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HomeMy WebLinkAboutReso 66-1979 RESOLUTION NO. 66-79 CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA · 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 · 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of South San Francisco, California, Deferred Compensation Plan" adoPted by Resolution 85-77 on June 15, 1977, is hereby rescinded. 2.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' · 6th day of June ., AYES' Council.members Ronald G. Acosta, William A. Borba, Emanuele N. Damonte, · Terry'Ji Mirri and Roberta Cerri Tealia NOES- None ABSENT- None ATTEST' J 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. · 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 2~ 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. 3~ 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 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 . 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: · 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. Ge 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. ,