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HomeMy WebLinkAbout1979-10-02; City Council; Resolution 59481 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 5948 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA ADOPTING AN EfiGLOYEE'S DEFERRED COMPENSATION PLAN AND AUTHORIZING THE EXECUTION OF AGREEMENTS RELATED TO SAID PLAN BY THE MANAGER OF THE CITY OF CARLSBAD. BE IT RESOLVED by the City Council of the City of Carlsbad as follows: WHEREAS, the City of Carlsbad has in its employ employees who are and will be rendering valuable services to the City; and WHEREAS, said employees may desire to defer income until retirement for the purpose of deferring Federal and State Income Taxes on said income; and WHEREAS, the City Council of the City of Carlsbad has con- sidered the establishment of a Deferred Compensation Plan for the said employees and believes that the adoption of said Plan will enhance the efficiency and morale of the employees and will be in the best interests of the City; and WHEREAS, it is intended that said Plan shall be in accordance with Federal and State law and regulations; and WHEREAS, the City Council finds that it would be for the benefit and in the best interests of the City to approve the proposed Deferred Compensation Plan this day submitted to the City Council. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California that the City Council establish said Deferred Compensation Plan for said employees of the City and that said Deferred Compensation Plan this day submitted to the City Council, which is attached hereto as Exhibit "A" be, and the same is hereby approved and adopted, to be effective this date and to .. 1 f 5 4 5 7 E 5 1c 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 remain in effect until terminated by further resolution of the City Council. BE IT FURTHER RESOLVED THAT City Manager of the City of Carls- bad is hereby appointed to administer the Plan on behalf of the City and is authorized to execute Participation Agreements with aligible officers, officials and employees, and all other Documents snd Agreements necessary to implement and administer the Plan. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Zouncil on the 2nd day of October , 1979 by the followin rote, to wit: AYES : NOES : None Councilmen Packard, Anear, Lewis and Councilwoman Casler ABSENT: C o u n c i 1 ma n S k o t n i c k i iTTEST : SEAL) Exhibit A to Resolution No.5948 CITY OF CARLSBAD DEFERRED COMPENSATION PLAN SECTION 1. NAME: Plan (hereinafter referred to as the "Plan"). The name of this Plan is the City of Carlsbad Deferred Compensation SECTION 2. PURPOSE: The purpose of this Plan is to enable Employees of the City of Carlsbad to deEer portions of their compensation and to provide retirement, disability and death benefits. SECTION 3. DEFINITIONS: used herein will have the following meanings. For the purpose of this Plan, certain words or phrases 3.1 "Employer" means the City of Carlsbad. 3.2 "Employee" means any officer or employee of the City of Carlsbad. 3.3 "Participant" means any eligible Employee who elects, pursuant to the Plan, to defer a portion of his/her compensation, and who fulfills the requirements for participation in the Plan. 3.4 "Participation Agreement" shall mean the written agreement by which an Employee elects to become a Participant under the Plan. 3.5 "Beneficiary" may be any person, trust, corporation or firm, or the estate of the Participant, or any combination of the foregoing designated by a Participant to receive benefits under the Plan. Designation shall be by written instrument executed by the Participant unless otherwise provided. Beneficiary may be singular or plural, primary or contingent. 3.6 "Administrator" means the Employer and/or other parties appointed by the Employer to administer the Plan. 3.7 "Compensation" means the total of all amounts which would be paid by the Employer to or for the benefit of an Employee (if he were not a participant in the Plan) for actual services for the period that he is a Participant. 3.8 "Payroll Period" means the work period for which a pay check is issued. 3.9 "Includible Compensation" means compensation for services performed for Employer which is currently includible in gross income, but less any amounts deferred pursuant to a plan described in IRC Section 457 (including but not limited to this Plan) or IRC Section 403(b). 