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Home My WebLink AboutResolution No. 14-7526 - Incorporate Reso No. 07-7031, Retirement Services (PARS) Alternate Retirement System PlanRESOLUTION NO. 14 -7526 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY AMENDING AND RESTATING THE CITY OF DOWNEY PUBLIC AGENCY RETIREMENT SERVICES (PARS) ALTERNATE RETIREMENT SYSTEM PLAN WHEREAS, the City of Downey implemented an alternate retirement system plan in compliance with the Omnibus Budget Reconciliation Act of 1990 (OBRA 1990) in January 1992 for employees who are not eligible for the California Public Employees' Retirement System; and, WHEREAS, the City of Downey approved and adopted Resolution No. 07 -7031 implementing an alternate retirement system plan with Public Agency Retirement Services (PARS) effective January 1, 2008 for temporary part-time employees and that from time to time, the plan document has been amended and restated for updates with current legislation; and, WHEREAS, it is determined that in accordance with the Internal Revenue Service (IRS) regulations, appropriate enrollment of a council member in Social Security or an alternate plan is required; and, WHEREAS, the City of Downey does not contract with Social Security and the alternate retirement plan option available is the PARS Plan; and, WHEREAS, a City council member does not meet the common law definition of "employee" and that enrollment in the PARS Plan is required in accordance with IRS regulations; and, WHEREAS, the City of Downey alternate retirement system plan (PARS Plan) is hereby amended and restated to include eligibility for enrollment of a City council member as required by IRS regulations in accordance with the City's issuance of Form W -2 for the payment of reimbursed expenditures; and, WHEREAS, the City Council in accordance with Resolution No. 07 -7031 desires to authorize the City Manager to direct the Finance Director (appointed Plan Administrator) to take all steps relative to the implementation of the PARS Plan, including execution and any revisions to the Plan document on behalf of the City, along with any future amendments to the Plan document for the administration of the OBRA 1990. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The City of Downey PARS Plan document is hereby amended and restated and incorporated as Exhibit A, attached hereto, and by this reference, is hereby adopted. RESOLUTION NO. 14 -7526 PAGE 2 SECTION 2. This Resolution incorporates previously adopted Resolution No. 07- 7031 to establish the City of Downey PARS Plan. APPROVED AND ADOPTED this 25 day of November, D FE DQ AS F ATTEST: �U 10A/� - ARIA M. JIMENE4 , CMC City Clerk 1 HEREBY CERTIFY that the foregoing Resolution was adopted by the City Council of the City of Downey at a regular meeting held on the 25th day of November, 2014, by the following vote, to wit: AYES: Council Members: Guerra, Saab, Marquez, Vasquez NOES: Council Member: None. ABSENT: Council Member: Brossmer. ABSTAIN: Council Member: None. ADRIA M. JIMENEZ, CMC City Clerk THE CITY OF DOWNEY PUBLIC AGENCY RETIREMENT SYSTEM ALTERNATE RETIREMENT SYSTEM (PARS -ARS) AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2008 TABLE OF CONTENTS INTRODUCTION....................................... ............................... DEFINITIONS ............................................ ............................... ELIGIBILITY REQUIREMENTS FOR PARTICIPATION .... 2.1 Time of Participation ....................... ............................... 2.2 Termination of Participation ........... ............................... 2.3 Effect of Transfer to Ineligible Employment ................. 2.4 In Service Distributions ................... ............................... CONTRIBUTIONS..................................... ............................... 3.1 Amount of Employer Contributions ............................... 3.2 Amount of Employee Contributions .............................. 3.3 Administrative Expenses ................. ............................... 3.4 Allocation of Administrative Expenses ......................... 3.5 Limits on Annual Additions ............ ............................... 3.6 Vesting ............................................ ............................... 3.7 Investment in Accordance With Act .............................. 3.8 Reversions ...................................... ............................... FUNDING AND VALUATION ................. ............................... d' Page ................................. I................... 9 2 ...................... ............................... ......................... 3 9 7 ...................... ............................... ........................ 10 ........................ 7 ...................... ............................... 10 ........................ 7 ...................... ............................... ........................ ........................ 7 ...................... ............................... ........................ ...................... ............................... .........I 7 12 8 ...................... ............................... ........................ ...................... ............................... 8 12 ........................ 8 ...................... ............................... 13 ........................ ...................... ............................... ........................ 8 ...................... ............................... 9 9 ...................... ............................... ...................... ............................... 