HomeMy WebLinkAbout2012-07-24; City Council; 20975; Approve APPLE Plan Retirement BenefitsCITY OF CARLSBAD - AGENDA BILL
AB#
MTG.
DEPT.
20.975
7/24/12
CA
Approve the City of Carlsbad APPLE Plan
to provide retirement benefits for hourly
part-time employees in lieu ofSocial
Security or the existing Lincoln Financial
Advisors Plan.
DEPT. HEAD
CITY ATTY. Rfe^
CITY MGR. (y—
RECOMMENDED ACTION:
Adopt Resolution No 2012-188 or the alternative Resolution No. 2012-189 . approving the
City of Carisbad Accumulation Program for Part-Time and Limited-Service Employees (APPLE)
Plan to provide retirement benefits for hourly part-time employees in lieu of Social Security or
the existing Lincoln Financial Advisors Plan.
ITEM EXPLANATION:
This item was initially scheduled for the City Council meeting of June 26, 2012 but received
correspondence requesting that current part-time employees be granted a one-time option to
remain in the Social Security program. In response, the City Council requested that the City
Attorney prepare an alternative Resolution allowing current hourly part-time employees to have
a one-time option to remain in the Social Security system rather than participate in the
proposed APPLE Plan.
The item with the alternative resolution was agendized for the next meeting of July 10, 2012.
Prior to the consideration of the item, Councilmember Blackburn recused himself stating that he
had a personal financial interest in the outcome of the vote. The four remaining council
members voted two for and two against adoption of the APPLE Plan with the alternative
allowing current part-time hourly employees the option to remain in the Social Security system.
The vote was two in favor with Mayor Hall and Councilmember Packard opposed. The tie
resulted in denial ofthe motion to adopt the alternative resolution. Rather than then take a vote
on the resolution as initially proposed by staff on June 26, 2012, which would make
implementation of the APPLE Program mandatory for all current and future employees, the
Mayor requested that the item be continued to the next Council meeting on July 24, 2012.
At this time, the City Council has the option of voting on Resolution 2012-188 as initially
proposed by staff or to reconsider the alternative resolution if a motion for reconsideration is
made by Mayor Hall or Councilmember Packard who voted to deny the alternative Resolution.
DEPARTMENT CONTACT: Ron Ball 760-434-2891 ron.ball@cartsbadca.gov
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION: APPROVED CONTINUED TO DATE SPECIFIC •
DENIED • CONTINUED TO DATE UNKNOWN •
CONTINUED • RETURNED TO STAFF U
WITHDRAWN • OTHER - SEE MINUTES X
AMENDED • Council approved Resolution No. 2012-189.
Page 2
FISCAL IMPACT:
Based on calendar year 2011 payroll, the estimated annual savings to the General Fund due to
using the APPLE 457 plan in lieu of Social Security for hourly part-time employees is $60,000.
This savings is appropriated in the Fiscal Year 2012-13 proposed operating budget. There is no
fiscal impact related to replacing the Lincoln 457 plan with the APPLE 457 plan.
ENVIRONMENTAL IMPACT:
The proposed action does not qualify as a "project" under the California Environmental Quality
Act (CEQA) per State CEQA Guidelines Section 15378 as it does not result in a direct or
reasonably foreseeable indirect physical change in the environment.
EXHIBITS:
1. Resolution No. 2012-188
2. Alternative Resolution No. 2012-189
3. APPLE Participation Agreement
4. APPLE Plan Administrative Services Agreement
5. Unallocated Fixed Contract Application, Acceptance & New Business Agreement
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RESOLUTION NO. 2012-18^
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A RESOLUTION OF THE CITY COUWCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, ADOI^NG THE CITY OF
CARLSBAD ACCUMULATION B^OGRAM FOR PART-
TIME AND LIMITED-SERVIC^MPLOYEES (APPLE)
PLAN TO PROVIDE RETIRJ^ENT BENEFITS IN LIEU OF
COVERAGE UNDER SOO^L SECURITY OR THE
EXISTING LINCOLN FIN^fNCIAL ADVISORS PLAN, AND
AUTHORIZING AND DrffECTING THE HUMAN
RESOURCES DIREQFOR TO EXECUTE ALL
NECESSARY DOQJfMENTS
WHEREAS, Section 1J^32 of tJj^^PffffflStl^^dget Recoi^iliation ACT of 1990
("OBRA '90") extends Soq^l Seci^y refW^ent beneft covergfge to employees of state
and local governments^ho are not covered iS^a^ate or/)cal retirement system and
subjects the emplo^r and employe^o FedeprfT Insurg^ce Contributions Act ("FICA")
taxes on the emj^yee's wagesjjind
WHEREAS, OBI
coverage guvernmeHkal
system ofh state or loci
fHERB
govdfhmental employer
f90 e)^udes from JJfe requirement of Social Security
iloyeeslwho are^fcovered by a compulsory retirement
^govein^igrt; and
a Governmenj/Code section 53216, et seq., authorizes a
lish and/und a pension Plan covering its employees on
a ^mpulsory basis; and
WHEREAS, certain houriy p/rt-time employees of the City of Carisbad are not
currently covered under any other retirement program through the City or the State of
California in lieu of coverage uiyler Social Security, as permitted by OBRA '90; and
WHEREAS, the Coun/I desires to adopt a compulsory retirement Plan, qualified
under section 457 of the /iternal Revenue Code of 1986 ("the Code"), for the hourly
part-time employees, ccfjricil-appointed officials and elected officials in lieu of providing
coverage under Social Security, as permitted by OBRA '90; and
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WHEREAS, the City of Carisbad currently provide^a FICA alternative plan to
certain hourly part-time employees through the Lincoln Scandal Advisors; and
WHEREAS, the Council desires to contini^to provide a tax-qualified JtCA
alternative plan for said employees, but to afplace the existing Lincoln ^fiancial
Advisors Trust with the Accumulation Prgffram for Part-Time and Limjl§d-Service
Employees ofthe City of Carisbad ("APPyE Plan"); and
WHEREAS, Code section 41^)(2) ^^(^rtms tn\City to pickiTp the employee
portion of contributions to a s§(Ktioflr457 F^n and|to treat/mem as employer
contributions; and
WHEREAS, such "pi^d up" contrl\tions^ not ta)/ble to the employee until
distributed; and
WHEREAS, the/)ouncif has reviewed the Acci/iulation Program for Part-time
and Limited-service /mplfiyees\tie "APPL£ Plan") pjBvided by Keenan & Associates,
NOW, THEREFORE, BE X^^SSOLVED/y the City Council of the City of
Carlsbad, Califj/rnia, as follol
1. That tlfe above recitation^ are true and/orrect.
2. Tha^ the I PI F Pi'iilii iiiii|T\|ii Agreement, APPLE Plan Administrative Services
ireement and Unallocated Fixdfi Contract Application, Acceptance & New
'^Business Agreement referred ty in the recitals above are incorporated in this
resolution by reference.
3. That the Council hereby a|Bopts the City of Carisbad APPLE Plan to provide
retirement benefits to hoj/y part-time employees of the City in lieu of coverage
under Social Security and as an amendment to the existing Lincoln Financial
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Advisors Plan replacing the Lincoln Financial Advisors BJan in full, to be effective
as soon as administratively possible following adojDjjCn of this resolution.
4. That the Council hereby designates the City^Ts the Plan Administrator of
APPLE Plan.
5. That the Council hereby designates the^ity as the Trustee of the APR£E Plan.
6. That the Council hereby authojjEes Mi^Anperica AdministrglK^e Solutions
("MidAmerica"), to execute, on ^all^f^ City, the\pPLE F^jUn and any other
documents necessary to carrybut the provisiohe of thjl APPI^ Plan.
7. That the Council hereby^uthorizes HHdAmeriiCto exg^ute, on behalf of the
Employer, the APPLE Jflan ^j^fTSn^ther OTCuments/ecessary to carry out the
provisions of the Af^^LE Pfen; to entei^nto contraq^ with Keenan & Associates
to provide ongoij^ adminisl^tive conlulting s/fvices in connection with the
operation of Vr^ Plan; toyrrang^^myjfig of t/e Plan through American United
Life (AUL); \£ communica\ the Plan to eli/ble employees of the City; and to
perform r^ted services in cqjnection witj/the APPLE Plan.
8. That thi Council hereD^ leiiiTlnates/he City's participation in the Lincoln
Finan/al Advisors Plan and remove/Lincoln Financial Advisors as the Trustee
of tife Plan.
9. j/aX Keenan & Associates will ati as Broker for American United Life Insurance
Company's 3121 Alternative t/Social Security program, and provide consultant
and broker services for the #PPLE Plan as outlined in the Keenan & Associates
Service Agreement.
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10. That the Council hereby removes LincolnXFinancial Advisors as Tj^ust
Administrator and appoints MidAmerica ajfThird Party Administrator^f the
APPLE Plan.
