HomeMy WebLinkAboutResolution No. 3464 RESOLUTION NO. 3464
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF DOWNEY CONFIRMING AN EMPLOYEES'
DEFERRED COMPENSATION PLAN AND AUTHORIZING
THE EXECUTION OF AGREEMENTS RELATED TO SAID
PLAN BY THE CITY MANAGER
WHEREAS, the City of Downey has in its employ employees who are
and will be rendering valuable services to the City; and
WHEREAS, some of said employees may desire to defer income until
retirement for the purpose of deferring Federal and State Income Taxes on
said income; and
WHEREAS, the City Council of the City of Downey has established
a Deferred Compensation Plan for the said employees and believes that said
Plan will enhance the efficiency and morale of the employees and will be
in the best interests of the City; and
WHEREAS, said Plan is in accordance with Federal and State law
and regulations; and
WHEREAS, the City Council finds that it is for the benefit and
in the best interests of the City to maintain the Deferred Compensation
Plan heretofore approved by the City Council;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES
RESOLVE AS FOLLOWS:
SECTION 1. The City Council confirms the establishment of said
Deferred Compensation Plan for said employees of the City and that said
Deferred Compensation Plan attached hereto as Exhibit "A" be, and the same
shall be effective and remain in effect until terminated by further
resolution of the City Council.
SECTION 2. The City Manager of the City of Downey is authorized
to execute agreements with appropriate institutions approved by the
Deferred Compensation Committee providing for those organizations to have
custody of amounts deferred pursuant to this Plan, provided said agree-
ments are approved by the Committee and the City Attorney.
APPROVED AND ADOPTED this 5th day of October, 1977.
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Richard M. Je n ngs , Mayor/
ATTEST:
City Clerk
I HEREBY CERTIFY that the foregoing Resolution was duly adopted
by the City Council of the City of Downey at a special meeting thereof
held on the 5th day of October, 1977, by the following vote, to wit:
AYES: 3 Council Members: Miller, Jackman, Jennings
NOES: 0 Council Members: None
ABSENT: 2 Council Members: Greene, Scotto
City Clerk
CITY OF DOS NEY , CALIFORNIA '
• U ' F''E ICED C(A ; 1 - :,IS11TIOL PLTU
SECTION I. NAME: The name of this Plan is the City of Downey,
California, Deferred Compensation Plan '(hereinafter
referred to as the Plan),
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SECTION 2. PURPOSE: The primary purpose of the Plan is to
attract and hold personnel by permitting them to
enter into agreements with the City of Downey,
California which will provide for deferral of
payment of a portion of their current compensation
until death, disability, retirement, termination !`
of employment, or other event as provided herein,
in accordance with the provisions of Sections
53212 - 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
words or phrases used herein will have the following
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meanings:
3.1 "Employer" shall be the City of Downey,
California. .
3.2 "Employee" shall mean all officers and full-
time employees of the City of Downey,
California.
• 3.3 "Participant" shall mean any employee who
fulfills the requirements of enrollment into
this plan.
3.4 "Participation Agreement" shall mean the
agreement executed and 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 "Compensation" shall mean the .total of all
amounts which would be paid by the employer
to or for the benefit of an employee (if he
were not a participant in the Plan) for
actual services for the period that he is a
participant.
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3.6 "Employment Period" means a period from
January 1 through December 31 of the same
year, except that the first year of an employee
who is on the payroll on the effective date
of the Plan shall be the period beginning
-�- with the effective date of the Plan and ending
on December 31.
EXILIBIT "A"
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DEFERRED COMPENSATION PLAN - Page 2
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3.7 "Disability" means the inability of a
participant to engage in his usual
_occupation by reason of a medically
determinable physical or mental
impairment as determined by the employer
• on the basis of advice from a physician
or physicians.
3.8 "Committee" shall consist of such .employees
as shall be established by Administrative
Regulations.
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SECTION 4. PARTICIPATION IN THE PLAN:
4.1 Each employee may elect to become a
participant of the Plan and defer payment
of part of his compensation by executing
a written Participation Agreement and
filing it with the employer no later than
the day before the beginning of any
employment period. For all employees
on the payroll on the effective date of
the Plan, the election must be made
• within sixty days of the effective
date of the Plan, for the first employment
• period.