9 4.1 Fun mg ................................................................... ............................... 4.2 Valuation ................................................................. ............................... 4.3 Type and Nature of Plan and Trust ......................... ............................... VESTING........................................................................... ............................... 5.1 Vesting in Employer Contribution Account ........... ............................... 5.2 Vesting in Employee Contribution Account ........... ............................... 5.3 Full or Partial Termination ...................................... ............................... DISTRIBUTION OF BENEFITS ....................................... ............................... 6.1 Incidental Death Benefits ........................................ ............................... 6.2 Amount of Distribution ........................................... ............................... 6.3 Lump Sum Distributions ......................................... ............................... 6.4 Time of Distribution ................................................ ............................... 6.5 Participant's Rights Not Subject To Execution ....... ............................... 0MM_US:4790870.4 _i_ 9 ......................... ......................... 9 10 ....................... ........................ 10 ........................ 10 10 ........................ 10 ........................ ........................ 11 11 ........................ ........................ 11 .........I .............. 12 12 ........................ ........................ 12 12 ........................ 13 ........................ ........................ 13 TABLE OF CONTENTS (continued) 6.6 Unclaimed Benefits .............. ............................... 6.7 Direct Rollovers ................... ............................... 6.8 Military Ser vice .................... ............................... DEATH BENEFITS ......................... ............................... 7.1 Designation of Beneficiary .. ............................... 7.2 Married Participant ............... ............................... 7.3 Spouse's Signature ................ ............................... 7.4 Default Beneficiary .............. ............................... 7.5 Domestic Partners ................ ............................... ADMINISTRATION AND AMENDMENT OF PLAN 8.1 Designation of Plan Administrator ...................... 8.2 Rules and Regulations .......... ............................... R 2 dmanrlmPn4 and TArm in atinn OMM US:4790870.4 ]s Page ............ 13 ............ 13 ............ 15 ............ 16 ............ 16 ............ 16 ............ 16 ............ 16 ............ 16 ............ 18 ............ 18 ............ 18 ............ 18 ............ 19 ............ 19 ............ 19 ............ 20 INTRODUCTION The City of Downey (the 'Employer ") has adopted this tax qualified governmental profit sharing plan for the benefit of its Eligible Employees. This document is a full and complete amendment and restatement of the City of Downey PARS Alternate Retirement System Plan. It is intended that this Plan and the Trust established to hold the assets of the Plan shall be qualified under Section 401(a) and tax - exempt under Section 501(a) of the Internal Revenue Code of 1986, together with any amendments thereto ( "Code "). It is also intended that this Plan and the Trust established hereunder shall meet the requirements of a governmental plan under Section 414(d) of the Internal Revenue Code and of a pension trust under California Government Code Sections 53215 - 53224, or their successor Sections ( "Act "). At any time prior to the satisfaction of all liabilities with respect to Participants and their Beneficiaries under the Trust created pursuant to this Plan, the Trust assets shall not be used for, or diverted to, purposes other than the exclusive benefit of Participants or their Beneficiaries, as prescribed in Section 401(a)(2) of the Code. It is intended that the Plan satisfy the requirements of the applicable provisions of the Uruguay Round Agreements Act, the Small Business Job Protection Act, the Taxpayer Relief Act of 1997 and the Uniformed Service Employment and Reemployment Rights Act of 1994 (commonly referred to as the "GUST" amendments) and that the provisions of this restated Plan reflecting the GUST amendments are hereby made effective as of the dates required by the legislation referred to in this sentence. It is further intended that the Plan satisfy the requirements of the applicable provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 and the related requirements of the revisions to Section 401(a)(9) of the Code (commonly referred to as 'EGTRRA ") and that the provisions of this restated Plan reflecting EGTRRA are hereby made effective as of the dates required by the legislation referred to in this sentence. It is further intended that the Plan satisfy the requirements of the applicable provisions of legislation enacted subsequent to EGTRRA, including the Pension Protection Act of 2006 (commonly referred to as the "PPA ") and the Heroes Earnings Assistance and Relief Tax Act of 2008 (commonly referred to as the "HEART Act ") and that the provisions of this restated Plan reflecting such subsequent legislation (including the PPA and the HEART Act) are hereby made effective as of the dates required by the legislation referred to in this sentence. 