11. That the Council directs the transfer q^he plan assets held by Un^\n Financial
Plan and TrySt to AUL, as
bad fomhe benefit of the
ys aft/July 1, 2012, or a
AdN^ors and the City of
Advisors under the Lincoln Fina
custodian for the successor TruMe
City of Carisbad APPLE Plagf to occur wi
date mutually agreed up^ by LinS^n Fin
Carisbad. This will fg/ilitate the abilif^^f MidAiyerica to process Plan
distributions with minii^al da#^s to Plar^^articipants
12. That the Council dlfrects flft^ transfer of nan pai/cipant's account information
from Lincoln Fina|ncial Advisor^to MidAmafica, y occur within 30 days after July
1, 2012 or a cfete mutua\ agreed upon by l/icoln Financial Advisors and the
City of Cari^ad in order for l\dAmerica to ppcess Plan distribution with minimal
delays
13. That th^ouncil has determined that it i/appropriate for the City to "pick up" the
fee portion of contributions to Vrp APPLE Plan so that each participant of
the /Ian shall make contributions tqfthe Plan on a pretax basis, as permitted
un/er IRS Section 414 (h) (2)
14. ^at the City will implement thfe "pick-up" provisions of IRC Code section
'414(h)(2) by making employ^ contributions to the Plan on behalf of its
employees who are participajrs in such Plan. "Employee contributions" shall
mean those contributions to the APPLE Plan, which are deducted from the salary
of employees and are credited to individual employees' accounts.
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15. That the contributions made by the City to the /K^LE Plan, although designated
as employee contributions, will be paid by th^mployer in lieu of contributions Jpy
the employees who are participants in theXpPLE Plan.
16. That employees shall not have the ogfnon of choosing to receive the coif^tributed
amounts directly instead of havingyfem paid ^yj^^ Qjtv to the APPL/Plan.
17. That the City shall pay to th/APP^'T^n the cont*)utions/iesignated as
employee contributions froijf the same sourcfe^f fuj^s th§^ is used to pay
employees' salary.
18. That the amount of th^ontributions desigKated as emojfbyee contributions and
paid by the City to tl](§ APPL^Klan on^ltehalf or an ei]/plovee shall be the entire
contributions requj/fed of the Ariployee unckr the Pk
19. That the Huma/ ResoJkces Dl^ctor is ajihoriz^d to execute, on behalf of the
City, any adfiitional an\ require3" aocumeris with MidAmerica, Keenan &
Associatesilnd American Umted Life Insur^ce Company (AUL) in furtherance
ofthe pujpose and intent of thisXsolution.
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PASSED, APPROVED AND ADOPTED at a R§jfilar Meeting of the City Council
of the City of Carisbad on the day of
2012, by the following vote:
AYES:
NOES:
ABSENT:
1 RESOLUTION NO. 2012-189
2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, ADOPTING THE CITY OF
^ CARLSBAD ACCUMULATION PROGRAM FOR PART-
A TIME AND LIMITED-SERVICE EMPLOYEES (APPLE)
PLAN TO PROVIDE RETIREMENT BENEFITS IN LIEU OF
5 COVERAGE UNDER SOCIAL SECURITY OR THE
EXISTING LINCOLN FINANCIAL ADVISORS PLAN, AND
6 AUTHORIZING AND DIRECTING THE HUMAN
RESOURCES DIRECTOR TO EXECUTE ALL
V NECESSARY DOCUMENTS
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WHEREAS, Section 11332 of the Omnibus Budget Reconciliation ACT of 1990
("OBRA '90") extends Social Security retirement benefit coverage to employees of state
and local governments who are not covered by a state or local retirement system and
subjects the employer and employee to Federal Insurance Contributions Act ("FICA")
taxes on the employee's wages; and
WHEREAS, OBRA '90 excludes from the requirement of Social Security
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coverage governmental employees who are covered by a compulsory retirement
16 system of a state or local government; and
17 WHEREAS, California Government Code section 53216, et seq., authorizes a
18 governmental employer to establish and fund a pension Plan covering its employees on
a compulsory basis; and
WHEREAS, certain hourly part-time employees of the City of Carisbad are not
currently covered under any other retirement program through the City or the State of
California in lieu of coverage under Social Security, as permitted by OBRA '90; and
WHEREAS, the Council desires to adopt a compulsory retirement Plan, qualified
under section 457 of the Internal Revenue Code of 1986 ("the Code"), for the hourly
25 part-time employees, council-appointed officials and elected officials in lieu of providing
27 coverage under Social Security, as permitted by OBRA '90; and
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1 WHEREAS, the City of Carisbad currently provides a FICA alternative plan to
2 certain houriy part-time employees through the Lincoln Financial Advisors; and
WHEREAS, the Council desires to continue to provide a tax-qualified FICA
alternative plan for said employees, but to replace the existing Lincoln Financial
Advisors Trust with the Accumulation Program for Part-Time and Limited-Service
Employees of the City of Carisbad ("APPLE Plan"); and
WHEREAS, Code section 414(h)(2) permits the City to pick up the employee
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g portion of contributions to a section 457 Plan and to treat them as employer
IQ contributions; and
11 WHEREAS, such "picked up" contributions are not taxable to the employee until
12 distributed; and
WHEREAS, the Council has reviewed the Accumulation Program for Part-time
and Limited-service Employees (the "APPLE Plan") provided by Keenan & Associates.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Carisbad, California, as follows:
1. That the above recitations are true and correct.
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ig 2. That the APPLE Participation Agreement, APPLE Plan Administrative Services
20 Agreement and Unallocated Fixed Contract Application, Acceptance & New
21 Business Agreement referred to in the recitals above are incorporated in this
resolution by reference
3. That the Council hereby adopts the City of Carisbad APPLE Plan to provide
retirement benefits to hourly part-time employees of the City in lieu of coverage
under Social Security and as an amendment to the existing Lincoln Financial
Advisors Plan replacing the Lincoln Financial Advisors Plan in full, to be effective
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id
1 as soon as administratively possible following adoption of this resolution except
2 that the current houriv part-time emplovees shall be given notice and a one-time
opportunitv to elect to continue to participate in Social Securitv. The Human
Resources Director shall be responsible to implement this provision.
4. That the Council hereby designates the City as the Plan Administrator of the
APPLE Plan.
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g 5. That the Council hereby designates the City as the Trustee of the APPLE Plan
9 6. That the Council hereby authorizes MidAmerica Administrative Solutions
10 ("MidAmerica"), to execute, on behalf of the City, the APPLE Plan and any other
documents necessary to carry out the provisions of the APPLE Plan.
7. That the Council hereby authorizes MidAmerica to execute, on behalf of the
Employer, the APPLE Plan and any other documents necessary to carry out the
provisions of the APPLE Plan; to enter into contracts with Keenan & Associates
to provide ongoing administrative consulting sen/ices in connection with the
Ij operation of the Plan; to arrange funding of the Plan through American United
18 Life (AUL); to communicate the Plan to eligible employees of the City; and to
19 perform related services in connection with the APPLE Plan.
8. That the Council hereby terminates the City's participation in the Lincoln
Financial Advisors Plan and removes Lincoln Financial Advisors as the Trustee
of the Plan.
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9. That Keenan & Associates will act as Broker for American United Life Insurance
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25 Company's 3121 Alternative to Social Security program, and provide consultant
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K
1 and broker services for the APPLE Plan as outlined in the Keenan & Associates
2 Service Agreement.
10. That the Council hereby removes Lincoln Financial Advisors as Trust
Administrator and appoints MidAmerica as Third Party Administrator of the
APPLE Plan.
11 .That the Council directs the transfer of the plan assets held by Lincoln Financial
Advisors under the Lincoln Financial Advisors Plan and Trust to AUL, as
9 custodian for the successor Trustee, the City of Carisbad for the benefit of the
10 City of Carlsbad APPLE Plan, to occur within 30 days after July 1, 2012, or a
11 date mutually agreed upon by Lincoln Financial Advisors and the City of
Carisbad. This will facilitate the ability of MidAmerica to process Plan
distributions with minimal delays to Plan Participants.
12.That the Council directs the transfer of plan participant's account information
from Lincoln Financial Advisors to MidAmerica, to occur within 30 days after July
1, 2012 or a date mutually agreed upon by Lincoln Financial Advisors and the
Ig City of Carisbad in order for MidAmerica to process Plan distribution with minimal
19 delays.
20 13. That the Council has determined that it is appropriate for the City to "pick up" the
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2^ 414(h)(2) by making employee contributions to the Plan on behalf of its
27 employees who are participants in such Plan. "Employee contributions" shall
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employee portion of contributions to the APPLE Plan so that each participant of
the Plan shall make contributions to the Plan on a pretax basis, as permitted
under IRS Section 414 (h) (2).
14.That the City will implement the "pick-up" provisions of IRC Code section
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mean those contributions to the APPLE Plan, which are deducted from the salary
of employees and are credited to individual employees' accounts.
