowing ways' . . 7.~ ~'(a) In a lump sum. . ' . _ 7.4(b) In monthly, quarterly, semi-annual, or annual installments of substantially equal payments over a period not. to exceed seven {7) years from date distribution be§an., but. no payment, shall have a value of less than (the smaller of) $50 or the balance credited to the participant's book account. - 7.4(c) Postpone pajq~ents under 7.4{a) and {b) above until participant reaches his 50th, 55th, 60th, or' 65th birthday. ~he employee shall elect the method of d~str~bution at the t~me of signing each Participation Agreement. lhe employer shall make distri- bution by any of the foregoing methods or combinations thereof. Par- ticipant's book account balances will continue to be invested until--in the employer's sole judgment--cash is to be withdrawn for payment of benefits. Payment of benefits under Section ?.4(a) and (b) will commence on the first day of the third month following termination of employment. Payment. of benefits under Section 7.4(c) will corranence on the first, day of the month following the participant's birthday. 7.5 Death--In event of the death of any participant, either before or after termination of employment, then the full benefits credited to his boo_k_ account, less any Federal' or State withholding taxes required by law, shall be distributed to his beneficiaries in the manner designated in the participant's Participation Agreement. The employer shall, in th~ case of lump sum payment, make payment 90 days after notification of death of the participant, in compliance with any State laws governing the payment of death benefits. 7.6 Financial Catastrophe--In the event of financial catastrophe affecting ~' participant where the withdrawal of funds would be necessary to prevent §reatl hardship to the participant and the amount necessary to meet that. financial catastrophe, and is not reimbursed by insurance, a partici- pant ~ay apply to the employer for such amount from the Plan prior to retirement or to termination of participant's employment with the julris- diction.., Examples of such need under the foregoing criteria may be catastrophic illn~_iss, flood, fire, earthquake, death in the family, or disabling. .injury, or examples of simi'lar importance. Withdrawals for expenditures normally bud§etable, such as downpayment on a home, purchase of an automobil e, or col I e§e expenses, will not be permitted. Any- amount so approved hereunder for withdrawal shall be paid to the participant in a lump SlUm.. The withdrawal shall be' effective at the later of the dates specified in the participant's application or the date approved by the employer. " m S~ ~ ~ ' r~_~t ~ ~ ~ ~m ~ ~.~ .~.~,, 8. .EI:t?~'.mU ~ ~_R PARTICIPATION' hocw]thstand]ng any other provisions of this Plan the employer may make additional deposits in the deferred compensatSon fund as additional compen.- sa~San 7or services to be rendered by the employee to the employer' durin~ an emp] o~~n~ perSod; provided, . g. Ihe ~p~oyee has elected to have such additSonal compensatSon de~erred, 5nvested, and d~strSbuted, pursuant to'thSs ~lan, prior to the parSad 5~ ~h~ch the compensatSon.~ill be earned, and B. lha~ such additional deposit shall not exceed the maximum deferral per- mi~ted by S~ *' ~c~]o~ 5. SECTION 9. I~ON-ASSIGNABILIT¥' ~o the fullest extent permitted by law, the interest of a participant in the contractual obligation of the employer, established by the Plan,'shall not be assignable in whole or in part, directly or by operation of law or other{vise, in any manner and no right or interest of a part:Scipant in.the employer's contractual obli§ation shall be liable for or subject to any obli§ation or 'liability of such participant. SECTION lO. MISCELLANEOUS' lO.1 Status of Participants--Neither the establishment of the Plan nor any modification thereof, nor the establishment of any book account nor the payment of any benefits, shall be construed as giving to any partici- pant or other person any legal or equitable ri§ht against the employer except as here~n provided; and, in no event shall the terns of employment of any employee.or participant be modified or in any way affected hereby. , i0.2 Condition of Plan--It is a condition of this Plan, and each employee by participating herein expressly agrees, that he shall' look solely to the general assets of the employer for the p.ayment of any benefit to which he is entitled under the Plan. 10.3 Governing Law--This Plan shall be construed, administered,land enforced · according to the laws of the State of California. 10.4 De~ign~tion of Beneficiaries--Each participant shall have the right, by written notice to the employer, to designate beneficiaries eo receive any benefit to which said participant may. be entitled in the event of his death prior to the complete distribution of benefits. If no such designate, on is in effect on a participant's death, his beneficiary shall b: his eS.~l~ _ , or if no executor or administrator is appointed within six ~6~- ~anths after the participant's death the employer shall direct s~id benefits to be paid to the beneficiary or beneficiaries ~esignated in his last ~ill, or if there be no Will, then to the heirs at law of th_= .... ~ ici pant SECTION ll "~ .... ' ' . ~:-_~,D.~qENT AND TERMINf~TION ll.l The e~ployer may, at any time and from time to time, modify, amend, or ~e,,,,]na._ the Plan in whole or in part (including retroactive amendments) or cease deferring compensation pursuant to the Plan, by delivering to each participant a written copy of such modification, amendment, or ter- mination, or of a notice that it ceased deferring compensation; provided, how.:ver, the employer sh~ll not have the right to reduce or affect 'the value of any participant's book account or any rights accrued under the Plan prior to such modification, amendment, termination, or cessation. ll.2 In the event of the termination of {he Plan by the employer under Sec- tion ll.1, the value of all participant's book account shall be dis- tributed to the participants ~r their beneficiaries in lump sums on the sixtieth (60th) day after termination of the Plan. . ·~ SECTION 12. EHPLOYER NOT RESPONSIBLE: The employer may, but is not required to, invest funds held pursuant to agreements between participants and the employer in accordance w~th the requests made by each 'participant at the time of enrollment or change in -- enrollment, prospectively only. ~he employer shall Yeta~n the r~§ht to' . approve or disapprove such investment requests. Any action by the ~ployer in investin§ funds, or approvin§ of any such investment of i~unds, shall not be considered to be either an endorsement or §u~rantee of any investment, nor shall it be considered to attest to the financial soundness or the su~t- ability of any investment for the purpose Of ~eet~n~ future obligations provided in Section' 7. '