2 NM 790870.2 ARTICLE I DEFINITIONS 1.1 "Account" means, with respect to each Participant, the value of all accounts maintained on behalf of the Participant. 1.2 "Act" means California Government Code Sections 53215 - 53224. 1.3 "Aggregate Account" means, with respect to each Participant, the value of all accounts maintained on behalf of the Participant, whether attributable to Employer or Employee contributions. 1.4 "Amended Effective Date" means January 1, 2008. 1.5 "Beneficiary" means the person, trust or other entity to whom a share of a deceased Participant's Aggregate Account is payable. 1.6 "Code" means the Internal Revenue Code of 1986 as amended from time to time. 1.7 "Compensation" means all compensation for that portion of the Plan Year during which the Employee was a Participant, paid in cash by the Employer to the Participant for personal services. Further, the Employer as defined in Section 1.13 hereof, defines compensation as "Gross Wages" defined as all remuneration to a Participant by the Employer that is reportable on Form W -2, together with any amounts contributed to an individual annuity contract under Section 403(b) of the Code or deferred under an eligible deferred compensation plan under Section 457 of the Code or contributed to a cafeteria plan under Section 125 of the Code or paid as a qualified transportation fringe under Section 132(f)(4) of the Code.) The annual compensation of each Participant, as defined above by the Employer, taken into account in determining allocations for any Plan Year beginning after December 31, 2001 shall not exceed $200,000, as adjusted for cost -of- living increases in accordance with Section 401(a)(17)(B) of the Code. For any short Plan Year, the Compensation limit shall be an amount equal to the Compensation limit for the calendar year in which the Plan Year begins multiplied by a ratio obtained by dividing the number of full months in the short Plan Year by twelve (12). The limitation on the maximum amount of Compensation that may be taken into account under the Plan shall not apply to any Participant eligible for a higher limit on annual compensation under the transition rule described in Section 1.401(a)(17)- I(d)(4)(ii) of the Treasury Regulations. 1.8 "Council members" means those elected Council members who are not active City of Downey PERS members. NBI:790870.2 1.9 "Effective Date" means January 1, 1992. j 1.10 "Eligible Class of Employees" means the eligible class of employees as provided herein and in the applicable governing board policies and regulations promulgated thereunder by the Employer. 1.11 "Eligible Employee" means all of those Employees of the Employer whose Participation in this Plan are not prohibited or restricted by the provisions of a collective bargaining agreement or another plan or retirement system maintained by the Employer. Employees who are exempt from coverage under Social Security by federal law or regulation shall not be Eligible Employees. 1.12 "Employee" means an employee of the Employer. 1.13 "Employee Contribution Account" means the account by that name established pursuant to Section 3.2 hereof. 1.14 "Employer" means the City of Downey that has adopted this Plan. 1.15 "Employer Contribution Account" means the account by that name established pursuant to Section 3.1 hereof. 1.16 "Inactive Participant" means a Participant who is no longer eligible to participate because he is no longer in a class of Employees eligible to participate in this Plan but is still employed by the Employer. I 1.17 "Ineligible Employee" means all of those Employees of the Employer whose participation in this Plan is prohibited or restricted by the provisions of a collective bargaining agreement, another plan or retirement system maintained by the Employer, or exempt from coverage under Social Security by federal law or regulation. 1.18 "Investment Manager" means the entity appointed by the Employer as the investment manager under the Plan. 1.19 "Limitation Year" means the limitation year under Section 3.5 hereof and shall mean the Plan Year. 1.20 "Normal Retirement Age" means sixty -five (65) years of age. 1.21 "Normal Retirement Date" means the first day of the month coincident with or next following the date on which the Participant attains Normal Retirement Age. 1.22 "Participant" means a Participant under Article II hereof. 1.23 "Participant Aggregate Accounts" means the accounts by that name established pursuant to Article III hereof. 4 NB1:790870.2 1.24 "Participant Contributions" means contributions made on behalf of the Participant by the Employer as Pick Up Contributions. 1.25 "Participant Contribution Account" means the value of the Participant's interest in this Plan that is attributable to Pick Up Contributions and /or Participant after tax contributions. 1.26 "PERS" means the California Public Employees' Retirement System 1.27 "Pick Up Contributions" means Participant contributions made by the Employer on behalf of the Participant pursuant to Section 414(h) of the Internal Revenue Code. Pick Up Contributions shall not under any circumstances be paid to the Participant or be directed by the Participant for any propose except as Pick Up Contributions to this Plan. The Employer may make Pick Up Contributions through a reduction in salary, an offset against future salary increases, or a combination of the two. 1.28 "Plan" means the City of Downey PARS Alternate Retirement System. 1.29 "Plan Administrator" means the individual or position designated by the Employer to act on behalf of the Employer in matters relating to this Plan. If no designation is made, the Employer shall be the Plan Administrator. If a Plan Administrator has been appointed, the word "Employer" as used in this Plan shall mean Plan Administrator unless the context indicates a different meaning is intended. 