HomeMy WebLinkAboutResolution No. 3725 RESOLUTION NO. 3725
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF DOWNEY AMENDING THE DEFERRED
COMPENSATION PLAN OF THE CITY AND ADOPTING
SUCH PLAN AS AMENDED
WHEREAS, the City Council of the City of Downey is informed that
the Deferred Compensation Plan of the City should be amended to conform
with changes in the Federal law; and
WHEREAS, there has been presented to the City Council the proposed
Deferred Compensation Plan as so amended.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES RESOLVE
AS FOLLOWS:
SECTION 1. That the City of Downey, California, Deferred Compensa-
tion Plan, having been amended pursuant to Section 11.1 of said Plan and
restated in full, a copy of which is attached hereto, hereby is approved.
The Mayor is authorized to execute the same on behalf of the City.
SECTION 2. The Administrative Committee of the Deferred Compensa-
tion Plan shall arrange for a written copy of changes to said Plan, as
amended, to be delivered to each Plan Participant who is enrolled as of
this date.
SECTION 3. The City Clerk shall certify to the adoption of this
Resolution.
APPROVED AND ADOPTED this 9 th day of October, 1979.
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7
'enneth J. 1er, Mayor
ATTEST:
ity Clerk
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by
the City Council of the City of Downey at a regular meeting thereof held
on the 9th day of October, 1979, by the following vote, to wit:
AYES: 5 Council Members: Mackaig, Jackman, Swearingen, Greene, Miller
NOES: 0 Council Members: None
ABSENT: 0 Council Members: None
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City Clerk
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SECTION 1. NAME:
The name of this Plan is the City of Downey,
California, Deferred Compensation Plan
(hereinafter referred to as the "Plan ") .
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
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 Section
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
meanings.
3.1 "Employer" shall mean the City of
Downey, California.
3.2 "Employee" shall mean all officers and
full -time employees of the City of Downey.
3.3 "Participant" shall mean an employee who
has elected to participate in the Plan.
"Participant" excludes any person who
does not perform services for the City of
Downey.
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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.
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 hired in mid - period shall be the
period beginning with the date of employ-
ment and ending on December 31.
3.7 "Deferred Compensation" shall mean the
amount of compensation not yet earned,
which the Participant and the Employer
mutually agree shall be deferred in
accordance with the provisions of this
Plan.
3.8 "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.
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3.9 "Normal Retirement" shall mean a retire-
-- ment from service with the Employer which
becomes effective on the first day of the
calendar month after the Participant
meets the age and service requirements
for normal retirement specified in the
Public Employees Retirement System.
3.10 "Early Retirement" shall mean a retirement
from service with the Employer which
becomes effective on the first day of the
calendar month after the.Participant
meets the age requirements for Early
Retirement specified in the Public
Employees Retirement System.
3.11 "Late Retirement" shall mean a retirement
from service with the Employer which
becomes effective after the Participant
has exceeded the normal retirement age as
specified in the Public Employees Retire-
ment System.
3.12 "Termination of Employment" shall mean
the severance of the Participant's
employment it
with the Employer for reasons
other than those specified in Sections
3.8 through 3.11 above.
3.13 "Committee" shall consist of such
employees as shall be established by
Administrative Regulations.
SECTION 4. PARTICIPATION
4.1 Each Employee may elect to become a
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Participant of the Plan and defer payment
of part of his Compensation by executing
a written Participation Agreement.
A Participation Agreement must be
executed and filed no later than thirty
(30') days prior to the first day of the
calendar month of the first deferral, in
which case it shall be effective for that
part of the Employment Period following its
execution and filing. For all employees on
the payroll on the effective date of the
Plan, the election must be made within sixty
(60) days of the effective date of the Plan,
for the first employment period.
The Participation Agreement shall
continue from year to year and remain in
full force and effect unless terminated
as provided in Section 4.3 below.
4.2 At the time of any agreement hereunder, a
Participant must agree to defer a minimum
amount of $5.00 per bi- weekly pay period.
4.3 Additional agreements with respect to Com-
pensation not yet earned may be executed
more than thirty (30) days prior to
the first day of any succeeding calendar
month, to become effective during such
subsequent month.
4.4 A Participant may terminate his participa-
tion in the Plan and thereby terminate
further deferral of his Compensation by
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filing with the Employer an executed
written notice of termination at least
thirty (30) days prior to effective date
of termination. Once terminated, a former
Participant cannot rejoin the Plan during
the calendar month in which termination
occurred; however, he may elect to become
a Participant in subsequent calendar
months. No amounts shall be payable to
an Employee upon terminating his partici-
pation in the Plan unles's otherwise due
pursuant to Section 10.
SECTION 5. DEFERRAL OF COMPENSATION:
5.1 During each Employment Year in which the
Employee is a Participant in the Plan,
the Employer shall not pay the Employee
his full Compensation, but 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.
