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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Francisco, California, Deferred Compensation Plan, as Revised,' adopted by Resolution 66-79, on June 6, 1979, is hereby rescinded. 2.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-