3.10 "Retirement" means retirement from service with the Employer which becomes effective on the first day of the calendar month after Participant meets the age and service requirements for retirement (including "early" or "late" retirement) specified in the applicable retirement policies of the Employer. SECTION 4. PARTICIPATION IN THE PLAN 4.1 4.2 4.3 4.4 4.5 Any Employee designated by the Employer to be eligible may elect to become a Participant in the Plan by executing and filing a Participation Agreement with the Administrator. An election to Participate in the Plan shall become effective with respect to Compensation earned by the Participant during the pay period next following the date of the Participant's election. Such election shall continue thereafter in full force and effect unless revoked by the Participant. Each Participation Agreement shall specify the dollar amount, which is to be deferred pursuant to the Plan and to be withheld out of the Compensation otherwise payable to the Participant for each payroll period. The amount deferred each year may not exceed the lesser of $7,500 or 25% of Participant's gross Compensation. Such deferred amounts shall be reasonable equal installments totaling not less than ten dollars ($10.00) per payroll period. Notwithstanding the provisions of 4.2 herein, during any or all of the last 3 tax years ending before a Participant's normal retirement age the maximum amount deferred annually shall be the lesser of $15,000 or the sum of the maximum amount which can be deferred pursuant to paragraph 4.2 plus the difference between the amount which could have been deferred in prior years and the amount actually deferred pur- suant to the Plan. A Participant may revoke his election to participate in the Plan, and thereby terminate further deferral of his Compen- sation, by executing and filing with the Administrator a notice of revocation at leastfourteen(l4) days prior to the effective date of revocation. A former Participant may not rejoin the Plan during the calendar month in which revocation occurred; however, he may elect to become a Participant for subsequent calendar months after a lapse of not less than three (3) months. No amounts shall be payable to an Employee upon revocation of his participation in the Plan unless otherwise provided for in Section 7. A Participant may change the amount of Compensation to be deferred in subsequent pay periods by executing and filing notice with the Administrator at least 14 days prior to the -2- beginning of such pay period, provided however, that such change may be made not more than fourtimes in a calendar year. 4.6 A Participant may designate in writing a Beneficiary to receive any benefits which may be payable under the Plan upon the death of such Participant. Designation of Beneficiary may be changed by notice in approved form executed and filed with the Administrator. SECTION 5, DEFERRAL OF COMPENSATION 5.1 During the period of participation, the Employer shall not pay the Participant his full compensation, but shall defer payment of such part of his Compensation as the Participant has specified in his Participation Agreement. The Employer shall establish in its records an Individual Deferred Compensation Account ("IDC Account") for each Participant, and a summary of such IDC Accounts, to be identified as a General Deferred Compensation Account ("GDC Account"), to provide a convenient method of measuring its obligations to each and all Participants under the Plan. 5.2 Neither the existence of the Plan nor the IDC Accounts shall be deemed to create a trust, and the Employer shall at all times be the legal and beneficial owner of all assets of said IDC Accounts. 5.3 Neither the existence of the Plan or the IDC Accounts shall entitle any Participant, a beneficiary of any Participant, or a creditor of any Participant to a claim or lien against the assets of the IDC Accounts. The Participant and his beneficiary shall have only the right to receive benefits pursuant to the Plan. SECTION 6. ADMINISTRATION OF THE PLAN 6.1 The Plan shall be administered by the Administrator under the direction of the Employer. Acting for and in behalf of the Employer, the Administrator may transmit amounts in the IDC Accounts to such investment plans as hereafter may be approved by the Employer, In regard to such investments, written agreements between employer and the institutions accepting funds for investment shall contain at least the following provisions: 6.1 (a) Any investment of amounts in the IDC Accounts, including earnings on such amounts, shall be made according to written instructions of the Administrator. 6.l(b) The Employer shall be the legal and beneficial owner of all amounts invested (as between Employer and Participant). The Employer shall hold all certificates, policies and other documents evidencing ownership of the amounts invested, and shall maintain records, -3- . DEFERRED COMPENSA N PLAN W including records of the IDC Account of each Participant and the GDC Account. 6.l(c) No less frequently than quarterly, the Employer shall be furnished with written reports showing the fair market value and/or the current balance of the amount invested (including interest and dividends accrued, if any), and amounts shown in such reports shall be reflected in each Participant's IDC Account by the Employer. 6.l(d) No less frequently than quarterly, each Participant shall be furnished with a statement showing transactions, earnings and the current balance of the amounts invested from his IDC Account. 6.l(e) The Employer shall have the sole right to vote any shares of stock or proxies which it may acquire or be entitled to by investment of IDC Account funds. 