5.2 The maximum Compensation that may be
deferred (except as provided in Section
5.3) for any taxable year shall be the
lesser of:
(A) $7,500.00, or
(B) 33 -1/3 per cent (%) of the Partici-
pant's Compensation which is . cur-
rently includible in Participant's
gross income for federal income tax
purposes.
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5.3 Notwithstanding the provisions of Section
5.2, for one (1) or more of a Partici-
pant's last three (3) consecutive years
ending before the Participant attains
Normal Retirement Age, the maximum Com-
pensation that may be deferred for each
such year shall be the lesser or:
(A) $15,000.00, or
(B) the sum of
(i) the Plan limitation
established for purposes of
Section 5.2 for the taxable year
(determined without regard to
this section,) PLUS
(ii) so much of the Plan limitation
established for purposes of
Section 5.2 for taxable years
before the current taxable year
as has not previously been used
under Section 5.2.
SECTION 6. ADMINISTRATION OF THE PLAN:
6.1 The Plan shall be administered by the
Committee who shall have the sole author-
ity 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 determin-
ations shall be conclusive and binding on
all persons.
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6.2 The Employer may 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 estab-
lished for each Participant, showing all
amounts of Deferred Compensation, invest-
ments 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.
6.3 On executing the Participation Agreement,
the Employee shall designate his invest-
ment objective, prospectively only. The
Employer is not required to invest any
amount it may receive, but 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
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 distributions may be
reinvested 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 local
savings and loan or banking institutions
is selected as the investment vehicle,
interest earnings will be declared by the
institution. Annual valuation may
include all interest earned, whether paid
or accrued.
6.3(c) If investments are selected, dividend
and interest earnings may be credited to
the City of Downey, California, Deferred
Compensation Plan Investment Account with
the stockbroker.
The market value of any investments and
cash in the account shall be determined
on December 31st of each year and each
Participant's share of the account shall
be valued by any cash income, plus or
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minus any market action. New Participants
may join the account after existing
Participants' values are determined.
6.3(d) If a variable annuity contract is
selected as the investment vehicle, the
value of Participant's individual account
during the employment period may be
determined by the insurance company's
accumulation unit, which is a statistical
index of the net investment results of
the variable contract account. At retire-
ment, the amount of annuity payments shall
be determined by the insurance company's
last annuity unit, which is a statistical
index of the net investment results of
the variable contract account.
6.4 The employer may, but is not required to,
invest Deferred Compensation at least
monthly in the investment vehicles pro-
vided for in this Plan. All amounts of
Compensation deferred under the Plan, all
property and rights purchased with such
amounts, and all income attributable to
such amounts, property, or rights, shall
remain (until made available to the Par-
-. ticipant or other beneficiary) solely the
property and rights of the Employer (with-
out being restricted to the provision of
benefits under the Plan) subject only to
the claims of the Employer's general
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creditors. The Employer shall have the
sole right to vote any shares of stock
which it may acquire by investment.
6.5 Neither this Plan nor any Participation
Agreement nor any book account shall be
deemed to create a trust or custodian
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 Agree-
ment or book account, any secured or
• preferred interest in or to any assets
of the Employer.
The Employer shall have only a con-
tractual obligation to pay the benefits
due the Participant under the Plan.
SECTION 7. DISTRIBUTION OF BENEFITS
7.1 Election - Each participating Employee
must elect, prior to the earliest dis-
tribution date provided under this sec-
tion, 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. Subject to the provision of
the preceding sentence, each participat-
ing Employee may alter his election by
executing an additional Participation
Agreement. Said altered election shall
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apply to all benefits currently and
subsequently credited to Participants'
book account, unless subsequent altering
elections are made by the Participant.
7.2 Retirement - In event of retirement, the
full benefits credited to Participant's
book account, plus or minus any subsequent
investment gains or losses, but less any
Federal or State Income Taxes required to
be withheld, may 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 period not to
exceed ten (10) years from date distri-
bution began, or over a period established
by the Employer not greater than the life
expectancy of the participant. Life
expectancy shall be determined once by
the Employer, on the date of the initial
installment distribution. Installment
distributions will be made in substan-
tially equal payments, but no 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
may continue to be invested until - in
the Employer's sole judgment - cash is to
be withdrawn for payment of benefits.
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Payment of benefits will commence on the
first day of the second month following
Termination of Employment.
7.3 Disability In event of Termination of
Employment by reason of Disability,
distribution of benefits will be as
provided in Section 7.2.
7.4 Other Termination - In event of Termina-
tion of Employment by reason other than
those specified in Sections 7.2 and 7.3,
then the full benefits credited to Par-
ticipant's book account plus or minus any
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 a monthly, quarterly, semi - annual,
or annual installments or substantially
equal payments over a period not to
exceed seven (7) years from date distri-
bution began, but no payment shall have a
value of less than (the smaller of) $50
or the balance credit to the Participant's
book account.
7.4(c) Postpone payments under 7.4(a) and (b)
above until Participant reaches his 50th,
55th, 60th or 65th birthday.