4.2 A Participation Agreement shall be
effective for the first employment period
following its execution and filing. The
Participation Agreement shall continue
from period to period and remain in full
. force and effect unless terminated as
provided in Section 4.3 below.
4.3 A participant may terminate his participation
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 to
effective date of termination. Once -
terminated, a former participant cannot re-
join the Plan during the employment period
in which termination occurred; however,
he may elect to become a participant in
subsequent employment periods. No amounts
shall be payable to an employee upon
terminating his participation . in the Plan
unless otherwise due pursuant to Section 7.
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DEFERRED CO1•iPENSATION PLAN - Page 3
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4.4 A participant may select pursuant to Section 6, one or more investment
objectives provided that the amount
deferred equals or exceeds the minimum
• of not less than $5 per bi- weekly pay
period. •
SECTION 5. DEFERRAL OF COMPENSATION:
During each employment period in which
. the employee is a participant in the
Plan, the employer shall defer payment
of such part of his compensation as is •
• specified by the employee in . the
Participation Agreement which he has
executed and filed with the employer.
SECTION 6. ADMINISTRATION OF THE PLAN:
6.1 The Plan shall be administered by the
Committee who shall have the sole authority
to enforce the Plan and shall be responsible
for the operation of the Plan in accordance
• with its terms, and shall determine all
questions arising out of the administration,
interpretation, and application of the Plan,
which determinations shall be conclusive
and binding on all persons.
6.2 The employer shall establish a deferred
compensation fund to which all deferred
compensation shall be credited at such
• times as the compensation would have been
payable to individual employees if not a
participant of the Plan. Separate book
accounts will be established for each
employee participant which ;•gill show all
amounts of deferred compensation, investments
made, shares'acquired and earnings and gains
on investments. Each book account will be
valued at least annually on a method as
outlined in Section 6.3.
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6.3 On executing the Participation Agreement,
the employee shall designate his investment
objective, prospectively only. The employer
• may invest amounts of deferred compensation
in mutual fund shares, or interest deposits
with a savings and loan company or banking
institution, or investments with a stock-
broker, or life insurance_ and/or fixed`
variable annuity contract with an insurance
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DEFERRED COMPENSATION PLAN - Page 4 •
SECTION G. 6.3 CON'T
• company, whichever in the employer's
sole judgment will best achieve the
employee's objectives. The employer
is the sole owner and beneficiary of
all funds, investments, or other
• assets under this Plan. •
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6.3 (a) If a mutual fund is selected
as the investment vehicle,
all dividends and capital
gains distribution will be re-
invested in shares of said
mutual fund. The total of
full or fractional mutual fund
shares purchased or acquired
through reinvestment shall
serve as a basis for measuring
the value of the participant's
• book account. Value will be
the total number of full and
fractional shares held times
the net asset value per share
reported by the fund on the
valuation date.
6.3 (b) If interest time deposits in
savings and loan or banking
institutions is selected a:, the
investment vehicle, interest
earnings will be credited to the •
participant's book account when
declared by the institution.
Annual valuation will include
all interest earned, whether
paid or accrued.
6.3 (c) If investments are selected,
dividends and interest earnings
will be credited to the City of
Downey Deferred Compensation Plan •
Investment Account with the
stockbroker.
The market value of all investments
and cash in the account shall be
determined on December 31st each
• year and each participant's share
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DEFERRED COMPENSATION PLAN - Page 5 }
• SECTION 6. 6.3 (c) CON'T
of the account shall be valued by 1
any cash income, plus or minus any
market action. New participants
may join the Account after existing
' participants values are determined.
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6.3 (d) If a variable annuity contract is
selected as the investment vehicle,
the value of participant's
• individuals accounting during the
• Employment Period shall be determined
by the Insurance Company's
• Accumulation Unit, which is a
statistical inde,: of the net investment
results of the Variable Contract
Account. At retirement, the amount
of annuity payments shall be T
determined by the Insurance Company's
last Annuity Unit, which is a statistical
_ index of the net investments results
of the Variable Contract Account.
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6.4 The employer may, but is not required to,
invest deferred compensation at least monthly •
in the investment vehicles 'provided for in
this Plan. All amounts of deferred compensation,
whether or not invested by the employer, shall
at all times be and remain an asset of the
-- employer. Any and alI dividends, capital M
gains distributions, interest or other income
payable on any of the employer's investments
or deferred compensation also shall be an
asset of the employer. The employer shall.