6.2 The Administrator shall record promptly and accurately all transactions pertaining to Participants' Deferred Compensation in their IDC Accounts, and Participant shall be entitled to know the balance in his IDC Account at least quarterly. 6.3 The Employer shall have the sole authority to enforce the Plan and shall be responsible for its operation in accordance with its terms. 6.4 The Employer shall determine all questions arising out of the administration, interpretation and application of the Plan. All determinations shall be conclusive and binding. 6.5 Prior to the time specified in the Plan for payment to Partici- pant each Participant shall elect the time, manner and (if applicable) the amount of benefits to be paid to him, or in the event of his death to his Beneficiary, under the Plan. If no election is made, payment may be made as a lump sum distribution. 6.6 In the event that the Employer should purchase an annuity as a means of investment and distribution of funds in a Partici- pant's IDC Account, the Employer shall be both the owner and the named Beneficiary of such annuity contract. 6.7 If the Plan provides for more than one type of investment objective, a Participant may request a change in preference of investment (as provided in Section 4.4). Such request may be made only with respect to compensation not yet earned and deferred. The Employer may, but is not required to, honor such request. shall be ten dollars($lO.OO)per Payroll Period. contained in this Plan shall be construed as requiring the Employer to invest deferred amounts or as limiting the Employer's discretion with respect to making investments. The minimum investment in each type of investment Nothing -4- .- DEFERRED COMPENSXI’ION PLAN SECTION 7. BENEFITS The Employer shall pay to the Participant, or to his Beneficiary if applicable, the amount in such Participant’s IDC Account as of the month-end following the Participant’s termination, retirement, total disability or death. Distribution of Benefits under the Plan will be made, or if in installments shall commence, not later than sixty (60) days after notice to the Administrator of the occurrence of the events or birthday described in Section 7 unless otherwise specifically provided in the Participation Agreement, All distributions shall be subject to any State or Federal taxes required to be withheld. Payment shall be made in accordance with the election made in the Participation Agreement, except in the event of Hardship described in Section 7.4. Installment distributions shall be approximately equal installments which shall be intended to exhaust the balance due Participant or Beneficiary at the expiration of the term over which they will be made. Such installment amounts may be adjusted from time to time to take into consideration gains or losses, if any, from funds invested. Notwithstanding the foregoing if any method elected by the Participant shall result in installment payments of less than $50, the Employer shall make payments on an annual basis aggregating installments other- wise due; or if the balance due Participant or Beneficiary is less than $1,000, Employer shall discharge its obligation by a lump sum payment. 7.1 RETIREMENT: Upon retirement, the full benefits credited to the Participant’s IDC Account, plus or minus investment gains or losses, but less any Federal or State taxes required to be withheld, shall be distributed to a Parti- cipant in any one or more of the following ways, as pre- elected at time of enrollment: 7.l(a) 7,l(b) 7.1 (c) In a lump sum. In monthly, quarterly, or annual payments for a designed period of not less than one year and not more than the remaining years of the Parti- cipant’s life expectancy, determined by the Administrator in accordance with standard mortality tables recognized for that purpose. In payments, under 7.l(a) or 7.l(b) above, postponed by pre-election at time of enrollment until Partici- pant reaches age 55. -5- .' DEFERRED COMPENSATION PUN 7.2 7.3 7.4 7.5 OTHER TERMINATION: In the event of termination of employment before retirement for reasons other than those specified in Section 7.3 and Section 7-4, then the full benefits credited to Participant's IDC Account, plus or minus subsequent gains or losses, shall be distributed to him in any one or more of the following ways, pre-elected at the time of enrollment: 7.2(a) In a lump sum, 7,2(b) In monthly payments over a period not to exceed ten (10) years from date distribution begins. 