The Employee shall elect the method
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of distribution at the time of signing
each Participation Agreement. The Employer
shall make distribution by ahy of the
foregoing methods or combinations thereof.
Participant's book account balances may
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 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 month following the Partici-
pant's birthday.
7.5 Death - In the event of the death of any
Participant, either before or after
Termination of Employment, then the full
benefits credited to his book account,
less any Federal or State Withholding
Taxes required by law, shall be distri-
buted to his beneficiaries in the manner
designated in the Participant's Participa-
tion Agreement. The Employer shall
make payment in a lump sum within ninety
(90) days after notification of death of
the Participant, in compliance with any
State laws governing the payments of death
benefits.
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7.6 Unforeseeable Emergency - In the event of
an unforeseeable emergency affecting a
Participant where the withdrawal of funds
would be necessary to prevent extreme
hardship to the Participant and the amount
of-withdrawal requested by the Participant
is only the amount necessary to meet that
unforeseeable emergency, and is not reim-
bursed by insurance, a Participant may
apply to the Committee for withdrawal of
such amount from the Plan prior to retire-
ment 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 Participant's family, or disabling
injury, and examples of similar import.
Withdrawals for expenditures normally
budgetable, such as down payment on a
home or purchase of an automobile, or
college expenses, will not be permitted.
Any amount so approved hereunder for
withdrawal shall be paid to the Participant
in a lump sum. The withdrawal shall be
effective at the later of the dates
specified in the Participant's application
or the date approved by the Committee.
Determination of unforeseeable emer-
gency shall be governed by such regula-
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tions as are prescribed from time to time
by the Secretary of the Treasury.
SECTION 8,. EMPLOYER PARTICIPATION
Within the limitations of Sections 5.2 and
5.3, 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
period, provided the Employee has elected to
have such additional Compensation deferred,
and distributed, pursuant to this Plan, prior
to the employment period in which the Compensa-
tion will be earned. In no event shall the
limitations set forth in Sections 5.2 and 5.3
be exceeded.
SECTION 9. NON- ASSIGNABILITY CLAUSE
It is agreed that neither the Participant nor
his beneficiary, nor any other designee, shall
have any right to commute, sell, assign,
transfer, or otherwise convey the right to
receive any payments hereunder, which payments
and right thereto are expressly declared to be
non- assignable and non - transferable and in the
event of any attempted assignment or transfer,
the Employer shall have no further liability
hereunder, nor shall any payments be subject
to attachment, garnishment or execution, or be
transferable by operation of law in event of
bankruptcy, insolvency, except to the extent
otherwise provided by law, notwithstanding the
above clause.
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SECTION 10. MISCELLANEOUS
10.1 Status of Participants - Neither the
establishment of the Plan nor any modifi-
cation 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.
10.2 Condition of Plan - I t is a condition of
this Plan, and each Employee by partici-
pating 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.
10.3 Governing Law - This Plan shall be
construed, administered and enforced
according to the laws of the State of
California, and according to the provisions
of the Internal Revenue Code. This Plan
shall be construed so as to conform to the
requirements of Internal Revenue Code
Section 457.
10.4 Designation of Beneficiaries - Each Par-
ticipant shall have the right, by written
notice to the Employer, to designate
beneficiaries to receive any benefit to
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which said Participant may be entitled in
the event of his death prior to the
complete distribution of benefits. If no
such designation is in effect on a
Participant's death, his beneficiary
shall be his estate or if no executor or
administrator is appointed within six (6)
months after the Participant's death, the
Employer shall direct said benefits to be
paid to the beneficiary or beneficiaries
designated in his last will, or if there
be no will, then to the heirs at law of
the Participant.
SECTION 11. AMENDMENT AND TERMINATION
11.1 The Employer may at any time and from
time to time modify, amend, or terminate
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
termination, or of a notice that it
ceased deferring Compensation; provided,
however, the Employer shall 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.
11.2 In the event of the termination of the
Plan by the Employer under Section 11.1,
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the Employer shall cease all deferrals of
Compensation, but payments shall be made
pursuant to the applicable provisions of
Section 7 of the Plan and the irrevocable
election of the various Participation
Agreements then in effect.
11.3 No amendment shall affect the rights of
the Participants or their beneficiaries
to the receipt of payment of benefits, to
the extent of any Compensation deferred
at the time of the amendment as adjusted
for investment experience hereunder prior
to and subsequent to the amendment.
SECTION 12. EMPLOYER NOT RESPONSIBLE
• 12.1 The Employer may, but is not required 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, shall not be considered
to be either an endorsement or guarantee
of any investment, nor shall it be
considered to attest to *the financial
soundness or the suitability of any
investment for the purpose of meeting
future obligations as provided in Section
7 of this Plan.
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The Employer hereby establishes this Deferred Com-
pensation Plan on the terms and conditions set forth herein.
7 1/147 )
ATTEST: CITY OF DOWNEY, CALIFORNIA La"
CITY CLE1
BY: � %�r/�r, // DATE: October 9, 1979
KENNETH J ' ILL ', Mayor
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