15. That the contributions made by the City to the APPLE Plan, although designated
as employee contributions, will be paid by the Employer in lieu of contributions by
the employees who are participants in the APPLE Plan.
16. That employees shall not have the option of choosing to receive the contributed
amounts directly instead of having them paid by the City to the APPLE Plan.
17. That the City shall pay to the APPLE Plan the contributions designated as
employee contributions from the same source of funds that is used to pay
employees' salary.
18. That the amount of the contributions designated as employee contributions and
paid by the City to the APPLE Plan on behalf of an employee shall be the entire
contributions required of the employee under the Plan.
19. That the Human Resources Director is authorized to execute, on behalf of the
City, any additional and required documents with MidAmerica, Keenan &
Associates and American United Life Insurance Company (AUL) in furtherance
of the purpose and intent of this resolution.
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1 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council
2 of the City of Carisbad on the 24*^ day of July 2012, by the following vote to wit:
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AYES: Council Members Hall, Kulchin, Blackburn, Douglas.
NOES: Council Member Packard.
ABSENT: None.
11 MATT HALL, Mayor
ATTEST:
JNE M. WOOD, City Clerk
(SEAL) .<^^?.?l^o^
APPLE PARTICIPATION AGREEMENT
This Services Agreement ("Agreement") is made and entered mto by and between Citv of
Carisbad ("Employer") and Keenan & Associates ("Keenan"), as of July 1, 2012 ("Effective
Date").
RECITALS
WHEREAS, Keenan & Associates ("Keenan") has estabUshed the Accumulation Program for Part-
Time and Limited-Service Employees ("APPLE") which offers public entities a means of funding an
asset accumulation program for their part-time employees;
WHEREAS, MidAmerica Administrative Solutions, Inc. ("Mid.\merica"), is the exclusive provider
u Ai^^"^^""^ ^""^ technical support for the Social Security Alternative plans estabUshed
by Al PLE participants in accordance with the provisions of Section 3121 of the Internal Revenue
Code (hereinafter referred to as the "APPLE Plan");
WHEREAS, Keenan provides certain services to APPLE participants and acts as broker of record
for annuities purchased by APPLE participants; and
WHEREAS, Employer desires to participate in APPLE, and desires to utilize the services of
Keenan.
THEREFORE, IN CONSIDERATION OF the mutual covenants herem contained and for
other good and valuable consideration the receipt and sufficiency is hereby acknowledged it is
mutually agreed as follows: '
AGREEMENT
1. TERM
A. This Agreement shall be for an initial term of one (1) year (the "Initial Term"), beginning
with the execution date of this Agreement, and shall continue from year to year
thereafter (each year a "Successive Term" and, coUectively with the Initial Term, the
"Term"), unless and until terminated by either party hereto upon written notice to the
other in accordance herewith.
2- KEENAN SERVICES AND RELATIONSHIP OF THE PARTIES
A. Employer elects and Keenan shaU provide the services indicated m Exhibit A attached
hereto and incorporated herein.
B. The relationship of Keenan and Employer shaU be that of an independent contractor
and Keenan shaU at aU times remain responsible for its own operational and personnel
expenses. Under no circumstance shaU any employee of one party look to the other
party for any payment or the provision of any benefit, including widiout exception
workers' compensation coverage. Except as may be expressly set forth in or
Keenan & Associates - License #0451271
API'!,I'', Participation Agreement
Confidential I'or lunploycr Use Only
(Rev. ()5/.^l/12)
Pagel of;
K
contemplated by this Agreement, neither part}'^ shaU have the right to act on behalf of the
other, or to bind the other to any contract or other obUgation.
C. In providing the Services, Keenan shaU act exclusively in an advisory and consultative
capacity. Employer shaU at aU times have the right to determine whether to act on or
implement the information, recommendations, and suggestions provided by Keenan,
and the manner by which any such action or implementation shaU be undertaken.
Except for Keenan's responsibUities with respect to funds obtained from or on behalf of
Employer, Keenan shaU not be a fiduciary of Employer.
D. Keenan shaU not provide any legal, tax, or accounting service, advice, or opinion, and the
Services shaU not be interpreted as representing any such service, advice or opinion.
Employer shaU consult its own attorney on aU legal issues and its own tax and
accounting experts on aU tax, accounting, and financial matters relating to its operations,
including without Umitation, the estabUshment, implementation and operation of the
APPLE Plan.
E. In providing its Services, Keenan shaU comply with aU appUcable state and federal laws
and regulations, and obtain and maintain aU necessary Ucenses, registrations, and/or
permits necessary for the performance of its duties under this Agreement.
F. The Services provided to Employer are non-exclusive and Keenan reserves the right to
provide the same or similar services to other Employers who may be in the same
industry, business, or service as Employer.
3. EMPLOYER'S DUTIES AND RESPONSIBILITIES
A. Employer shaU retain decision-making authority for its APPLE Plan, and shaU manage
the day-to-day activities of the APPLE Plan, except for those duties and/or functions
expressly assigned to Keenan under this Agreement or to Keenan under the APPLE
Administrative Services Agreement executed contemporaneously herewith.
B. Employer shaU provide Keenan with timely access to such information and individuals,
including its outside advisors and consultants, as may be necessary for Keenan to
perform the Services. Keenan shaU not be responsible for any delay in its performance
that results from the faUure of Employer, or any person acting on behalf of Employer, to
make avaUable any information or individual in a timely manner.
C. AU information provided to Keenan, either in anticipation of or during the term of this
Agreement, shaU be complete and accurate, and that Keenan may rely upon such
information.
D. Employer shaU execute the Broker of Record Designation attached hereto as Exhibit B.
Keenan & .Associates - License #0451271
.XPPl.f'l Participation Agreement
Confulcntial I'or I'.mployiT Ust' Only
(Rev. 05/.^l/12)
Page 2 of 9
K
/
4. COMPENSATION
A. As Its sole compensation for its Services, Keenan shaU receive commissions from the
annuity carrier as provided in Exhibit C. Employer shaU have no responsibUity for the
payment of any such commission to Keenan. Keenan's annual commissions may be
mcreased from to year in accordance with the mcrease in the Consumer Price Index.
B. Keenan shaU comply with aU appUcable state and/or federal laws and regulations
regarding disclosure of compensation. We embrace industiy efforts for tiransparency and
beUeve it is Unportant that Employers have access to information that may be relevant to
their choice of msurance products, including the cost of such insurance and services,
and, the compensation that may be dUrecdy or mdkecdy paid to Keenan m connection
with the products or sen^ices that are selected. If you have questions regardmg any of
these items or desire additional information, you may contact your Keenan account
representative to discuss this matter m more detaU.
5. INSURANCE
Keenan shaU procure and mamtam during the term of this Agreement the foUowmg
insurance coverages, and shaU provide certificates of msurance to CUent upon CUent's
request.
A- Workers' Compensation: Coverage in conformance with the laws of the State of
CaUfornia and appUcable federal laws;
B. General LiabUity: Coverage (mcluding motor vehicle operation) with a One MUUon
DoUar ($1,000,000) Umit of UabUity for each occurrence and a Two MUUon DoUar
($2,000,000) aggregate Umit of Uability; and
C- Errors and Omissions: Coverage with a One MUUon DoUar ($1,000,000) Umit of
UabUitj^ for each occurrence and a Two MUUon DoUar ($2,000,000) aggregate Umit of
UabiUty.
D. Crime: Coverage with a One MUUon DoUar ($1,000,000) Umit of UabUity for each
occurrence and a Two MUUon DoUar ($2,000,000) aggregate Umit of UabUity.
6. INDEMNIFICATION
If eidier party breaches this Agreement, then the breaching party shaU defend, indemnify and
hold harmless the non-breaching party, its officers, agents and employees against aU claUns,
losses, demands, actions, UabUities, and costs (including, without Umitation, reasonable
attorneys' fees and expenses) arismg from such breach. In addition, if Keenan (i) becomes
the subject of a subpoena or is otherwise compeUed to testifj^ or (U) becomes the subject of a
claUn, demand, action or UabUity brought or asserted by one of CUent's employees. Plan
beneficiaries, or Plan vendors ("Thkd-Party Demand") relating to die Services and such
Keenan & Associates - License #0451271
APPLE Participation .\greement
(^ontidential For Rmplover Use Only
(Rev. 05/.^l/12)
Page ^ of 9
Third-Party Demand is not a direct result of Keenan's negUgence or wiUful misconduct, then
CUent shaU defend, indemnify and hold Keenan harmless from aU losses, payments, and
expenses incurred by Keenan in resolving such Third-Party Demand.
7. LIMITATION OF LIABILITY
Notwithstanding anything to the contrary in this Agreement, in no event shaU either party be
Uable for any punitive damages, fmes, penalties, taxes or any indirect, incidental, or special
damages incurred by the other party, its officers, employees, agents, contractors or
consultants whether or not foreseeable and whether or not based in contract or tort claims
or otherwise, arising out of or in connection with this Agreement even if advised of the
possibiUty of such damage. Keenan's UabiUty under this Agreement shaU further be Umited
to, and shaU not exceed, the amount of its avaUable insurance coverage, but not exceeding
the Umits of coverage outlined in Sectton 5.