7.2(c) In payments, under 7.X(a) or 7.2(b) above, postponed by pre-election at time of enrollment until Participant reaches age 55. TOTAL PEFQ4ANENT DISABILITY: In the event of the total permanent disability of a Participant w:hile he is an Employee of the Enployer, the Employer shall pay to the Participant an amount equal to the balance of the Participant's IDC Account as of the month-end following the Employer's determination of such dis- ability, such amount to be paid in the manner pre-elected by the Participant at the time of enrollment pursuant to the options in Section 7,1, above, HARDSHIP: In the event of occurrence to the Participant of an unforseeable emergency event to be determined by the Employer in his sole discretion, the Employer may pay to the Participant all or any portion of the amount in such Participant's IDC Account as of the month-end following the date when such deter- mination is made. As used herein, emergency event shall mean only a real emergency which has occurred, which is or was beyond control of the .Participant, and the occurrence of which has or would cause the Participant great financial hardship. The amount that will be paid out shall be limited to the amount necessary to alleviate that hiardship. Any distribution under this section shall be deemed a revocation under Section 4.4 and no further deferral of Compensation will be made unless Participant subsequently re-elects to participate as provided in 4.4, DEATH: or after termination of employment, then the full benefits credited to his IDC Account shall be distributed to his Bene- ficiary in a manner described in Sections 7.l(a), 7.l(b) and 7.1 (c) as pre-elected at time of enrollment. In the event of death of any Participant, either before -6- DFZERRED COMPENSATION PLAN SECTION 8. MISCELLANEOUS 8.1 The contractual obligation of the Employer to the Participant established by the Plan shall not be assignable in whole or part, voluntarily or by operation of law, and no right or interest of a Participant pursuant to the Plan shall be subject to any obligation or liability of such Participant or his Beneficiary, except as provided in the next paragraph hereinbelow, 8.2 No Participant or other person shall have any legal or equitable right against the Employer except as provided in the Plan, and in no event shall the terms of employment of any Employee or Participant be modified or in any way affected thereby. 8.3 Each Participant herein expressly agrees for himself and his Beneficiary that he shall look solely to the general assets of the Employer for the payment of any such benefit to which he may become entitled under the Plan, and acknowledges that all amounts deferred hereunder shall be available to satisfy the general obligations of the Employer, 8.4 The Plan has been adopted in the State of California and shall be construed and governed and administered in compliance with all applicable State law. 8.5 Captions used in the Plan are for the purpose of convenience only, and shall not limit, restrict or enlarge the provisions of the Plan. 8.6 The Plan shall be binding upon and shall inure to the benefit of the Employer, its successors and assigns, all Participants and Beneficiaries, and their heirs, and legal representatives. 8.7 As used in the Plan, the masculine or feminine or neuter gender, and the singular or plural number shall each be deemed to include the others unless the context clearly indicates other- wise. 8.8 Any notice or other communication required or permitted under the Plan shall be in writing and, if directed to the Employer, shall be sent to the Administrator at his principal office; and, if directed to a Participant or a Beneficiary, shall be sent to such Participant or Beneficiary at his last known address as it appears on the Employer's records. shall be deemed given when mailed. Such notice 8.9 Deductions for Participant's contributions to retirement shall be made without reference to amounts deferred pursuant to the Plan, 8.10 An approved leave of absence with pay shall not affect agree- ments to participate in the Plan. -7- ‘9 DEFERRED COMPENSATION PLAN 8-11 An approved leave of absence without pay shall be considered to be a temporary suspension of participation in the Plan. Participation shall be automatically reinstated as of the first day of the next Pay Period subsequent to the termination of such leave of absence status. 8.12 The Employer shall make no loans or advances to the Participant or Beneficiary based upon IDC Accounts, described herein, or upon any other obligations under the Plan. SECTION 9. TERMINATION OF PLAN BY EMPLOYER The Plan may be amended or terminated by the Employer at any time, or the Employer may, without amending or terminating the Plan, cease to set aside assets under the Plan. No amendment or termination of the Plan, and no cessation of the setting aside of assets by the Employer shall reduce or impair the rights of any Participant or Beneficiary which may already have accrued, 9.1 If the Plan is terminated by the Employer, the Employer may, elect to distribute, in the same manner to all Participants, amounts equal to the balance of their IDC Accounts as of the month-end following such termination. If Employer does not elect to pay accrued benefits on termination of the Plan, he shall cease all deferrals of Compensation, but payments of benefits shall be made pursuant to the applicable provisions of Section 7 of the Plan and the irrevocable election of the various Participation Agreements then in effect. 9.2 -8-