HomeMy WebLinkAboutReso 66-1979 RESOLUTION NO. 66-79
CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA
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A RESOLUTION ADOPTING THE CITY OF SOUTH
SAN FRANCISCO, CALIFORNIA, DEFERRED
COMPENSATION PLAN, AS REVISED
WHEREAS, the City of South San Francisco on June 15, 1977, pursuant to
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Resolution 85-77 adopted the South San Francisco, California, Deferred
Compensation Plan; and
WHEREAS, the Deferred-Compensation Plan as adopted was written to
comply with the then current Internal Revenue Code and Rules and Regulations
promulgated thereunder; and
WHEREAS, the 95th Congress passed the Revenue Act of 1978 (P.L. 95-600)
which has significant impact on the City of South San Francisco, California,
Deferred Compensation Plan and does require certain amendments to the Deferred
.
Compensation Plan to insure that continued deferral of compensation by
employees will continue to be excluded from the employees' gross income in
the year of deferral; and
WHEREAS, the City now desires to rescind said Plan as' so adopted and
adopt a Deferred Compensation Plan as revised, which is set forth in Exhibit A
attached hereto and made a part hereof;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South
San FrancisCo that
1. Rescission of Plan Adopted by Resolution 85-77. The Deferred
Compensation Plan entitled, "The City of South San Francisco, California,
Deferred Compensation Plan" adoPted by Resolution 85-77 on June 15, 1977, is
hereby rescinded.
2. Adoption of Plan. The Deferred'Compensation Plan entitled, "Deferred
Compensation Plan, City of South San Francisco, California," copy of which is
attached hereto as Exhibit A, is hereby adopted and the City hereby consents
to the Plan and shall perform its functions as therein set forth.
3. Effective Date. The Plan shall be effective on the 6th day of
June, 1979, and shall apply to compensation earned after the effective date.
4.~ Participation. The City consents to the participation of those
individuals who perform service for the City as common law employee, officer
· or independent contractor upon completion of a memorandum of understanding so
providing, such participation to be in accordance with the participation
agreement.
5. Effect of this Resolution. This Resolution supersedes only Para-
graphs 2, 3 and 4 of Resolution 85-77 adopted June 15, 1977, and Paragraphs
1, 5 and 6 as set forth in said Resolution shall remain in effect.
6.. City Clerk. The City Clerk shall
6.1 Certify to the adoption of this Resolution and cause same to
be entered into the records of the City Council.
6.2 Make the following endorsement on the face of the Deferred
Compensation Plans adopted by Resolution No. 48-77 on
May 4, 1977 and Resolution No. 85-77 on June 15, 1977:
This Plan was rescinded by Resolution No. 66-79 adopted
the 6~h day of June , which Resolution
adopted a revised Deferred Compensation Plan.
I hereby certify that the foregoing Resolution was regularly introduced
and adopted by the City Council of the City of South San Francisco at a
e
regular meeting held on the
1979 , by the following vote'
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6th day of June .,
AYES'
Council.members Ronald G. Acosta, William A. Borba, Emanuele N. Damonte,
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Terry'Ji Mirri and Roberta Cerri Tealia
NOES- None
ABSENT- None
ATTEST'
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EXHIBIT A
TO RESOLUTION NO. 66-79
'ADOPTED June 6, 1
DEFERRED COMPENSATION PLAN
CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
SECTION 1. NAME:
The name of th:is Plan is the City of South San Francisco, California, Deferred
Compensation Pl, an (hereinafter referred to as the Plan).
SECTION 2. PURPOSE:.
The'primary purpose of this Plan is to attract and hold personnel by permitting
them to enter into agreements with the City of South San Francisco 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 Sections 53212 - 53214 of the Government
Cod6 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 and phrases used herein will have
the following meanings:
3.1 "Employer" shall mean the City of South San Francisco, California~
3.2 "Employee" shall mean only those individuals who perform service for the
Employer as an officer, a common law employee or an independent contractor.