8. DISPUTE RESOLUTION
Disputes arising out of or relating to this Agreement shaU first be resolved by good faith
negotiations by representatives from the parties with decision-making authority. If either
party determines that the dispute cannot be resolved through informal negotiation then the
dispute shaU be submitted to non-binding mediation. The site of the mediation and the
selection of a mediator shaU be determined by mutual agreement of the parties. The site of
the mediation shaU be San Diego County, CaUfornia. If the dispute is not resolved through
mediation within sixty (60) days foUowing the first notification of a request to mediate, then
either party shaU have the right to pursue legal action in the State Courts of CaUfornia.
Venue shaU be in San Diego County.
9. TERMINATION
A. This Agreement may be terminated upon the occurrence of any of the foUowing events:
i. By either party without cause or penalty upon ninety (90) days written notice to
the other party;
U. By either party upon the dissolution or insolvency of a party to this Agreement;
iU, By either party foUowing the fiUng of a bankruptcy petition by or against either
party (if the petition is not dismissed within sixty (60) days in the case of an
involuntary bankruptcy petition);
iv. If the appUcation of any law, rule, regulation, or court or administrative decision
prohibits the continuation of this Agreement or would cause a penalty to either
party if the Agreement is continued, and if the Agreement cannot be amended to
conform to such law, rule, regulation, or court or administrative decision in a
Keenan & Associates - Liccn.se #0451271
,\PPLI'! Participation .\grcemcnt
Confidentia! I'or iMTiployor Use Only
(Rev. 05/.^!/12)
Page 4 of 9
manner that would preserve the original intent of the parties with respect to their
rights and duties under this Agreement; or
V. By the non-breaching party if a breach of this Agreement is not cured within
thirty (30) days foUowing receipt of written notice of the breach from the non-
breaching party.
B. Termination of this Agreement shaU terirdnate Employer's participation in APPLE,
and shaU Ukewise terminate the Administrative Services Agreement entered into
between Employer and MidAmerica. Neither Keenan nor MidAmerica (except as
SpecificaUy provided for under the Administrative Services Agreement) shaU be
obUgated to provide any further APPLE service as of the termination date of this
Agreement. It shaU be the sole responsibUity of the Employer to provide, directiy or
through an alternate service provider, the services provided by Keenan and/or
MidAmerica in conjunction with its 3121 Social Security Alternative Plan.
AdditionaUy, the termination of this Agreement and the subsequent termination of
MidAmerica Administrative Services Agreement may result in the termination of the
APPLE group annuity contract. In such event, APPLE Plan assets may be subject to
surrender charges if so stated in the carrier's group annuity contract.
10. GENERAL
A. This Agreement, its recitals and aU exhibits attached to the Agreement contain the entire
understanding of the parties related to the subject matter covered by this Agreement and
supersede aU prior and coUateral statements, presentations, communications, reports,
agreements or understandings, if any, related to such matter(s).
B. This Agreement is made for the benefit of the parties and is not intended to confer any
third party benefit or right. The enforcement of any remedy for a breach of this
Agreement or claim related to the Services may only be pursued by the parties to this
Agreement.
C. No modification or amendment to this Agreement shaU be binding unless it is in writing
and signed by authorized representatives from both parties. Any waiver or delay by a
party in enforcUig this Agreement shaU not deprive that party of the right to take
appropriate action at a later time or due to another breach. This Agreement shaU be
interpreted as if written jointiy by the parties.
D. Any provision determined by a court of competent jurisdiction to be partiaUy or whoUy
invaUd or unenforceable shaU be severed from this Agreement and replaced by a vaUd
and enforceable provision that most closely expresses the intention of the invaUd or
unenforceable provision. The severance of any such provision shaU not affect the vaUdity
of the remaining provisions of this Agreement.
E. Neither party shaU be Uable or deemed to be in default for any delay or faUure in
performance under this Agreement resulting, durectiy or indirectiy, from acts of God,
Keenan & .\ssociatcs - License #0451271
.\PPLI'! Participation Agreement
Confidential i'or Employer Use Only
(Rev. 05/.^l/12)
Page 5 of 9
/{ MLS
civU or miUtary authority, acts of pubUc enemy, war, accidents, fires, explosions,
earthquakes, floods, power outages, faUure of computer systems, machinery or suppUes,
vandaUsm, strikes, or other work interruptions, or any simUar or other cause that is
beyond the reasonable control of either party. Each party shaU make good faith efforts
to perform under this Agreement m the event of any such circumstances, and shaU
resume fuU performance once the cause of the delay has abated.
F. AU notices hereunder shaU be in writUig and sent to the parties at the addresses as set
forth below, or to such other individual or address as a party may later designate. Notices
shaU be sent via personal deUvery, courier service. United States maU (postage pre-paid,
return receipt requested), express maU service, electronic maU, or fax. Notice shaU be
effective when deUvered, or if refused, when deUvery is attempted. Notices deUvered
during non-working hours shaU be deemed to be effective as of the next business day.
Ifthe notice relates to a legal matter or dispute, a copy shaU be sent to:
Keenan & Associates
2355 Crenshaw Blvd., Ste. 200
Torrance, CA 90501
Attn: Legal Department
Fax: (310) 533-0573
G. Neither this Agreement nor Keenan's duties hereunder may 'be assigned without the
prior written approval of Employer.
H. This Agreement may be executed m counterparts and by fax signatures and each shaU be
deemed to be an original.
I. Each person signing this Agreement on behalf of a party represents and warrants that he
or she has the necessary authority to bmd such party and that this Agreement is binding
on and enforceable against such party.
Citv of Carlsbad Keenan & Associates
Signature: Signature:
By:
f /
Matt Hall By: J. Daniel Keenan
Title: Mayor Title: Senior Vice President
Address 1635 Faraday Avenue
Carlsbad, CA 92008 Address 2355 Crenshaw Blvd., Ste. 200
Torrance, CA 90501
Phone: 760-602-2441 Phone 310-212-0363
Fax 760-602-8554 Fax 310-533-1329
Attention Debbie Porter Attention J. Daniel Keenan
Keenan & Associates - License #0451271
.'\PPLJ'; Participation Agreement
(x)nfidcntial For Employer Use Only '2/
(Rev. 05/.31/12) '
AWPHOVEDASTOFORM
^'pAoL •toi>^«i/«if^agc 6 of 9
EXHIBIT A
KEENAN'S SERVICES
Keenan shaU:
Coordinate the ongoing activities of APPLE;
Select vendors to provide products and services to the APPLE program ("APPLE Vendors");
3. Evaluate and review the performance of the APPLE Vendors;
4. In its discretion, remove, replace or change APPLE Vendors;
5. Act as Uaison between Employer and the APPLE Vendors;
6. Act as Broker in securing one or more group annuity contracts for Employer's APPLE Plan(s);
Conduct periodic meetings with Employer to review the status of its APPLE Plan;
Inform Employer of any changes affecting the APPLE program, including, without Umitation,
any change in APPLE Vendors;
9. Coordinate the services of the APPLE Vendors;
10. Assist Employer in the implementing of the APPLE Plan;
11. Provide ongoing consultation to APPLE participants;
12. Work with the APPLE Vendors to resolve any customer service issues;
13. Review communication, sales, marketing and customer service materials prepared by APPLE
Vendors;
14. Assist Employer Ui informing its employees about the avaUabUity of the APPLE Plan; and
15. Assist Employer in providing educational programs about its APPLE Plan,
Keenan & .Associates - License #0451271
.M'PLE Participation .Agreement
f'onfidentiil I'or I'.mployer Use Only
(Rev. 05/.^ 1/12)
Page 7 of 9
EXHIBIT B
BROKER OF RECORD DESIGNATION
This letter confirms that as of July 1, 2012, the organization Usted below ("Employer") has
appointed Keenan & Associates ("Keenan") as the Broker of Record in connection with the group
annuity contract(s) to be issued to Employer as a participant of APPLE.
It is understood and agreed that American United Life Insurance Company ("AUL") is the current
exclusive provider of group annuity products for APPLE Plans.
As long as Employer is a participant in APPLE, it shaU not seek to acquire annuity products directiy
from any insurance carrier or through any other broker for its APPLE Plan.
Keenan is authorized to provide a copy of this letter to AUL, and/or any subsequent APPLE group
annuity provider, to demonstrate Keenan's authority to obtain one or more annuities for Employer's
APPLE Plan. This appointment rescinds any and aU previous appointments Employer may have
made with respect to its APPLE Plan, and shaU remain in fuU force and effect untU Employer ceases
to be a participant in APPLE.
Employer authorizes Keenan to provide representatives of prospective insurers and other coverage
providers with aU information regarding Employer, its operations, employees (i.e., census data) and
financial status as may be necessary for AUL, and/or any subsequent APPLE group annuity
provider, to issue the APPLE group annuity contract to Employer.
