HomeMy WebLinkAboutReso 68-1980 RESOLUTION NO. 68-80
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 6, 1979, pursuant to
Resolution 66-79, adopted the South San Francisco, California Deferred Com-
pensation Plan, as revised; 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, certain federal regulations have been modified which impact on
the City of South San Francisco, California, Deferred Compensation Plan, as
revised 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 A(Jopted by Resolution 66-79. The Deferred Compensation
Plan entitled, "The City Of South San Francisco, California, Deferred Compensation
Plan, as Revised,' adopted by Resolution 66-79, on June 6, 1979, is hereby
rescinded.
2. Adoption of Plan. The Deferred Compensation 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.
date.
3. Effective Date. The Plan shall be effective on the day of
, 198o and shall apply to compensation earned after the effective
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. City Clerk. The City Clerk shall-
5.1 Certify to the adoption of this Resolution and cause same
to be entered into the records of the City Council.
5.2 Make the following endorsement on the face of the Deferred
Compensation Plans adopted by Resolution No. 48-77.on May 4,
1977; Resolution No. 85-77 on June 15, 1977 and Resolution
No. 66-79 on June 6, 1979' This Plan was rescinded by
Resolution No. 68-80 adopted the 18th day of June ,
19 80 , which Resolul~ion adopted a revised Deferred Com-
pensation 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
regular meeting held on the~ 18th day of ~bne , 19 80 , by
the fol 1 owing vote-
AYES' Councilmen Ronald G. Acosta, Mark N. Addiego, Emanuele N. Damonte,
Gus Nicolopulos; and Councilwoman Roberta Cerri Teglia
None
NOES-
ABSENT. None
ATTEST:
City Clerk
-2-
EXHIBIT "A"
TO RESOLUTION NO. 68-80
ADOPTED 6/18/80
DEFERRED COMPENSATION PLAN
CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
SECTION 1. Name:
The name of the Plan is the City of South San Francisco, California,
Deferred Compensation Plan (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, termin-
ation of employment or other event as provided herein, in accordance
with Sections 53212 - 53214 of the Government Code of the State of
California; and the applicable provisions of the Internal Revenue Code.
SECTION 3. Definitions:
For the purposes of this Plan, certain words 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 require-
ments of enrollment into this Plan as designated eligible by the
City of South San Francisco.
3.4
"Participation Agreement" 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
'performed 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
3.7
"Employment Period" shall mean any calendar month.
"Disability" shall mean the complete and permanent inability of
a'participant 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 of
physicians.
3.8 ,Normal Reitrement Date" shall mean:
A. The normal retirement age specified in any other retirement
plan maintained for the employee by the employer; or
B. The date the employee attains age sixty-five (65).
3.9
"Administrator" shall mean the person appointed by the employer
to administer the Plan.
3.10 "Deferred Compensation" shall mean the amount ~of compensation
not yet earned which the participant and the City shall mutually
agree will be reduced.
3.11 "Committee" shall mean Deferred Compensation Advisory Committee.
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 force and effect unless terminated as provided in
i~ Section 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 thirty (30) days prior to effective 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. 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
ten dollars ($10) per pay period.
4.4 Leave of Absence:
A. If a participant is on an approved leave of absence from
the City with compensation, or on an approved leave Of
absence without compensation for a period of not more than
.three (3) months, his participation in this Plan may continue.
B. If a participant is on an approved leave of absence without
compensation and such leave of absence continues for more
-2-
than three (3) months,, said participant will be deemed to have
withdrawn .from.the Plan, provided, hoWever, said participant
may request the Committee to permit him: to leave the funds
previously deferred in the Plan. Upon. termination of leave
without pay and return to active status, the participant may
execute a new Participation Agreement to be effective when
permitted by the Plan.
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
compensation as is specified by the employee in his Participation
Agreement provided that, except as provided in Section 5.2, the
maximum that each participant may defer under this Plan for any
year shall not exceed the lessor of:
A. Seven thousand five hundred dollars ($7,500.00); or
B. Thirty three and one-third percent (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 lessor of:
A. Fifteen thousand dollars ($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
year as has not theretofore been used under Sec.tion~5.1, or
under this Section.
5.3
The participant acknowledges the right of the Committee or the
Administrator to disallow contributions under the Plan in excess
of the limitations stated above. In the case of a person who
participates in more than one deferred compensation plan governed
by U.S.C., Section 457, for the purposes of this Plan, any excess
contributions shall be treated as deferred under 'such other Deferred
Compensation Plans.