1.30 "Plan Year" means the consecutive twelve month period beginning on January I and ending on December 31. 1.31 "Public Agency" means an employer authorized under California Government Code Article 1.5, Sections 53215 through 53224 to establish a pension trust. 1.32 "Regulations" means the regulations adopted or proposed by the Department of Treasury from time to time pursuant to the Code. 1.33 "Retirement System" means any plan that meets the requirements for a retirement system under Section 3121(b)(7)(F) of the Code and the final regulations thereunder. 1.34 "Social Security" means the Social Security program as set forth in Title 42 of the United States Code, Section 301 et seq. 1.35 "STRS" means the California State Teachers' Retirement System. 1.36 "Trust" means the trust established as part of the Public Agency Retirement Trust to hold the assets of the Plan. 1.37 "Trustee" means the trustee of the Trust. Nn1:790570.2 i_ 1.38 "Valuation Date" means the last day of the Plan Year or such other day on which the assets of the Trust are valued and the value of each Participant's Aggregate Account is determined. 1.39 "Vested" means the nonforfeitable portion of any Account maintained on behalf of a Participant. NBI:7908M2 ARTICLE II ELIGIBILITY REQUIREMENTS FOR PARTICIPATION 2.1 Time of Participation An Eligible Employee shall participate in this Plan on each day during which the Employee is not accruing a benefit under Social Security or another Retirement System provided and maintained by the Employer. 2.2 Termination of Participation A Participant shall cease to be a Participant on the date on which the Participant begins to participate in another Retirement System or the date of his or her termination of employment as determined by the Employer. 2.3 Effect of Transfer to Ineligible Employment If a Participant is no longer an Eligible Employee and becomes an Ineligible Employee, such Employee will participate immediately upon returning to the Eligible Class of Employees. Such participation shall commence as of the first day of such eligible employment. 2.4 In Service Distributions A Participant who is no longer eligible to participate because he is no longer in the class of Eligible Employees, but who has not terminated employment with the Employer, shall become an Inactive Participant and shall remain such for twenty -four (24) months after which his interest in the Plan will be distributed to him. NBI:7908702 ARTICLE III CONTRIBUTIONS 3.1 Amount of Employer Contributions There is hereby created and established and shall be maintained by the Plan Administrator the Employer Contribution Account. For each day that an Employee remains a Participant under this Plan, the Employer shall make contributions pursuant to one of the following tiers: Tier I The Employer shall make a contribution of two and one -half percent (2.5 %) of Compensation for all Participants with the exception of elected Council members. Tier II Effective January 1, 2014, for all Participants classified by the Employer as elected Council members, the Employer shall make a contribution of zero percent (0 %) of Compensation. Such contributions for Tier I and Tier II shall be made no later than the close of the Plan Year. This amount shall be credited to the Employer Contribution Account. Employer Contributions will be allocated to each Participant in the ratio that such Participant's compensation bears to the compensation of all Participants. 3.2 Amount of Employee Contributions There is hereby created and established and shall be maintained by the Plan Administrator the Employee Contribution Account. For each day that an Employee remains a Participant under this Plan, the Employee shall make a contribution pursuant to one of the following tiers: Tier I The Employee shall make a contribution of five percent (5 %) of Compensation for all Participants with the exception of elected Council members. Tier II Effective January 1, 2014, elected Council members shall make a contribution of seven and one -half percent (7.5 %) of Compensation. Such contributions for Tier I and Tier 1I shall be credited to the Employee Contribution Account. In accordance with Section 414(h) of the Code and Sections 1.24 and 1.27 of this Plan, the contributions required under this Section 3.2 shall be Pick Up Contributions. 3.3 Administrative Expenses In accordance with Section 53217 of the Act the Employer may make contributions to the Trust sufficient to defray all or part of the expenses of administering the Plan or may pay such expenses directly. 8 Nn1:790870 2 3.4 Allocation of Administrative Expenses If the Employer chooses not to pay the expenses of administering this Plan, such expenses shall be charged ratably against the Participants' Aggregate Accounts. 3.5 Limits on Annual Additions Annual additions credited to a Participant's Account during a limitation year shall not exceed the lesser of $40,000 (adjusted as permitted by Section 415(d) of the Code and Regulations issued thereunder) or 100 percent of Section 415 Compensation (provided that such 100 percent limitation shall not apply to any contributions for medical benefits after separation from service, within the meaning of Section 401(h) or Section 419A(0(2) of the Code). This Section 3.5 shall be construed and interpreted in accordance with the provisions of Article IX. 3.6 Vesting A Participant will be filly Vested in his Aggregate Account at all times. If the Plan's vesting schedule is amended or the Plan is amended in any way that directly or indirectly affects the computation of a Participant's nonforfeitable percentage, or if the Plan is deemed amended by an automatic change to or from a top -heavy vesting schedule, each Participant with at least three years of service with the Employer may elect within a reasonable period of time after the adoption of the amendment or change to have his nonforfeitable percentage computed under the Plan without regard to the amendment or change. 