Acknowledged and agreed to by:
Citv of Carlsbad Keenan & Associates
Signature: Signature:
fix: r r f I/'
Matt Hall By: J. Daniel Keenan
Title: Mayor Title: Senior Vice President
APPROVED AS TO FORM
Keenan & .Associates - License #0451271
.APPLE Participation Agreement
Confidential I'or I'lmployer Use Only
(Rev. 05/.^1/12)
Page 8 of 9
EXHIBIT C
FEES AND COMMISSIONS*
During the first year of tiie Program, tiie group annuity carrier shaU pay a total commission of 3.0%.
Keenan and MidAmerica shaU each receive half of die total commission (1.5%) paid by die annuity
carrier. The commission shaU be calculated based upon the percentage of total plan deposits made
durUig the first year of-the program.
Beginnmg with the second year of tiie program, tiie carrier shaU pay a "draUer" commission of 0.80%
on accumulated assets in the group annuity contiract and a 3.0% commission on any assets tiiat
tiransfer from any other contiracts that tiie plan may hold. Keenan and MidAmerica shaU each
receive 0.40%. The TraUer commission shaU be calculated based upon the total plan assets
beginnmg in die 13th montii and tiie Transfer commission wUl be based on assets from other plan
contracts as they transfer.
*T:he fees and commissions set forth above reflect the terms of the contracts currently in place between
Keenan and the annuity provider and administrative services provider ('^Vendors")- If, due to circumstances
beyond our control, there is a change in either ofthe Vendors, the fees and commissions set forth above may
be adjusted to reflect the terms of Keenan's agreements with successor vendors.
Keenan & Associates - License #0451271
APPLE Participation Agreement
Confidential For l^mployer Use Only
(Rev. 05/.^!/12)
Page 9 of 9
MidAmerica
Admfnlstr.'itlvc SoluHons. Inc.
:BAPPLE
APPLE PLAN
ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT ("Agreement") is made and entered into on July 1, 2012
by and between. City of Carlsbad, a municipal employer ("Employer"), and MidAmerica Administrative Solutions,
Inc. ("MidAmerica").
RECITALS
WHEREAS, Keenan & Associates ("Keenan") has estabUshed the Accumulation Program for Part-TUne and
Lknited-Service Employees ("APPLE") which offers pubUc entities a means of funding an asset accumulation
program for their part-time employees;
WHEREAS, MidAmerica, is the exclusive provider of administrative services and technical support for the Social
Security Alternative plans estabUshed by APPLE participants in accordance with the provisions of Section 3121 of the
Internal Revenue Code (hereinafter referred to as the "APPLE Plan");
WHEREAS, Employer desires to participate in APPLE and shaU estabUsh and sponsor an APPLE Plan for its part-
time employees; and
WHEREAS, Employer desires now to engage MidAmerica to provide technical support and administrative services
in conjunction with its APPLE Plan.
THEREFORE, IN CONSIDERATION OF tiie mutiial covenants herem contamed and for other good and
valuable consideration the receipt and sufficiency is hereby acknowledged, it is mutuaUy agreed as foUows:
1.00 ENGAGEMENT OF MIDAMERICA
1.01 Engagement of MidAmerica. The Employer hereby engages MidAmerica to provide administrative services
and technical support for the APPLE Plan estabUshed by Employer.
1.02 MidAmerica not a Fiduciary or APPLE Plan Adrmnistrator. It is understood and agreed that MidAmerica is
not a fiduciary or APPLE Plan Administrator within the meaning of ERISA with respect to the APPLE Plan
covered by this Agreement. The services to be performed by MidAmerica shaU be ministerial in nature and
shaU be performed within the framework of poUcies, interpretations, rules, practices and procedures made or
estabUshed by the Employer. MidAmerica shaU not have discretionary authority or discretionary controls
respecting management or investment of the APPLE Plan or any trust fund, and shaU not have any authority
over, nor exercise any control respecting, management, investment or disposition of the assets of the APPLE
Plan or any trust fund, and shaU not render investment advice with respect to any funds or any other property
of any trust fund.
1.03 Independent Contractor. It is understood and agreed that Mid/\merica wUl perform services under this
Agreement as an independent contractor and not as an employee. Neither the Employer nor any of its officers
or employees shaU have any control over the manner by which MidAmerica performs this Agreement and shaU
only dictate the results of the performance. Midi\merica shaU use its best efforts to Unplement such written
MidAmerica Service Agreement
APPLE
Confidential for Client Use Only
(Rev 04/01/11) Page 1 of 10
instructions, if any, as to poUcy and procedures which may be given by tiie Employer to MidAmerica provided
that such mstiructions are consistent and compatible with tiie description of services to be performed by
MidAmerica and do not violate or contradict any appUcable state or federal laws or regulations, mduding, but
not Umited to, tiie Employee Retirement Income Security Act of 1974, as amended ("ERISA"). MidAmerica
shaU not represent tiiat MidAmerica or its agents, employees or independent condractors are agents or
employees of tiie Employer. Except as die Employer may specify m writing, MidAmerica shaU have no
authority express or impUed, to act on behalf of the Employer m any capacity whatsoever as an agent.
MidAmerica shaU have no autiiority, express or rnipUed, pursuant to this Agreement, to bmd die Employer to
any obUgation whatsoever.
2.00 SERVICES TO BE PERFORMED BY MIDAMERICA
2.01 <^.r.r\r.^ tn he Performed. MidAmerica shaU perform tiie foUowmg technical support and admmisti:ation
service functions in conjunction witii tiie operation of Employer's APPLE Plan:
(a) APPLE Plan InstaUation and Mamtenance Services;
(b) APPLE Plan RecordkeepUig, Distributions, and Reportmg Services;
(c) APPLE Plan Documentation Services, as requked;
(d) CompUance Senrices, as required per APPLE Plan; and
(e) Notwithstanding die foregoing, each Valuation Period shaU conclude not later tiian 90 days after
MidAmerica's receipt of the APPLE Plan data from tiie Employer as provided for m tiie APPLE Plan.
2 02 Administration Offices. MidAmerica shaU mamtam and operate administiration offices and computer software
and systems necessary for data processmg as part of die services required to be performed by it hereunder and
shaU pay aU normal costs and expenses for such mamtenance and operation except as set fortii herem.
MidAmerica shaU employ a sufficient staff of employees or otiiers to provide die sennces to be performed by
MidAmerica hereunder. MidAmerica shaU provide a toU free number for customer services durmg normal
busmess hours, as defmed by die Employers' geographic location and time zone, and a website for customer
and Employer mquiries, 24 hours a day, 7 days a week, (except for those brief periods when die system s data
are refreshed).
2 03 Records and FUes. MidAmerica shaU maintam aU records deUvered to it by die Employer or produced by
MidAmerica m conjunction witii tiie services required to be performed by it hereunder. The confideritiaUty of
such records shaU be mamtained by MidAmerica and such records and die mformation tiierem shaU not be
disclosed or made avaUable to persons odier than tiie Employer unless so dkected in wnting by the Employer,
except:
(a) pursuant to an order of a court, arbjtirator, or otiier tiribunal;
(b) upon request of a state or federal governmental agency; ^ r»r,T
(c) upon the request of an mdividual participant and then only to the extent of his mterest m the API LE
Plan; or
(d) as necessary to enforce MidAmerica's rights hereunder.
AU records, documents and information coUected and/or mamtamed by MidAmenca m the course of its duties
hereunder shaU be made accessible to botii the Employer and to die Employer's designates, die APPLE Plan s
consulting company, MidAmerica & Associates, for purposes of mspection, reproduction and audit, upon
reasonable notice. The cost of tiiis activity wUl be at tiie Employer's expense only if tiie mformation is bemg
requested by the Employer and has previously been provided to the Employer. If any participant history is
MidAmerica Service Agreement
APPLE
Confidential for Client Use Only
(Rev 04/01/11) Page 2 of 10
2.04
2.05
requested, which has been previously provided to the Employer, or if the request is not in a standard format
normaUy provided by MidAmerica, then the Employer shaU pay aU costs incurred by MidAmerica Ui providing
such history, mcluding the cost of computer programming, computer charges, copying charges and maiUng
costs. MidAmerica shaU be entitied to retain copies of any such records and Uiformation at its own expense.
In the event of the termination of this Agreement, upon written request, MidAtnerica shaU deUver to the
Employer, at a tUne period mutuaUy agreeable but not to exceed 90 days from date of termination, the
information and records maintained by it on aU APPLE Plan participants. If, simultaneously with or foUowing
the termination of this Agreement, additional Uiformation is requested by the Employer that has previously
been provided to the Employer or is in a format that is not MidAmerica's standard reportUig format, the
Employer shaU pay aU costs incurred by MidAmerica m providing such Uiformation, Uicluding the cost of
computer programming, computer charges, copying charges and mailing costs. MidAmerica shaU be entitied
to retain copies of any such records and information at its own expense.