SECTION 6. Administrator of the Plan:
6.1
The Plan shall be administered by an Advisory Committee, as appointed
by the City Manager, or its designee and it shall represent the City
-3-
as the sole authority to enforce the Plan and shall be responsible
for the operation of the Plan in accordance with its terms, and
shall determine all the questions arising out of the administration,
interpretation and application of the Plan, which determinations
shall be conclusive and bindi~ng on all persons.
6.2' The employer shall establish a deferred compensation fund to which
all deferred compensation shall be credited at such times as the
compensation would have been payable to individual employees if not
a participant in the Plan. Separate book-accounts will be established
for each employee participating which will show all amounts of
deferred compensation, investments 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 designate
his investment objective prospectively only. The employer may invest
amounts of deferred compensation in mutual fund shares, or interest
deposits with a savings and loan company or banking institutions, or
investments with a stock br.oker, or life insurance and/or fixed/varible
annuity contract with an insurance company, whichever in the employee's
sole judgment will best achieve the employee's objectives. The
employee's investment designations are intended to be an expression
of mere investment preferences and 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 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 com-
pensation 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
and 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.
-4-
SECTION 7. Distribution of Benefits-
7.1 Election: Each participating employee may elect the payout options
and the payout periods for each event' stated in Sections 7.2, 7.3,
7.4 and 7.5. Such payment, method of payment and settlement options
must be selected prior to the earliest distribution date provided in
the P1 an.
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 withheld, shall be distributed to him in any one or more of
the fol 1 owl ng 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
distribution began or over a period established by the
employer not greater than the life expectancy of the
participant with a provision for a period certain. Life
expectancy shall be determined once by the employer on the
date of the initial installment distribution. Installment
distributions will be made in substantially equal payments,
but no .payment shall have a value of less than (the smaller
of) fifty dollars ($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
-5-
have a value of less than (the smaller of)fifty dollars
($50,00) or the balance credited 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 b~irthday.
The employer shall make distribution by any oi~ the foregoing methods
or combinations thereof. Participant's book account balances will
continue to be invested until, in the employer's sole judgment, cash
is to be withdrawn for payment Of benefits. Payment .of benefits under
Section 7.'4(a) and (b) will commence on the first day of the third
month following termination of employment. Payment of benefits under
Section 7.4(c) will ~commence on the first day of the nionth 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 distr.ibuted to his beneficiaries in the manner designated
in his Participation Agreement. The employer shall, in the case of
lump sum payment, make payment ninety (90) days after notification of
the death of the participant, in compliance with any State laws governing
the payment of death benefits.
7.6 Financial Hardship: Notwithstanding any other provisions herein, in
the event of an unforseeable emergency of "financial hardship," ~such
events being beyond the control of the participant, a participant
may request the Committee to pay benefits. If the application for
payment lis approved by the Committee, payment will be made as soon
as possible, following such lan approval. Benefits to be paid shall
be limited strictly to that amount necessary to meet the emergency
situation constituting financial hardship. Any remaining benefits
shall be paid in accordance with Articles 5 and 6 of this Plan.
Payments of benefits due to an unforseeable emergency of "financial
hardship" shall include the following: (1) Impending personal bank-
ruptcy, (2) Unexpected and unreimbursed major expenses resulting from
illness, accident or disability of the participant or any dependent
thereof, 'major nature that would not normally be budgetable.
Forseeable personal expenditures normally budgetable, such as a
down payment for a home, the purchase of an automobile, college or
other educational expense, etc., will not constitute a "financial
hardship."
SECTION 8. Employer Participation:
Notwithstanding any other provision of this Plan, the employer may make
additional deposits in the deferred compensation fund as additional com-
pensation for services to be rendered by the employee to the employer
during an employment period; provided,
Ae
The employee has elected to have such additional comp. ensation deferred,
invested, and distributed, pursuant to this Plan, prior to the employment
period in which the compensation will be earned; and
-6-
B. That such additional deposit shall not exceed the maximum deferral
permitted in Section 5~ '
SECTON 9. Non~Assignabiltiy:
To the fullest extent permitted by law, the interest of a participant
in the contractUal obligation of the employer, established by the Plan,
shall not be assignable in whole or in part, directly or by operation
of law or otherwise, in 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 to designate benefiCiaries to receive any benefit to 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. Participant may change beneficiary
designation at any time by filing a Change of Beneficiary form with.
the Commi tree/Administrator.
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 (includi~ng retroactive
amendments) or cease deferring compensation pursuant to the Plan,
by deliveri.ng 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
-7-
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.
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,
or approving of any such investment of funds, shall not be considered to be
either an endorsement or guarantee of any investment, nor shall it be con-
sidered to attest to the financial soundness or the suitability of any
investment for the purpose of meeting future obligations as provided in
Section 7.
-8-