• have the sole right to vote any shares of
stock which it may acquire by such
investment. .
6.5 Neither this Plan nor any Participation
Agreement nor any book account shall be
deemed to create a trust or c�.istodi.al account
• on behalf of or for the benefit of any
participant of the Plan or his beneficiaries.
No participant of the Plan or his
beneficiaries shall have, by reason of the
Plan, Participation Agreement, or book
• account, any secured or preferred interest
in or to any assets of the employer.
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DEFERRED COMPENSATION PLAN - Page 6
SECTION 6.5 CON'T .
• The employer shall have only a contractual
obligation to pay the benefits due the
participant under the Plan.
SECTION 7. DISTRIBUTION OF. BENEFITS:
7.1 Election - Each participating employee must
elect the payout options and the payout
periods for each event stated in Sections •
7.2, 7.3, 7.4, and 7.5, at the time of
signing each Participation Agreement.
7.2 Retirement - In event of retirement, the
full benefits credited to participant's
book account plus or minus subsequent
investment gains or losses, but less any
Federal or State Income Taxes required to be
withheld, shall be distributed to him in any
one or more of the following ways:
7.2 (a) In a lump sum.
7.2(b) In monthly, quarterly, semi- annual or
annual installments over a Dcriod not
to exceed ten (10) years from elate
distribution began or over a ;period
established by the employer not
greater than the life expectancy of
the participant. Life expectancy
shal_1 be determined once by the
employer, on the date of the initial
installment distribution. Installment
distributions will be made in
substantially equal payments, but nd
payment'shall have a value of less
than (the smaller_ of) $50 or the
balance credited to the'participant's
. book account.
Participant'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 will commence on the first-day of
the second month following termination of
employment.
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DEFERRED COMPENSATION PLAN - Page 7
7.3 Disability - In event. of termination of
employment t by reason of disability
distribution of benefits will be as provided
in Section 7.2
7.4 Other. Ter.:ination - In event of termination
of employment for reason other than those
specified in Sections 7.2 and 7.3, then the
full benefits credited to participant's book
account plus or minus subsequent investment
gains or losses, but less any Federal or
state income taxes required to be withheld, -
shall be distributed to . him in any one or
more of the following ways:
7.4(a) In a lump sum.
7.4 (b) . In monthly, quarterly, semi-annual, or
annual installments or substantially
equal payments over a period not to
exceed seven (7) years from date
distribution began, but no payment
shall have a value of less than (the
smaller. of) $50 or the balance credit
to :.he participant's book account.
7.4 (c) Postpone payments under , .4 (a) and (b) .
above until participant reaches his
50th, 55th, 60th, or 65th birthday.
The employee shall elect the method of
distribution at the time of signing each
Participation Agreement. The employer shall
make distribution by any of the foregoing
methods or-combinations thereof. Participant'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 Sections
7.4(a) and 7.4(b) will commence on the first day
of the second month following termination of
employment. Payment of benefits under Section
7.4(c) will commence on the first day of the
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month following the participant's birthday.
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DEFERRED COMPENSATION. PLAN - Page 8 .
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• 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 boor, account,
less any Federal or State Withholding
Taxes required by law, shill be distributed
to his beneficiaries in the manner
designated in the participant's Participation
Agreement. -The employer shall make payment
in a lump sum within 90 days after
notification of death of the participant,
. in compliance with any State. laws governing
the payments of death benefits.
7.6 Financial Catastrophe - In the event of a
financial catastrophe affecting a participant
where the withdrawal of funds would be
necessary to prevent great hardship to the
participant and the amount of withdrawal
• requested by • the participant is only the
amount necessary to meet that financial
catastrophe, and is not reimbursed by
insurance, a participant may aL p1y to the
Committee for withdrawal of such amount
from the Plan prior to retirement or to
termination of participant's employment
with the City..
Examples of such need under the foregoing
criteria may be catastrophic illness, flood,
fire, earthquake, death in the family, or
disablins injury, and examples of similar
import. Withdrawals for expenditures normLilly
budgetable, such as down payment on a hom or
purchase of an automobile, or college e:.pnse "•,
will not be permitted. Any amount so a p,froved
hereunder for withdrawal shall be paid to
participant in a lump sum. The withdrawal
shall be effective at the later of the dates
specified i_n the participant's application
or the date approved by the Committee.