Professional Services for Employer. Neither MidAmerica, nor any of its employees, agents or representatives
shaU provide legal or tax advice or provide any service which would be considered the practice of law. The
Employer hereby acknowledges that it wiU not rely on any information provided as if it were legal or tax
advice. MidAmerica wiU not provide or be responsible for the expense and cost of legal counsel, actuaries,
certified pubUc accountants, investment counselors, investment analysts or others providUig sUnUar types of
services performed expUcitiy for and on behalf of the Employer, and MidAmerica shaU not be authorized to
engage such services or Uicur any expense or cost therefore without the written consent of the Employer. In
the event that such services are engaged by MidAmerica upon written request of the Employer, the Employer
shaU be solely responsible for such services and the cost and expense thereof
CompUance with Laws. In providing its services, MidAmerica shaU comply with aU appUcable state and federal
laws and regulations, and obtaUi and maintain aU necessary Ucenses, registrations, and/or permits necessary for
the performance of its duties under this Agreement.
3.00 SERVICE FEES
3.01 Payment MidAmerica shaU share Ui the commissions paid by the annuity carrier as set forth Ui Exhibit C of
the APPLE Participation Agreement, executed contemporaneously with this Agreement. In the event that the
CUent's APPLE Plan has 250 or more participants, MidAmerica's standard AdmUiistrative Fee wUl be waived.
In the event that CUent's APPLE Plan has fewer than 250 participants, MidAmerica shaU receive a monthly
Administrative Fee of $0.75/per participant to cover the services provided under the Agreement. The
administrative fee shaU be deducted by the group annuity carrier from the account of each participant.
MidAmerica shaU not look to Employer for the payment of the administrative fees.
3.02 Other Services. If Employer requests services beyond those described in this Agreement, MidAmerica shaU
consider the request and shaU inform Employer whether or not it can accommodate the request. If
MidAmerica agrees to perform such services, they shaU be biUed to the Employer in accordance with
MidAmerica's then-current fee schedule.
4.00 DUTIES OF THE EMPLOYER
4.01 Prior APPLE Plan Documentation. If appUcable, the Employer shaU provide MidAmerica with prior copies
of the APPLE Plan, executed APPLE Plan Document, Summary APPLE Plan Description, and aU
amendments thereto to enable MidAmerica to properly review the APPLE Plan document to comply with
federal regulations.
MidAmerica Service Agreement
APPLE
Confidential for Client Use Only
(Rev 04/01/11) Page 3 of 10
K .Mt.s
4 0'> APPLE Plan Data. The Employer shaU provide MidAmerica mform.ation and data on a timely basis as is
necessary to enable MidAmerica to carry out its duties and obUgations under this Agreement, and such
information and data wUl be provided m a format as is reasonably requested by MidAmerica. For this purpose,
"APPLE Plan Data" shaU mean aU data and records suppUed to MidAmerica, obtamed by MidAmenca or
produced by MidAmerica m connection witii performance of the services pursuant to this Agreement.
MidAmerica reserves tiie right to assess additional charges for unacceptable data format or missmg or
maccurate data for time and expenses mcurred to correct die data. MidAmerica shaU not be Uable for any
error or action tiiat is the result of its reUance on mcomplete or maccurate data provided by the Employer or
any of its agents or representatives.
4 03 Onpr^tional Changes. The Employer hereby agrees to consult with MidAmerica, and/or notify MidAmerica in
writing as to any benefits or operational changes or procedures in the APPLE Plan tiiat may affect the
compUance of the APPLE Plan with appUcable laws and/or regulations or MidAmerica's mternal processmg
for die admmistration of the APPLE Plan. AU such changes shaU be reviewed by MidAmenca for IRS
compUance pursuant to the terms of this Agreement.
4 04 APPLE Plan Dornment Amendments. Employer furtiier agrees to make changes m benefits or operations
only pursuant to tiie APPLE Plan Document, or as may be appropriately written by amendment to the
APPLE Plan Document upon consultation witii MidAmerica.
4 05 Le.pal Counsel. The Employer shaU review with Us legal and/or tax counsel aU documents provided to it by
MidAmerica. The Employer understands that it should consult tax and/or legal counsel on any questions
concerning the Employer's responsibUities under this Agreement, die APPLE Plan documents, and tiie legal
sufficiency of any documents so provided.
4 06 Review MidAmerira Materials ^nd Documents. The Employer shaU review aU forms, poUcies and procedures
developed by MidAmerica for the APPLE Plan and approve such items or instiruct MidAmenca as to required
changes.
5.00 AUTHORITY OF THE EMPLOYER
5 01 Sponsor. It is understood and agreed that tiie Employer is a fiduciary, APPLE Plan Sponsor, or APPLE Plan
Admmistirator under the APPLE Plan. The term "APPLE Plan Sponsor" shaU be defmed to mclude and
mean the "APPLE Plan Sponsor" as defmed m ERISA and the "APPLE Plan Admmistirator" as defmed m
ERISA if an APPLE Plan Admmistirator is designated in the APPLE Plan documents, whether or not the
\PPI E Plan is subject to ERISA. The APPLE Plan Sponsor, or APPLE Plan Admmistirator if designated,
shaU mclude, where appUcable, the Employer sponsormg the APPLE Plan or APPLE Plan Committee or
Trustees of die Trust sponsormg the APPLE Plan who serve at the time of execution of this Agreement, and
shaU also mclude committee members or tiaistees servmg from time to time during the Term of this
Agreement. MidAmerica shaU be entitied to rely upon the actions, notice or mstiructions taken or given by the
APPLE Plan Sponsor
5 02 ni.rreHonarv Authority. The Employer shaU estabUsh poUcies, rules, practices and procedures m conjunction
with the APPLE Plan and shaU have discretionary authority or discretionary contirols respecting management
or mvesttnent of the APPLE Plan or any tirust fund when appUcable, and shaU have authority to exercise any
contirol respecting management, mvesttnent or disposition of tiie assets of the APPLE Plan or any tirust fund
when appUcable.
MidAmerica Service Agreement
APPLE
Confidential for Client Use Only
(Rev 04/01/11) Page 4 of 10
K MluS
5.03 Interpretation of the APPLE Plan. The Employer shaU have die exclusive and final authority to interpret the
terms of the APPLE Plan and shaU advise MidAmerica of any interpretations made by it.
5.04 Distribution Authority. The Employer shaU consider, to the extent it deems appropriate, any appeal from an
initial denial of account balances made by MidAmerica under the APPLE Plan. Any determination made by
the Employer shaU be final and conclusive on the participant involved and MidAmerica. To the extent that
any such determination involves the interpretation of the APPLE Plan, MidAmerica may rely on such
determination in implementing the terms of such provision thereof
5.05 Right to Appoint Duties. The Employer may perform its duties hereunder either directiy or through the
appointment of a person, firm or committee, provided, however, that the Employer shaU notify MidAmerica
in writing of the appointment of any person, firm or committee to fulfiU any of the foregoing obUgations and
of any change therein.
6.00 OBLIGATIONS OF MIDAMERICA
6.01 APPLE Plan Funding. MidAmerica shaU have no responsibiUty, risk, UabiUty or obUgation for the funding of
the APPLE Plan, which shaU be solely and totaUy the responsibiUty of the persons, entities, or participants so
provided in the APPLE Plan. MidAmerica shaU perform the services specificaUy set forth in this Agreement
and no others without the prior written consent of the Employer.
6.02 APPLE Plan Enforcement. MidAmerica shaU have no responsibiUty or obUgation to take action, legal or
otherwise, against any employer, employees, APPLE Plan participants or other person to enforce provisions of
the APPLE Plan. In the event the Employer desires to engage the services of MidAmerica for such purposes,
such services shaU be engaged and rendered only pursuant to a separate written agreement between the parties.
6.03 Investment of Assets.
6.04
(a) Investment Records. MidAmerica shaU not be responsible or obUgated for the Uivestment of any assets
of the APPLE Plan; however, MidAmerica shaU prepare and maintain records of the investment of the assets
or funds of the APPLE Plan if the Employer requests MidAmerica to do so and provides the information and
documents necessary to prepare and maintain such records pursuant to paragraph 5.03.
(b) Investment Services. MidAmerica shaU provide ministerial investment aUocation services and shaU not be
responsible for or Uable for any loss or gains therefrom except as a result of MidAmerica's faUure to
Unplement written dkections from the Employer or the APPLE Plan participants.
Participant Distributions. MidAmerica shaU process disttibutions in accordance with the APPLE Plan or
poUcies adopted by the Employer. MidAmerica shaU incorporate sound business practices and be responsible
for reasonable internal audits. Where an error is discovered, MidAmerica shaU use reasonable efforts for
recovery of any loss therefrom, but wiU not be required to initiate legal process for any such recovery.
