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HomeMy WebLinkAbout86-126 - Deferred Compensation Plan Restated for Basic Salary EmployeesRESOLUTION NO. 86-126 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, ADOPTING THE RESTATED DEFERRED COMPENSATION PLAN FOR EMPLOYEES ON THE BASIC SALARY RESOLUTION. THE CITY COUNCIL OF THE CITY OF COSTA MESA DOES HEREBY RESOLVE AS FOLLOWS: WHEREAS, the Restated Deferred Compensation Plan for employees on the Basic Salary Resolution is hereby adopted per Exhibit "A", effective Decem- ber 1, 1986. PASSED AND ADOPTED this 1st day of Dece 1986. Mayor of the City of Costa Mesa ATTEST: Ci y Clerk of the City of Costa sa STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, EILEEN P. PHINNEY, City Clerk and ex -officio Clerk of the City Council of the City of Costa Mesa, hereby certify that the above and fore- going Resolution No. 86-126 was duly and regularly passed and adopted by the said City Council at a regular meeting thereof, held on the 1st day of December, 1986. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Seal of the City of Costa Mesa this 2nd day of December, 1986. City Clerk and ex -officio Clerk of We City Council of the City of Costa&a EXHIBIT A CITY OF COSTA MESA DEFERRED COMPENSATION PIAN The City of Costa Mesa, California hereby adopts, establishes, and restates the City of Costa Mesa, California Deferred Compensation Plan f^r its Employees, (hereinafter called the Plan). The Plan consists of the provisions set forth in this document, and is applicable to each employee who adopts the Plan. The Plan is effective as to each such employee upon the date he becomes a "PARTI- CIPANT" by signing and filing the Participation Agreement referred to herein with the Employer. ARTICLE I PURPOSE 1.1 The purpose of this Plan is to allow Employees to defer a portion of their compensation to a future time. Such compensation will be withheld by the Employer each pay period and will be invested in the manner allowed. 1.2 Amounts Deferred under this Plan are excludable from gross income for federal and state tax purposes, until they are paid or otherwise made available to the Participant or a Beneficiary. 1.3 Participation in this Plan shall not be considered as an employment contract between the Employer and the Employee nor as giving the Employee any right to continued employment. ARTICLE II DEFINITIONS 2.1 hhenever used in this Plan, the following capitalized words and phrases shall have the meanings set forth below, unless a different context is clearly expressed. (a) AMOUNTS DEFERRED means eoipensation withheld under this Plan, plus any income resulting from the investment of the compensation withheld. (b) BENEFICIARY means a person designated by a Participant, a Participant's estate, or any person, whose rights under this Plan are derived as a result of the Participant's death. (c) THE COMMITTEE means person(s) vested with the authority to establish and serve as adminis- trator of this plan. (d) EMPLOYEE means any person who is eligible to participate in the Employees' Retirement C System. a((DD (e) EMPLOYER means the City of Costa Mesa, California. N U z r* (f) NORMAL, RETIREMENT AGE means any age, at the option of the Participant, that is within the has orange of ages (1) beginning no earlier than the earliest age at which the participant >_ the right to retire under the Employees' Retirement system and to receive immediate bene - the V1 fits without reduction and (2) ending no later than age 70-1/2. Bowever, if a participant ( continues to work beyond the specified ages, Normal Retirement Age shall be the date or to age designated by the Participant, which shall not be later than the mandatory retirement age applicable to the Participant or the date the Participant separates from service with the Employer. (g) PARTICIPANT means an Employee who enters into a written agreement with the respective Employer to defer compensation under this Plan. 2.2 The plural shall include the singular and singular shall include the plural, unless the context clearly indicates the contrary. ARTICLE III ADMINISTRATION 3.1 This Plan shall be administered by the Committee which shall represent the Employer in all matters concerning the administration of this Plan. 3.2 The Committee may engage services, as necessary, to establish, administer, and maintain this Plan under its direction. (a) The ftamount that ieblfor each �reo1,up che is the sum ohe udervtilzdimitation,as ocputedundebor$5,000whichever is less. (b) Underutilized limitation shall be onputed by adding (1) the maximum amount under Section 5.6 for the taxable year and (2) the amount which a Participant could have deferred but did not defer (i.e., the maximum amount under Section 5.6 less any amount previously deferred) for any prior taxable years in which the Participant was eligible to participate in this Plan or another eligible plan. (c) The Participant may only utilize the catch up provisions once, regardless of whether the Participant fully utilizes these provisions or rejoins the Plan. 5.8 In the case of Employees who participate in another plan under Section 403(b) or 457 of the Code, the maximum amounts set forth in Sections 5.6 and 5.7 shall be reduced in accordance with regulations regarding Section 457 of the Code. ARTICLE VI ASSETS '6.1 All assets of the Plan (including Amounts Deferred, property and rights to property purchased with Amounts Deferred, and income attributable to Amounts Deferred, property, or rights to property) shall remain the exclusive property of the Employer, subject to the claims of the general creditors of the Employer only, until paid or otherwise made available to the Partici- pant or Beneficiary under this Plan. 6.2 Neither the Participant nor the Beneficiary shall have any property interest whatsoever in any specific asset of the Employer on account of participation in this Plan. To the extent that the Participant or Beneficiary acquires a right to the payment of benefits under this Plan, the right shall be no greater than the right of a general creditor of the Employer. 