3.7 Investment in Accordance With Act All contributions, interest earned, and any assets of the Plan shall at all times be invested and managed in accordance with the requirements of the Act. 3.8 Reversions The Employer shall have the right to a reversion of assets from this Plan if (1) a contribution is conditioned upon the initial qualification of the Plan, a timely determination letter request is filed, and the Plan receives an adverse determination, or (2) the reversion is due to a good faith mistake of fact, or (3) the contribution is conditioned on its deductibility under Section 404 of the Code. Notwithstanding the foregoing, (i) any contribution made by the Employer because of a mistake of fact must be returned to the Employer within one year of the contribution; (ii) in the event the deduction of a contribution made by the Employer is disallowed under Section 404 of the Code, such contribution (to the extent disallowed) must be returned to the Employer within one year of the disallowance of the deduction; and (iii) in the event that the Commissioner of Internal Revenue determines that the Plan is not initially qualified under the Internal Revenue Code, any contribution made incident to that initial qualification by the Employer must be returned to the Employer within one year after the date the initial qualification is denied, but only if the application for the qualification is made by the time prescribed by law for filing the Employer's return for the taxable year in which the Plan is adopted, or such later date as the Secretary of the Treasury may prescribe. NB 1:790870.2 ARTICLE IV FUNDING AND VALUATION 4.1 Funding In accordance with Section 53216 of the Act, the assets of the Plan shall be held in a trust or invested in an insurance contract which may or may not be held in a trust. Subject to Sections 53216.1, 53216.5 and 53216.6 of the Act for the propose of funding this Plan, the Employer shall provide the Trustee or Investment Manager with written direction on how to invest the assets of the Plan. Notwithstanding anything to the contrary contained in the Trust agreement, in -kind contributions shall not be permissible under the Plan. 4.2 Valuation The value of a Participant's Employer Contribution Account and Employee Contribution Account shall be determined annually on a date hereafter referred to as a Valuation Date. As of each Valuation Date there shall be determined the amount of the investment gain or loss to be credited to the total of all assets held for Employer Contribution Accounts and Employee Contribution Accounts during the period since the preceding Valuation Date. The total adjustment shall be allocated among all of the individual Participant and Inactive Participant Accounts as of the current Valuation Date. The assets of the Trust shall be valued annually at fair market value. On the Valuation Date, the earnings and losses of the Trust will be allocated to each Participant and Inactive Participant. 4.3 Type and Nature of Plan and Trust Neither the faith and credit nor the taxing power of the Employer, the State of California or any other political subdivision thereof other than the Employer is pledged to the distribution of benefits hereunder. Except for contributions and other amounts hereunder, no other amounts are pledged to the distribution of benefits hereunder. Distributions of benefits are neither general nor special obligations of the Employer, but are payable solely from contributions, as more fully described herein. No Employee or Beneficiary may compel the exercise of the taxing power by the Employer. Distributions of benefits are not a debt of the Employer, the State of California or any of its political subdivisions within the meaning of any constitutional or statutory limitation or restriction. Distributions are not a legal or equitable pledge, charge, lien or encumbrance, upon any of the Employer's property, or upon any of its income, receipts or revenues, except amounts in the accounts which are, under the terms of this Plan and the Act, set aside for distributions of benefits. Neither the Participants of the legislative body of the Employer nor its officers, employees, agents or volunteers are liable hereunder. Benefits under the Plan may not be assigned or alienated except to the extent allowable under Sections 401(a)(13) and 414(p) of the Code. 10 Nm:790870.2 ARTICLE V VESTING 5.1 Vesting in Employer Contribution Account Each Participant shall be one hundred percent (100 %) Vested in his Employer Contribution Account at all times. 5.2 Vesting in Employee Contribution Account Each Participant shall be one hundred percent (100 %) Vested in his Employee Contribution Account at all times. 5.3 Full or Partial Termination Notwithstanding the vesting schedule in 5.1 and 5.2, upon the complete discontinuance of Employer contributions to the Plan or upon any full or partial termination of the Plan, all amounts credited to the Account of any affected Participant shall become one hundred percent (100 %) Vested and shall not thereafter be subject to forfeiture for any reason. 