3.3 "Participant" shall-mean any employee who fulfills the requirements of
enrollment into this Plan as designated eligible by the City of South San
Francisco.
3.4 "Participation Agreement''I shall mean the agreement executed and filed by
an employee with the employer pursuant to Section 4, in which an employee
elects to become a participant in the Plan.
3.5 "Includible Compensation" 'shall mean the compensation for service per-
formed for the employer which (taking into account the provisions of
Sections 457 and 403(b) of the Internal Revenue Code) is currently
includible in gross income. Amounts of compensation shall be determined
without regard to any community property laws.
3.6 "Employment Period" shall mean any calendar month.
3.7 "Disability" shall mean the complete and permanent inability of a partici-
pant to engage in his usual occupation by reason of a.medically determinable
physical or mental impairment as determined solely by the employer on the
basis of advice from'a physician or physicians.
3.8 "Normal Retirement Date" shall mean the later of:
A. The normal retirement age specified in any other retirement main-
tained plan for the employee by the employer, or
B. The date the employee attains age 65.
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SECTION 4. PARTICIPATION IN THE PLAN:
4.1 A Participation Agreement shall be effective for the first employment'
period following its execution and filing with the employer. The
Participation Agreement shall continue from period to period and remain
in full for£e and effect unless terminated as provided in Section 4.2.
4.2 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 effec-
tive date of termination. Once terminated, a former participant cannot
rejoin the Plan during the employment period in which termination occurred;
however, he may elect to become a participant in subsequent employment
periods in accordance with open enrollment practices. No amounts shall be
payable to an employee ~upon terminating his participation in the Plan
unless otherwise due pursuant to Section 7.
4.3 'A participant may select, pursuant to Section 6, one or more investment
objectives provided that the amount deferred for each objective equals or
exceeds the minimum of not less than $10 per pay period.
SECTION 5. DEFERRAL OF. COMPENSATION:
5.1 During each employment period in which an employee is a participant in
the Plan, the employer shall defer payment of such part of his compensa-
tion as is specified by the employee in his Participation Agreement pro-
vided that, except as provided in Section .5.2, the maximum that each
participant may defer under this Plan for any taxable year shall .not
exceed the lesser of:
A. $7,500.00, or
B. 33-1/3% of the participant's Includible Compensation.
5.2 The maximum deferral described in Section 5.1 shall not be-appliCable for
one or more of the participant's last three taxable years ending before
the attainment of normal retirement age under this Plan. In that instance,
the maximum shall be the lesser of:
A. $15,000.00, or
B. The sum of
(i) The maximum deferral amount established for the purpose of
Section 5.1 for the taxable year (determined without regard~
to this Section), plus
(ii) So much of the maximum deferral amount established for the
purposes of Section 5.1 for taxable years before the taxable
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year as has not theretofore been used under Section 5.1 or
under this Section.
SECTION 6. ADMINISTRATION OF THE PLAN:
6.1 The employer shall administer or contract for administration and operation
of the P12n in accordance with its terms and shall determine all the
questions~arising out of the administration, interpretation and applica-
tion of t~e Plan, which determination shall be conclusive and binding upon
all persons. An advisory committee may be designated by the City Manager
to aid and ~ssist the employer in so administering and operating the Plan.
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 in
the Plan. Separate book accounts will be established for each employee
participating which will show all amounts of deferred compensation, invest-
ments made, shares acquired and earnings and gains on investments. Each
book account will be valued at least quarterly.
6.3 On executing the Participation Agreement, the employee shall desi§nate
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 institutions, 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 employee's
investment designations are intended to be an expression of mere invest-
ment preferences and do not obligate the employer to follow the employee's
designations.
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 all
dividends, capital gains distributions, interest or other income payable
on any of the employer's investments of 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 custodial 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. The employer shall have
only a contractual obligation to pay the benefits due the participant
under the Plan.
6.6 All amounts of compensation deferred under this Plan, all property ana
rights purchased with such amounts, and all income attributable to such
amounts, property and rights shall remain (until made available to the
participant or his beneficiaries) solely the property and rights of the
employer, without being restricted to the provision of benefits under this
Plan.