6.3 The right to receive any payments under this Plan are non -assignable and non -transferable. Any attempt to assign or transfer shall not be recognized and shall impose no liability upon the Ca mittee. 6.4 Except as otherwise required by law, Mounts Deferred under this Plan shall not be subject to attachment, garnishment, or execution or be transferable by operation of law in the event of bankruptcy or insolvency of the Participant or otherwise. - 2 - 3.3 The Committee is authorized to adopt, amend, or revoke rules for the administration of this Plan. ARTICLE IV ELIGIBILITY 4.1 only Employees of an Employer as defined in Section 2.1 may defer compensation under this plan. ARTICLE V ENRCLEMENT 5.1 An eligible Employee may beom e a Participant by entering into a written agreement (herein- after called Participation Agreement) with the Employer to have compensation withheld by the Employer each pay period and invested as provided under Article VII. O 5.2 The Participant shall specify in the Participation Agreement the amount of Compensation to be F: a withheld and preferences for investment. 'fie Participant mnay designate Beneficiaries in the r•2 Participant Agreement. O (D r• 0_5.3 The Participant Agreement shall remain in effect until it is modified or revoked in accordanceZ 0 rt with rules established by the Committee. A former Participant, who is an eligible Employee, became a Participant by entering into a new Participation Agreement as provided for - CO c, may again in the Committee rules. rn 5.4 Compensation may be deferred during a calendar month only if a Participation Agreement has been N entered into before the first day of that month. rn 5.5 Compensation to be deferred under this Plan shall be subject to minimum amounts which the Committee may specify in its rules and maximum amounts set forth in Sections 5.6 and 5.7 as applicable. 5.6 Except as provided in Section 5.7, the maximum amount that may be deferred for each taxable year of the Participant is 33-1/38 of the Participant's includable compensation (as defined in regulations regarding Section 457 of the Code) for the taxable year or $7,500, whichever is less. 5.7 During one or more of the Participant's last three taxable years ending before the Participant attains Normal Retirement Age, a participant may utilize the catch up provisions as follows: (a) The ftamount that ieblfor each �reo1,up che is the sum ohe udervtilzdimitation,as ocputedundebor$5,000whichever is less. (b) Underutilized limitation shall be onputed by adding (1) the maximum amount under Section 5.6 for the taxable year and (2) the amount which a Participant could have deferred but did not defer (i.e., the maximum amount under Section 5.6 less any amount previously deferred) for any prior taxable years in which the Participant was eligible to participate in this Plan or another eligible plan. (c) The Participant may only utilize the catch up provisions once, regardless of whether the Participant fully utilizes these provisions or rejoins the Plan. 5.8 In the case of Employees who participate in another plan under Section 403(b) or 457 of the Code, the maximum amounts set forth in Sections 5.6 and 5.7 shall be reduced in accordance with regulations regarding Section 457 of the Code. ARTICLE VI ASSETS '6.1 All assets of the Plan (including Amounts Deferred, property and rights to property purchased with Amounts Deferred, and income attributable to Amounts Deferred, property, or rights to property) shall remain the exclusive property of the Employer, subject to the claims of the general creditors of the Employer only, until paid or otherwise made available to the Partici- pant or Beneficiary under this Plan. 6.2 Neither the Participant nor the Beneficiary shall have any property interest whatsoever in any specific asset of the Employer on account of participation in this Plan. To the extent that the Participant or Beneficiary acquires a right to the payment of benefits under this Plan, the right shall be no greater than the right of a general creditor of the Employer. 6.3 The right to receive any payments under this Plan are non -assignable and non -transferable. Any attempt to assign or transfer shall not be recognized and shall impose no liability upon the Ca mittee. 6.4 Except as otherwise required by law, Mounts Deferred under this Plan shall not be subject to attachment, garnishment, or execution or be transferable by operation of law in the event of bankruptcy or insolvency of the Participant or otherwise. - 2 - ARTICLE VII INVESTMENTS 7.1 The Committee is authorized to invest the Amounts Deferred under this Plan in any investment products authorized by ordinance. 