. 7 .7 Other _Distributions - Notwithstanding any
other provisions of the Plan, the employer
may change the timo or methods of benefit.
payments pursuant to this Plan.
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DEFERRED COMPENSATION PLAN - Page 9
SECTION 8. EMPLOYER PARTICIPATION: Notwithstanding any other
provisions of this Plan, the employer may make
additional deposits in the deferred compensation
fund as additional compensation 'for the services
rendered by the employee to the employer during an
employment 1Jerio , provided the employee has
% elected to have such additional compensation
deferred, invested, and distributed, pursuant to
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this Plan, prior to the employment period in which
the. compensation will be earned.
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SECTION 9. NONASSIC''.LILITY : Subject to Section 10 , to the
fullest t 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 otherwise, in anv manner and
no right or interest of a participant in the
employer's contractual obligation shall be liable
for or subject to any obligation or liability of
such participant.
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SECTION 10. FACILITY OF PAYM.= • If any participant
terminates his employment, or dies or retires, with
an unpaid debt dwing to the employer, and neglects
or refuses to liquidate the .debt by any other. means
when due and upon demand, the employer shall_ be
entitled to collect the amounts due from the
deferred compensation owed to the participant under
the Plan.
SECTION 11. I iI SCELL� .' EOt S :
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11.1 Status of Participa nts - Neither the
establisient. of the Plan nor anv modification
thereof, nor the establishment of any book
account, nor the payment of any benefits,
shall be construed as giving to any
participant or other person any legal or
equitable right against the employer except
• as herein provided; and, in no event, shall
the terms of employment of any employee or
participant be modified or in any way affected
hereby.
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DEFERRED COMPENSATION PLAN - Page 10
SECTION 11.2 Condition of Plan -- .I 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 payment of any benefit to which he is
entitled under the Plan.
11.3 Govc ~.__n Law - This Plan shall be construed,
administered and enforced according to the
laws of the State of California.
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11.4 Designation of Beneficiaries - Each participant
shall have the right, by written notice to the
employer, to designate beneficiaries to receive
any benefit to which said participant may be 1
. entitled in the event of his death prior to the
complete distributicn of benefits. If no such
desigr.e t.ion is in effect on a participant's
death, his beneficiary shall be his estate or
if no e:•.ecuto or ads in tra toz is appo i n _ed
within six (6) months a• cr the pa= l°i t' i
death, the employer shall direct said bencf:; ti:s
beneficiary or beneficiaries
to be ri a iu to the .� iici�.
dc_si t 'd in his . last will, or if there be
no will, then to the heirs at law of the
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SECTION 12. AME DML :`i' ::D TERMINATIO:' .
12.1 The us:ployer may at any time and from tills to ,
time r'.odify, amend, or terminate the Plan in
whole or in part (including retroecti.ve
• amend: :tints) or cease deferring compensation
pursuant to the Plan, by deliver-Mg to each
parti c i naft a written copy of such mod i _ l.ce
ainend::.ent, or termination or of a notice that
it cee.scs deferring compensation; provided,
however, the employer shall not have the right
• to rc uce or affect the value of any
participant's book account or any rights
accru edi under the Plan prior to such
modification, amondslent, termination or
cessation.
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DEFERRED COnPENSAT ION PLAN - Page 11
SECTION 12.2 In the event of the termination of the Plan
by the employer under Section 12.1, the
value of all participant's boo): accounts
shall be distributed to the participants or
their beneficiaries in lump surqs on the
sixtieth day after termination of the Plan.
SECTION 13. EMPLOYER NOT RESPOISIRLE : The employer may, but
is not recruired to, invest funds . held pursuant to
agreements between participants and the employer •
in accordance with the requests made by each
participant at the time of enrollment or change
in enrollment, prospectively only. The employer
shall retain the right to approve or disapprove
such investment requests. Any action by the
employer in investing funds, or approving of any
such investment of funds, shall not he considered
to be either an endorsement or guarantee of any
• investment, nor shall it be considercd to attest
to the financial soundness or the su t,-3bility of
any investment for the purpose of mc'e ti nc: future .
obligations as provided in Section 7 of this
Plan.
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