Notwithstanding the above, MidAmerica may institute such proceedings as it deems necessary to recover any
obUgations owed to the APPLE Plan by a participant, former participant or any other person or entity, even if
the Agreement has been terminated, provided that such obUgations were incurred prior to the termination of
the Agreement. Any such recovery (after termination of the Agreement) shaU be the exclusive property of the
APPLE Plan and shaU be returned to the Employer at the time of receipt of such recovery by MidAmerica.
MidAmerica Service Agreement
APPLE
Confidential for Client Use Only
(Rev 04/01/11) Pages of 10
K MLS
6.05 P^rtir.ipant EUgibUity. MidAmerica shaU not be responsible for determmmg the participants' eUgibUity to
participate in the APPLE Plan and shall rely on ti.e mformation suppUed by the Employer in determimng
eUgibihty.
6.06 Agent LiabUity. MidiVmerica may perform its services by or tiirough mdependent conttactors such as
attorneys, agents, or receivers and shaU be entitied to advice of counsel concernmg aU legal questions and its
duties hereunder.
6.07 ReUance on Employer DUrections. MidAmerica shaU use its best efforts to Unplement the written dkections of
die Employer and participants, when appUcable, in admUiisterUig the APPLE Plan, provided that such
dkections do not violate or contiradict the terms of the APPLE Plan, any laws or regulations, mcludmg, but
not Umited to, ERISA, masmuch as die APPLE Plan is subject to ERISA. Notwitiistandmg the foregoing,
upon advismg the Employer of any such conttadiction or violation, MidAmerica may accept and rely on the
Employer's provision of such dkections as thek representation that such dkections comply with appUcable law
and the APPLE Plan's terms.
6.08 Reliance on Documentation. MidAmerica shaU mcur no UabUity in actkig or proceedmg m good faith upon
any resolution, request, consent, waiver, certificate, statement, salary reduction agreement, contiribution
election form, maxknum annual conttibution form, participant mvesttnent dkections, or any other paper or
document prepared and furnished to MidAmerica in accordance witii tiie APPLE Plan(s) or titis Agreement,
that it, m good faith, reasonably beUeves to be genukie. MidAmerica may accept and rely upon any such paper
or document as conclusive evidence of the tmtii and accuracy of such statements and shaU not be requked to
investigate any matters contakied in any such paper or document.
6.09 Good Faith Judgment. MidAmerica shaU not be Uable for any error or judgment made m good faith by it or
any of its agents or employees unless it is proved that MidAmerica was negUgent ki ascertaUimg the pertinent
facts.
6.10 APPLE Plan CompUance. MidAmerica shaU provide supportmg detaU for the APPLE Plan Admmistirator to
monitor compUance of the APPLE Plan and wUl endeavor to advise die Employer of any changes tiiat may be
requked by law, mle or regulation. The Employer shaU be responsible for Unplementing such advice, except to
the extent that such responsibiUty has been expressly undertaken herem by MidAmerica.
6.11 Financial LiabUiU^. MidAmerica shaU have no responsibUity, UabUity or obUgation to pay any taxes, Ucenses, or
fees levied by any local, state or federal authority in connection with the operation of the APPLE Plan.
6.12 Conflict Between Agreement and APPLE Plan. No provision of this Agreement shaU requke MidAmerica to
take any action that, in the judgment of Midj\merica, would confUct with any mle or law or with the provisions
of any APPLE Plan. If, based on changes in the appUcable regulatory sttructtire or the interpretation of the
regulatory stt^cture, there is a reasonable UkeUhood that any service to be provided by MidAmerica under this
Agreement shaU be deemed to confUct with the APPLE Plan or shaU be deemed to be unlawful, tiien
MidAmerica shaU, after providing express wrkten notification to tiie Employer, decUne thereafter to provide
that service, or shaU amend the Agreement to resttructure the service upon reasonable notice to tiie Employer.
FaUure to provide any such service from and after such notice shaU not constitute a breach of MidAmerica's
obUgations under this Agreement pursuant to paragraph 6.12 hereki.
6.13 ConfidentiaUt\\ ConfidentiaUty of aU APPLE Plan Data shaU be maintamed by MidAmerka and such
information shaU not be disclosed except as provided Ui paragraph 2.03.
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7.00 INSIJRANCE
7.01 TWiirement of Insurance. MidAmerica shaU procure and maintain durmg the term of this Agreement the
foUowmg msurance coverages, and shaU provide certificates of msurance to CUent upon CUent's request.
a. Workers' Compensation: Coverage m conformance with tiie laws of tiie State of CaUfornia and
appUcable federal laws;
b. General LiabUity: Coverage (mcludmg motor vehicle operation) witii a One MUUon DoUar
($1,000,000) Umit of UabUity for each occurrence and a Two MUUon DoUar ($2,000,000) aggregate Umit
of UabiUty; and
c. Errors and Omissions: Coverage with a One MUUon DoUar ($1,000,000) Umit of UabUity for each
occurrence and a Two MUUon DoUar ($2,000,000) aggregate Umit of UabUity.
d. FideUty Bond: Coverage with a One MUUon DoUar ($1,000,000) Umit of UabUity for each occurrence
and a Two MUUon DoUar ($2,000,000) aggregate Umit of UabUity.
8.00 INDEMNIFICATION
8.01 ObUgation to Indemnify. If either party breaches this Agreement, then the breachkig party shaU defend,
mdemnify and hold harmless die non-breachmg party, its officers, agents and employees agamst aU clakns,
losses, demands, actions, UabUities, and costs (mcludmg, widiout Umitation, reasonable attorneys' fees and
expenses) arismg from such breach. In addition, if MidAmerica (i) becomes die subject of a subpoena or is
otherwise compeUed to testify or (U) becomes tiie subject of a clakn, demand, action or UabUity brought or
asserted by one of CUent's employees, Plan beneficiaries, or Plan vendors ("Thkd-Party Demand") relating to
tiie Servkes and such Thkd-Party Demand is not a dkect result of MidAmerka's negUgence or wUlftil
misconduct, then CUent shaU defend, kidemnify and hold MidAmerica harmless from aU losses, payments, and
expenses mcurred by MidAmerica in resolvkig such Thkd-Party Demand.
9.00 LIMITATION OF LIABILITY
9.01 Lknitation. Notwithstanding anything to the conttrary ki tiiis Agreement, in no event shaU either party be Uable
for any punitive damages, fines, penalties, taxes or any mdkect, incidental, or special damages incurred by die
other party, ks officers, employees, agents, conttactors or consultants whether or not foreseeable and whetiier
or not based m contiract or tort claUns or otiierwise, arismg out of or m connection with tiiis Agreement even if
advised of the possibUity of such damage. MidAmerica's UabUity under this Agreement shaU further be Umited
to, and shaU not exceed, the amount of its avaUable insurance coverage, but not exceedmg die Umits of
coverage outUned in Section 7.
10.00 DISPUTE RESOLUTION
Disputes arising out of or relating to this Agreement shaU first be resolved by good faith negotiations between
representatives of the parties with decision-makmg authority. If eidier party deternUnes that the dispute
cannot be resolved tiirough mformal negotiation tiien tiie dispute shaU be submitted to non-bindmg
mediation. The site of the mediation and die selection of a mediator shaU be determmed by muttial agreement
of die parties. The site of die mediation shaU be San Diego County, CaUfornia. If the dispute is riot resolved
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through mediation within sixty (60) days foUowmg the &st notification of a request to mediate, then either
party shall have the nght to pursue legal action m the State Courts of CaUforma. Venue shaU be m San Diego
County.
An^Yori« or other communication required or permitted hereunder shoU be in writing and shaU be deUvered
oersonaUy sent by facsimile, electronic transtnission, by certified, registered or express maU. Any such notice
ShaU be deemed given when deUvered personaUy, by facsimile, or electronic transmission upon the recipients
oral verification by telephone of receipt, or if maUed, five days after the date of deposit m the U.S. maU with
postage prepaid and duly addressed to the party to be notified, or by proof of receipt by certified, registered or
express maU.
Notice shaU be made to die Employer as foUows:
City of Carlsbad
1635 Faraday Avenue
Carisbad, CA 92008
Attn: Debbie Porter
Notice shaU be made to MidAmerica as foUows:
MidAmerica AdtrUnistrative Solutions, Inc.
211 East Mam Stireet, Suite 100
Lakeland, Florida 33801
Telephone: (863) 688-4500
Attn: J. Wesley Compton
With a copy to:
Keenan & Associates
2355 Crenshaw Blvd., Suite 200
Torrance, CA 90501
Attn: Dan Keenan
Fax: (310) 533-1329
12.00 TERM AND TERMINATION
12 01 Term This Agreement shaU be for an mitial term of one (1) year(s) (tiie "Initial Term"), begmnmg with the
;;;;^tion date of this Agreement, and shaU continue from year to year thereafter (each year a Successive
Term" and coUectively with the Initial Term, tiie "Term"), unless and until terminated by either party hereto
upon written notice to tiie other m accordance herewitii. Notwitiistandmg the foregomg, this Agreement shaU
not become effective unless and until properly countersigned by an authorized officer of MidAmenca.