7.2 The Committee is authorized to enter into contracts with the companies selected to provide the investment products for this Plan. 7.3 The Committee is authorized to determine the types of investment products and the number of companies for each type of investment product that will be available under the Plan. It may also direct that additional investments shall not be made in a particular investment product or company under the Plan. 7.4 At the time of enrollment each Participant shall designate preferences for the investment of Amounts Deferred by the Participant from among the investment products and companies available under the Plan. However, the desigmv lr,n of investment preferences does not give the Partici- pant any right, title, or interest in Ue Amounts Deferred. 7.5 Designation, charges or revocations of investment preferences shall be made in accordance with rules established by the Committee. 7.6 Any action taken by the Cortnittee regarding the investment of Amounts Deferred shall not be considered as guaranteeing any investment not attesting to the suitability of any investment for the purposes of meeting future obligations of the Participant. ARTICLE VIII ACOMITS AND REPORIS 8.1 To facilitate an orderly administration of the Plan, the Committee shall maintain a deferred compensation account for each Participant. However, the maintenance of the account does not give the Participant any rights except as otherwise provided in this Plan. 8.2 Each Participant's account shall be credited with the amount of compensation deferred and shall be further adjusted by an increase or decrease resulting fran investments made under Article VII, any casts for implementing and administering the Plan, and any withdrawals or payments of benefits. 8.3 Each Participant shall be provided with written reports on the Participant's deferred cc mpensa- tion account in accordance with rules established by the Committee. ARTICLE IX BENEFITS 9.1 Benefits under this Plan shall only be paid or made available to the Participant upon (a) sepa- ration from service, except as provided in Articles XI and XII, or (b) the occurrence of an unforeseeable emergency as provided in Article X. 9.2 Payments of benefits shall commence no later than 60 days after the close of the calendar year in which (a) the Participant or former Participant attains or would have attained Noamal Retirement Age or (b) the Participant separates from service, whichever is later. 9.3 Payment of benefits shall be made primarily for the benefit of Participants or foamer Partici- pants. Thus, the method for payment selected by the Participant shall be such that benefits payable to a Beneficiary are not more than incidental. 9.4 If a Participant dies before the entire amount of benefits is paid to the Participant, the entire amount of benefits (or the remaining part if payment has cammenced) shall be paid to the Beneficiary as follows: (a) If the Beneficiary is the Participant's surviving spouse, benefits shall be paid over the life of the Beneficiary or shorter period. (b) If the Beneficiary is not the Participant's surviving spouse, benefits shall be paid over a period not in excess of 15 years. 9.5 A Participant may elect, before benefits became payable, the method for payment of benefits (except for emergency withdrawals under Article X) from among the options made available by the Committee. Additionally, a Participant may irrevocably elect before benefits become pay- able, to defer payment of sane or all of the benefits to a fixed or determinable future time (to the extent allowable under regulations regarding Section 457 of the Code). The elections shall be made in accordance with rules established by the Committee. In the absence of an election of the method for payment of benefits, benefits shall be paid in accordance with the Committee rules. - 3 - ID Ln Co w N 0 + rm N O .0 9.14 C�w� 0 mn ARTICLE XI TRANSFERS BETWEEN EMPLOYERS UNDER THIS PIAN 11.1 In the event a Participant charges employment from one Employer under this Plan, the change in employment shall not be considered as a separation from service under this Plan. The Partici- pant's deferred compensation account shall oontinue in full force and effect. 11.2 The Amounts Deferred in the Participant's account may be transferred to and became an asset of the new Employer. The new Employer shall then maintain the Participant's rights under this Plan. ARTICLE XII PLAN -TO -PLAN TRANSFERS 12.1 then a Participant separates frau service (i.e., no longer employed by an Employer under this Plan), benefits shall not be payable upon separation from service, regardless of any other provision of this Plan, and Amounts Deferred by the Participant may be transferred if the following conditions exist: (a) The Participant separates fran service to accept employment with an entity which has an eligible plan and is located within the State of California. (b) The Participant has became a Participant in the eligible plan of that entity; and (c) The eligible plan of that entity accept the transfer of previously deferred amounts under another eligible plan. 12.2 This Plan shall accept the transfer of a Participant's previously deferred amounts under another eligible plan which has a plan -to -plan transfer provision. ARTICLE XIII AMENLMENT OR TERMINATION OF THE PIAN 13.1 The Committee is authorized to amend this Plan or adopt a new plan at any time. However, no amendment or substitution shall affect the right of a Participant or Beneficiary to receive payment of benefits, to the extent of any compensation deferred before the time of the amend- ment or substitution, as adjusted for investment results prior to and subsequent to the amend- ment or substitution. 