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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.
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7.2 Retirement - In the event of retirement, the full benefits credited to
the participant's book account plus or minus subsequent investment gains
or losses, but less any Federal or State income taxes required to be with-
held, shal-1 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 10 years from date distribution began or
over a. period established by the employer not greater than the
life expectancy of the participant; or, for a participant eligible
for an annuity payout option, installments during the lifetime of
the participant with a provision~for a period certain. Life expec-
tancy shall be determined once by the employer on the date of the
initial installment distr, ibution. Installment distributions will
be made in substantially 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.
7.2(c) Postpone payments under 7.2(a) and (b) above until participant
reaches his 50th, 55th, 60th or 65th birthday.
Participant's book account balances may cOntinue to be invested until -
in the employer's sole judgment - cash is to be withdrawn for payment of
benefits. Payment of benefits will commence on the first day of the third
month following termination of employment. Payment of benefits under
Section 7.2(c) will commence on the first day of the month following
participant's birthday.
7.3 Disability - In the 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 the event of termination of employment by 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 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 monthly, quarterly, semi-annual or annual installments of
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-
credited to the participant's book account.
4,
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 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 judg~nent - cash is to be withdrawn for payment of benefits. Payment
of benefit, s under Section 7.4(a) and (b) will commence on the first day
of the third month following termination of employment. Payment of bene-
fits under ~ection 7.4(c) will commence on the first day of the month
following the participant's birthday.
7.5 Death - In the event of 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 distributed to his beneficiaries in the manner designated in his
Participation Agreement. The employer shall, in the case of lump sum pay-
ment, make payment 90 days after notification of the death of the partici-
pant, in compliance with any State laws governing the payment of death
benefits.
7.6 Financial Catastrophe - In the event of financial catastrophe affecting a
participant where the withdrawal of funds would be necessary to prevent
great hardship to the participant and ~the amount necessary to meet that
financial catastrophe is not reimbursed by insurance, a participant may
apply to the employer for such amount from the Plan prior to retirement
or to termination of participant's employment with-the jurisdiction.
Examples of such need under the foregoing criteria may be catastrophic
illness, flood, fire, earthquake, death in the family, or disabling injury,
or examples of similar importance. Withdrawals for expenditures normally
budgetable, such as a downpayment on a home, purchase of an automobile,
or college expenses will not be permitted. Any amount so approved here-
under 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'employer.
SECTION 8. EMPLOYER PARTICIPATION:
Notwithstanding any other provision of this Plan, the employer may make addi-
tional deposits in the deferred compensation fund as additional compensation
for services to be rendered by the employee to the employer during an employ-
ment period; provided,
A. The employee has elected to have such additional compensation deferred,
invested, and distributed, pursuant to this Plan, prior to the employment
period in which the c6mpensation will be earned; and
B. That such additional deposit shall not exceed the maximum deferral permitted
in Section 5.
SECTION 9. NON-ASSIGNABILITY:
To the fullest extent permitted by law, the interest of a participcant in the
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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 any 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.
SECTION 10. MISCELLANEOUS:
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10.1 Status of. Participants.- Neither the establishment of the Plan nor any
modification thereof, nor the establishment of any book account nor the
payment of. any benefits, shall be construed as giving to any 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 the Plan - It is a condition of the 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.
10.3 Governing Law - This Plan shall be construed, administered, and enforced
according to the laws of the State of California.
10.4 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 entitled in the event of
his death prior to the completion of 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 ll. AMENDMENT AND TERMINATION:
ll.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, the value of all participant's book accounts shall be distributed
to the participants or their beneficiaries in lump sums on the sixtieth
(60) day after the termination of the Plan.
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SECTION 12. EMPLOYER NOT RESPONSIBLE:
The employer may, but is not required to, invest funds 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, prospec-
tively only. The employer shall retain the right to approve or disapprove such
investment requests. Any action by the employer in investing funds, o~ approving
of any such investment of funds, shall not be considered to be either an endorse-
ment 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.
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