11 NBI:7908702 ARTICLE VI II DISTRIBUTION OF BENEFITS 6.1 Incidental Death Benefits (a) Distributions from the Plan shall be made in accordance with Section 401(a)(9) of the Code, including the incidental death benefits under Section 401(a)(9)(G) and the regulations thereunder. The required beginning date of benefit payments that represent the entire interest of the Participant shall be as follows: (b) A Participant shall have the option of commencing distributions by April 1 following age 70'/2 or deferring payment until actual retirement. For avoidance of doubt, a Participant is not required to receive a distribution while an Employee (in 2009 or any other year). (c) Time and Manner of Distribution. (i) Required Beginning Date. The Participant's entire interest will be distributed to the Participant no later than the Participant's Required Beginning Date. (ii) Death of Participant Before Distributions Begin. If the Participant dies before distributions begin, the Participant's entire interest will be distributed no later than December 31 of the calendar year immediately following the calendar year in which the Participant died. (iii) Forms of Distribution. The Participant's interest shall be distributed in the form of a single sum on or before the Required Beginning Date. (iv) Required Beginning Date. The April I of the calendar year following the calendar year in which the Participant attains age 70Y2 or, if the Participant opts to defer payment until retirement, the April I of the calendar year following the calendar year in which the Participant actually retires. 6.2 Amount of Distribution A Participant who terminates employment for any reason shall be entitled to one hundred percent (100 %) of the value of his Aggregate Account determined as of the most current Valuation Date. 6.3 Lump Sum Distributions All distributions shall be made in a lump sum payment in cash constituting the entire value of the distributee's Aggregate Account. 12 NM 790870.2 6.4 Time of Distribution Unless otherwise specified herein, benefits shall become distributable to a Participant for the Participant's Beneficiary in any case of the Participant's death) upon any termination of the Participant's employment by reason of resignation, discharge, retirement, disability, or death. This Plan does not provide for mandatory distributions of any amount. Therefore, no distribution is made (regardless of the amount of the distribution) without the consent of the Participant (or the Participant's Beneficiary in any case of the Participant's death). 6.5 Participant's Rights Not Subject To Execution The right of a Participant to a benefit under this Plan is not subject to execution or any other process whatsoever, except to the extent permitted by Section 704.110 of the Code of Civil Procedure of the State of California and is unassignable. 6.6 Unclaimed Benefits Each Participant and Beneficiary of a deceased Participant shall file with the Plan Administrator from time to time in writing, his home address and each change of home address. Any communication shall be addressed to the Participant or the Beneficiary at his last home address filed with the Plan Administrator, or if no such address was filed, then at his last home address as shown on the Employer's records, shall be binding on the Participant or Beneficiary for all purposes of the Plan. The Plan Administrator shall not be obligated to search for or ascertain the whereabouts of any Participant or Beneficiary, and the Participant's Accrued Benefit shall be subject to the abandoned property law of the applicable jurisdiction. 6.7 Direct Rollovers (a) Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Plan, a distributee may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. A distributee includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are distributees with regard to the interest of the spouse or former spouse. (b) Effective for distributions after December 31, 2006, a Beneficiary who is not the spouse of the Participant may elect a direct trustee to trustee transfer that qualifies as an eligible rollover distribution wider this Section 6.7. Such transfer shall be made to an individual retirement plan described in Section 408(a) of the Code or an individual retirement account that is established for the purpose of receiving the distribution on behalf of such Beneficiary. Such individual retirement account shall be deemed an inherited IRA pursuant to the provisions of Section 402(c)(11) of the Code. Also, in this case, the determination of any required minimum distribution under Code Section 401(a)(9) that is ineligible for 13 NB1:79087M rollover shall be made in accordance with Notice 2007 -7, Q &A 17 and 18, 2007 -5 I.R.B. 395. (c) Definitions (i) Eligible Rollover Distribution An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: (i) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated Beneficiary, or for a specified period of ten (10) years or more; (ii) any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; and (iii) any hardship distribution. A portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after -tax employee contributions which are not includible in gross income. However, such portion may be transferred only to (A) an individual retirement account or annuity described in Section 408(a) or (b) of the Code (or, on or after January 1, 2008, to a Roth IRA described in Section 408A of the Code) or a qualified defined contribution plan described in Section 401(a) of the Code; or (B) on or after January 1, 2007, to a qualified defined benefit plan described in Section 401(a) of