13.2 The Cmdttee is authorized to terminate this Plan as any time. In the event of termination, the Participants in this Plan will be considered as having withdrawn from the Plan as of the date of termination of the Plan. Participants shall be treated as though they had separated from service, deferrals shall cease, and benefits shall be payable. - 4 - 9.6 A Participant may designate a Beneficiary or Beneficiaries who will receive the Participant's benefits in the event of the Participant's death. If a Beneficiary has not been designated or the designation is ineffective, the Participant's estate shall became the Beneficiary. upon the death of the Participant, any Beneficiary entitled to receive the Participant's benefits shall have all the rights of the Participant. ARTICLE x UNFORESEEABLE EMERGENCY 10.1 In the event a Participant incurs an unforeseeable emergency as defined in Section 10.2, the Participant may apply for an emergency withdrawal in accordance with the Committee's rules. 10.2 An unforeseeable emergency means severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a Participant's dependent m (as defined in Section 152(a) of the Code), loss of the Participant's property due to casualty, O or similar extraordinary and unforeseeable circumstances beyond the control of the Participant. N rt w 10.3 Emergency withdrawals shall only be permitted by the Committee to the extent reasonably needed r to satisfy the emergency and shall be paid as directed by the Committee. An emergency with - 0 O drawal shall only be approved to the extent that severe financial hardship cannot be relieved " by: O ' M Z (a) Reimbursement or compensation frau sources other than an emergency withdrawal under the 00 un = Plan. rn I N (b) Cessation of deferrals under the Plan; or dl (c) Liquidation of the Participant's assets, to the extent that the liquidation of assets would rot itself cause severe financial hardship. ARTICLE XI TRANSFERS BETWEEN EMPLOYERS UNDER THIS PIAN 11.1 In the event a Participant charges employment from one Employer under this Plan, the change in employment shall not be considered as a separation from service under this Plan. The Partici- pant's deferred compensation account shall oontinue in full force and effect. 11.2 The Amounts Deferred in the Participant's account may be transferred to and became an asset of the new Employer. The new Employer shall then maintain the Participant's rights under this Plan. ARTICLE XII PLAN -TO -PLAN TRANSFERS 12.1 then a Participant separates frau service (i.e., no longer employed by an Employer under this Plan), benefits shall not be payable upon separation from service, regardless of any other provision of this Plan, and Amounts Deferred by the Participant may be transferred if the following conditions exist: (a) The Participant separates fran service to accept employment with an entity which has an eligible plan and is located within the State of California. (b) The Participant has became a Participant in the eligible plan of that entity; and (c) The eligible plan of that entity accept the transfer of previously deferred amounts under another eligible plan. 12.2 This Plan shall accept the transfer of a Participant's previously deferred amounts under another eligible plan which has a plan -to -plan transfer provision. ARTICLE XIII AMENLMENT OR TERMINATION OF THE PIAN 13.1 The Committee is authorized to amend this Plan or adopt a new plan at any time. However, no amendment or substitution shall affect the right of a Participant or Beneficiary to receive payment of benefits, to the extent of any compensation deferred before the time of the amend- ment or substitution, as adjusted for investment results prior to and subsequent to the amend- ment or substitution. 13.2 The Cmdttee is authorized to terminate this Plan as any time. In the event of termination, the Participants in this Plan will be considered as having withdrawn from the Plan as of the date of termination of the Plan. Participants shall be treated as though they had separated from service, deferrals shall cease, and benefits shall be payable. - 4 - ARTICLE XIV MISCELIANEDUS 14.1 The Committee is authorized to determine any matters concerning the right of Participants under this Plan and the Committee's determination shall be final and binding on the Participants and Beneficiaries. 14.2 The Committee, the Employer, and their agents shall be held harmless by the Participant and the Participant's Beneficiaries, heirs, successors, and assigns for all acts performed under the Plan in good faith, including but not limited to the investment of Amounts Deferred. 14.3 The Committee does not represent or guarantee that any particular federal or state tax conse- quences will occur because of participation of this Plan. ARTICLE XV APT111CABLE LAW 15.1 This Plan shall be construed under the laws of the State of California. ID N 15.2 This Plan, which is intended to be an eligible state deferred compensation plan within the t =LO CC) meaning of Section 457 of the Code, shall be interpreted consistent with that Section and all regulations regarding that Section. 0 p 4 Z S1 (1)0 O 0 In Fa — 5 —