the Code or to an annuity contract described in Section 403(b) of the Code, that agrees to separately account for amounts so transferred (and earnings thereon), including separately accounting for the portion of the distribution that is includible in gross income and the portion of the distribution that is not so includible. (ii) Eligible Retirement Plan An eligible retirement plan is an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, a qualified plan described in Section 401(a) of the Code that accepts the distributee's eligible rollover distribution, an annuity contract described in Section 403(b) of the Code, a Roth IRA described in Code Section 408A (but only if the distributee satisfies the requirements of Code Section 408A(c)(3)(B)), and an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan. The definition of eligible retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order, as defined in Section 414(p) of the Code. With respect to eligible rollover distributions made on or after January 1, 2008, an eligible retirement plan shall also include a Roth IRA as described in Section 408A of the Code, provided that the distributee is not restricted from making such a rollover from this Plan to a Roth IRA pursuant to Section 408A(c) of the Code. 14 NBI:790870.2 (iii) Direct Rollover A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee. 6.8 Military Service Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code. In addition, the survivors of any Participant who dies on or after January 1, 2007 while performing qualified military service, are entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service) provided under the Plan had the Participant resumed and then terminated employment on account of death. A Participant receiving a "differential wage payment," as defined in Code Section 3401(h)(2) shall be treated as an Employee of the Employer, and the differential wage payment shall be treated as Compensation. 15 NBI:790870.2 ARTICLE VII DEATH BENEFITS 7.1 Designation of Beneficiary Each Participant and Inactive Participant shall have the right to designate a Beneficiary to receive the death benefits that are payable from this Plan. Such designation must be evidenced by a written instrument filed with the Employer on a form prescribed by the Employer and signed by the Participant. 7.2 Married Participant The Beneficiary for a married Participant shall at all times be the Participant's spouse and may not be changed to someone other than such spouse unless the consent of such spouse is provided upon a written form witnessed by a duly authorized Plan representative or a notary public and acceptable to the Employer. If no such designation is on file with the Employer at the time of the death of the Participant, or if for any reason at the sole discretion of the Employer such designation is defective, then the spouse of such Participant shall be conclusively deemed to be the Beneficiary designated to receive such benefit. 7.3 Spouse's Signature The signature of the Participant's spouse shall be required on a designation of beneficiary form if the spouse is not the Beneficiary, unless the Participant declares in writing that one of the following conditions exists: (a) The Participant is not married; (b) The Participant does not know and has taken all reasonable steps to determine the whereabouts of the spouse; (c) The spouse is incapable of executing the acknowledgement because of an incapacitating mental or physical condition. 7.4 Default Beneficiary In the event the Participant dies and is not survived by a spouse, the Aggregate Account shall pass by the laws of intestacy. 7.5 Domestic Partners Effective as of January 1, 2005, for purposes of this Article VII only: (1) all references to "marriage" shall also include "registered domestic partnerships," (2) individuals in a "registered domestic partnership" shall be considered "married," and (3) all references to a "spouse" shall also include a "registered domestic partner." A "registered domestic partner" and a "registered domestic partnership" refer to persons and partnerships satisfying the 16 NB1;790870.2 requirements of the California Family Code and officially registered as of the date of death with the Secretary of State as such in accordance with Section 298.5 of the California Family Code. 17 NB 1:790870 2 ARTICLE VIII j ADMINISTRATION AND AMENDMENT OF PLAN 8.1 Designation of Plan Administrator The Employer is the Plan Administrator under this Plan unless an individual employed by, or a position within the Employer, has been appointed by the Employer as Plan Administrator. In addition to a Plan Administrator the Employer may designate a delegatee to perform those activities relating to the Plan as specified in the written appointment of such delegatee. The term "Employer" as used in this Article VIII shall mean the Plan Administrator or delegatee where responsibility for administration of the Plan has been given to such parties. 8.2 Rules and Regulations The Employer shall supervise and control the operation of this Plan in accordance with its terms and may make rules and regulations for the administration of this Plan that are not inconsistent with the terms and provisions hereof. The Employer shall determine any questions arising in connection with the interpretation, application or administration of the Plan (including any question of fact relating to age, employment, Compensation or eligibility of Employees) and its decisions or actions in respect thereof shall be conclusive and binding upon any and all persons and parties. The Employer's interpretations, determinations and actions taken under the Plan shall in all cases result in like treatment for Employees who are similarly situated. f 8.3 Amendment and Termination The Employer shall have the right to amend, modify or terminate this Plan at any time. In the event of a termination or the complete discontinuance of this Plan, the entire interest of each Participant affected thereby shall immediately become 100% Vested. The Employer shall not be liable for the payment of any benefits under this Plan and all benefits hereunder shall be payable solely from the assets of the Trust. 18 NB1:790870.2 ARTICLE IX ANNUAL ADDITION LIMITS 9.1 Construction Section 3.5 of the Plan shall be construed in accordance with this Article IX, Unless the context clearly requires otherwise, words and phrases used in this Article IX shall have the same meanings that are assigned to them under the Plan. 9.2 Definitions As used in this Article IX, the following terms shall have the meanings specified below (a) "Annual Additions" shall mean the sum credited to a Participant's Accounts for any Plan Year of (i) Employer contributions, (ii) Employee contributions, (iii) forfeitures, and (iv) amounts credited after March 31, 1984 to an individual medical account, as defined in Section 415(1)(2) of the Code which is part of a pension and annuity maintained by the Employer. (b) "Defined Benefit Plan" means a plan described in Section 4140) and 414(k)(2) of the Code. (c) "Defined Contribution Plan" means a plan described in Section 414(1) and 414(k)(2) of the Code. (d) "Section 415 Compensation" shall mean a Participant's wages within the meaning of Code Section 3401(a) and all other payments of compensation to the Participant by the Employer (in the course of the Employer's business) for which the Employer is required to provide the Participant a written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Section 415 Compensation shall be determined without regard to any rules under Code Section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed. Compensation for any limitation year is the compensation actually paid or includible in gross income during such year. Compensation paid or made available during a limitation year shall include amounts that would otherwise be included in compensation but for an election under Code Section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(13), 402(k) or 457(b). "Section 415 Compensation" does not include any amounts paid following a severance from employment, except amounts paid or includible in gross income by the later of 2 1/2 months after a severance from employment or the end of the Plan Year that includes the severance from employment shall be included if, (i) absent the severance from employment, such compensation would have been paid to the Participant while the Participant continued in employment with the Employer, and such payments represent regular compensation for services during the Participant's regular working hours (or compensation for services outside the Participant's regular working homy, such as overtime or shift differential), commissions, bonuses or similar compensation, (ii) the payment is for unused accrued bona fide sick, vacation or 19 NB1:664952.7 other leave that the Participant would have been able to use if employment had continued, or (iii) the payment is received by the Participant pursuant to a nonqualified unfunded deferred compensation plan and would have been paid at the same time if employment had continued, but only to the extent includible in gross income. Any payments not described above shall not be considered Section 415 Compensation if paid after severance from employment, even if they are paid by the later of 2 12 months after the date of severance from employment or the end of the limitation year that includes the date of severance from employment. 9.3 Annual Addition Limitations (a) The compensation limitation of Section 3.5 of the Plan shall not apply to any contribution for medical benefits (within the meaning of Code Section 419A(f)(2)) after separation from service which is heated as an Annual Addition. (b) If any Employer contributes amounts, on behalf of Participants covered by the Plan, to other Defined Contribution Plans, the limitation on Annual Additions provided in Article III of the Plan shall be applied to Annual Additions in the aggregate to the Plan and such other plans. Reduction of Annual Additions, where required, shall be accomplished by reducing contributions under such other plans pursuant to the directions of the fiduciary for administration of such other plans or under priorities, if any, established by the terms of such other plans, and then, if necessary, by reducing contributions under the Plan. (c) In the event the limitations of Section 3.5 of the Plan or Sections 9.3(a) or (b) of this Article IX are exceeded such excess may be corrected as permitted by applicable IRS guidance (such as under Revenue Procedure 2008 -50 or its successors). 20 NB1:664952.7 ADOPTION OF THE AMENDED AND RESTATED CITY OF DOWNEY PARS ALTERNATE RETIREMENT SYSTEM The Amended and Restated City of Downey PARS Alternate Retirement System is hereby adopted. BY: A-L/i" l ( TITLE: Director of Finance DATE: ti ( 2L( (J-ol ty BY: JAte, TITLE: City Manager DATE: 11/25/14 ATTEST: BY: ADRIA M. JIMENEZ, CIVIC CITY CLERK I' DATE: I I -,Dv ) "T APP VED AS TO F)@ K7 BY: ETTE M. ABICH GARCIA CITY ATTORNEY Volume Submitter Sponsor: Public Agency Retirement Services P.O. Box 11119 Newport Beach, CA 92658 -5019 (800)540 -6369 Volume Submitter Plan Letter Serial No: J593760a 21 NBI:664952J