12.02 Right to TermUiate. This Agreement may be termmated upon the occurrence of any of die foUowmg events:
a. By either party upon ninety (90) days' prior written notice to the other party ("Termmation Notice");
By either party foUowing dissolution, msolvency, or the fUing of a bankmptcy petition by or agamst
either party (if the petition is not dismissed within sixty (60) days m the case of an involuntary
bankruptcy petition);
If the appUcation of any law, mle, regulation, or court or administirative decision prohibits the
continuation of tius Agreement or would cause a penalty to either party if the Agreement is continued,
and if die Agreement cannot be amended to conform to such law, rule, regulation, or court or
administirative decision m a manner that would preserve the origmal mtent of the parties witii respect to
thek rights and duties under this Agreement; or
b.
c.
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d. By the non-breaching-party if a breach of this Agreement is not cured witiiki thirty (30) days foUowmg
receipt of written notice of the breach from die non-breachmg party.
12 03 A..onr.t Valuations. Notwithstandkig anything m this Agreement to the contrary, where Termmation of this
Agreement occurs between Valuation Periods, MidAmenca shaU complete mid-period valuations of accounts
prior to the date of Termmation and provide such mid-period valuations of accounts and copies of aU relevant
records to the successor or die Employer as the Employer shaU direct Where Termmation of this Agreement
occurs during eitiier Valuation Period, MidAmerica shaU be obUgated to complete the va uatton prior to
Termmation and provide such valuation, to tiie successor or the Employer as the Employer shaU direct.
12 04 P<.rlv Termination Fee. In tiie event that Employer terminates tiiis Agreement pursuant to Section 12.02 (a)
MidAmerica reserves the right to charge an Early Termmation Fee to cover administiratton expenses incurred
UP to the date of termination. The Early Termmation Fee shaU not include any fees for Termmatton Services,
such as mid-period valuations of accounts, copies of records, or any other termmation services necessary to be
provided to a successor thkd party admkksttrator. Fees for these services shaU be bUled as ttme and expenses
Uicurred m accordance with MidAmerica's then-current fee schedule. Early Termmatton Fees, if any, wUl be
the responsibUity of the Employer.
12 05 Fff.rt of Termmation. Termmation of tiiis Agreement shaU termmate Employer's participation m APPLE,
and shaU Ukewise termkiate die APPLE Participation Agreement entered mto between Employer and Keenan.
Except as provided under Section 12.03, neidier MidAmerica nor Keenan shaU be obUgated to provide any
further APPLE servke as of die termmation date of tiiis Agreement It shaU be tiie sole responsibUity of the
Employer to provide, dkectiy or tiirough an altemate servke provider, die services provided by Keenan
and/or MidAmerka m conjunction witii its 3121 Social Security Altemative Plan. AdditionaUy, the
termmation of tiks Agreement and die subsequent termmation of MidAmerka Admimstirative Services
Agreement may result ki the termmation of the APPLE group annuity contiract. In such event, APPLE 1 Ian
assets may be subject to surrender charges if so stated m die carrier's group annuity contiract.
13.00 MISCELLANEOUS
13 01 Nnrnntinuinp Waiver. FaUure of either party to enforce at any time any of tiie provisions of this Agreement
shaU in no way be constirued to be a waiver of such provision or m any way affect die vaUdity ot this
Agreement or any part thereof, or the right of such party to thereafter enforce each and every provision of this
Agreement. No waiver of any breach of this Agreement shaU be held to be a waiver of any other or
subsequent breach.
13 02 Governmg Law. The terms and conditions of this Agreement shaU be mterpreted and contiroUed by the laws
of die State of CaUfornia appUcable to contiracts executed and to be whoUy performed withm said State, msotar
as state law is appUcable under the terms hereof
13 03 Third Party Rights. Notiikig contamed m this Agreement, express or UnpUed, is mtended to confer, or shaU
confer, upon any mdividual participant m or beneficiary under the APPLE Plan, or any otiier person or entity,
any rights or remedies under or by reason of this Agreement.
13 04 Rindmg Effect, This Agreement shaU be bmding upon and mure to die benefit of the parties hereto and thek
respective heks personal representatives, successors and permitted assigns. Without Umiting the foregomg, it
the Employer is a tirustee, board of tirustees, or committee, tius Agreement shaU be bmdmg on such ttustee or
MidAmerica Service Agreement
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members of such board or committee serving at the time of execution or at any subsequent time during the
term of this Agreement.
13.05 Assignment. Neither this Agreement nor MidAmerica's duties hereunder may be assigned without the prior
written approval of Employer.
13.06 SeverabiUty. Should any part of this Agreement be declared UivaUd, any remaining portion shaU remain in fuU
force and effect as if this Agreement had been executed with the invaUd portion eUminated.
13.07 Modification of Agreement. This Agreement, including any Exhibits references herein or attached hereto, may
not be modified, changed or additions made, without putting the modifications, changes or additions in writing
and having both parties to this Agreement sign such writing. This Agreement shaU supersede any existing
Administtation Agreements between the parties below. This Agreement contains the entire agreement of the
parties hereto with respect to the subject matter hereof, and there are no other agreements or understandings
except as may be expressly stated herein.
13.08 Prohibited Interests. No officer or employee of the Employer shaU have any dkect fmancial interest in this
Agreement. This Agreement shaU be voidable at the option of the Employer if this provision is violated.
13.09 Signatures. This Agreement may be executed in counterparts and by fax signatures and each shaU be deemed
to be an original.
13.10 Authority. Each person signing this Agreement on behalf of a party represents and warrants that he or she has
the necessary authority to bmd such party and that this Agreement is binding on and enforceable against such
party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written
above.
City of Carlsbad ^ MidAmerica Administrative Solutions, Inc.
Signature: ^^mfw^— Signature:
By: w w t WW
Matt Hall By:
Title: Mayor Title: J. Wesley Compton
Address: 1635 Faraday Avenue Address: 211 East Main Street, Ste. 100
Carlsbad, CA 92008 Lakeland, Florida 33801
Telephone: (760) 602-2441 Telephone: (863) 688-4500
Fax: (760) 602-8554 Fax: (863) 686-9557
Attention: Debbie Porter Attention: Attn: J. Wesley Compton
APPROVED AS TO FORM
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Unallocated Fixed Contract Application, Acceptance, & New Business Agreement
American United Life Insurance Company® Version LO -04/2008
P. O. Box
Indianapolis, Indiana 46206-0368
Contract Number Contract Effective Date J^^V 2012
Contract Suffix Number Plan Sponsor's State of Domicile CA
The Proposed Contractholder identified below hereby applies to American United Life Insurance Company (AUL) for the Group
Annuity Contract Number identified above. This completed form must be approved by the AUL Corporate Office before a group
annuity contract will be issued.
Contract Type:
^ Unallocated Fixed-Only (15FP)
Select Governmental or Non-Governmental Plan Sponsor (select only one):
]55 Govemmental (non-registered) • Private Sector (registered)
Select Plan Type (select only one):
P (1) 3121 or Special Pay 401 (a) • (3) 3121 or Special Pay or Employer-Sponsored 401 (a)/403(b) M (7) 3121
457(b) • (R) HRA Trust/VEBA • (S) HSA • (T) GASB 45 OPEB TmstA^EBA
Select Product Type (select only one):
• EO DEI URl ^EOB DEIB • R2B
Select Business Type (select only one):
• Start-up ^ Takeover
General Information
Proposed Contractholder: City Of CaflSbaCl
Employer's Identification Number (EIN): 95-6004793
Executive Contact: Dobbie POfter Phone # : 760-602-2441 Fax # : 760-602-8554
Executive Contact's Address: 1635 Faraday AvGiiue, Carlsbad, CA 92008
Executive Contact s Email Address: debbie.porter@carlsbadca.gov
Administrative Contact: 760-602-2443 Phone #:760-602-2443 Fax #: 760-602-8554
Administrative Contact's Address: 1635 Faraday Avepue, Carlsbad, CA 92008
Administrative Contact's Email Address: Fernanda.liasse(gcarlsbadca.gov
Producer Information
Primary Producer: J. Daniel Keenan Primary B/D: N/A
Primary Producer Address: 2355 Crenshaw Blvd., Suite 200, Torrance, CA 90501
Primary Producer Email Address: dkeenan(gkeenan.COm
Primary Phone: 310-212-0363 ext 3600 Primary Fax: 310-533-1329
3^1
TPA Information
MidAmerica, Administrative & Retirement Solutions, Inc.
211 East Main Street, Suite 100
Lakeland, FL 33801
800.430.7999
Investment Option Selection
The AUL Fixed Interest Account(FlA) (12) will be the only annuity investment option made available.
Withdrawal Charge (presently approved in California only)
A Withdrawal Charge will not be applied under this contract, with one exception. A 5% Withdrawal Charge wi" be
^Z^edlic^^^^^^ termination to any FIA monies that are paid out at the Contractholder's direction m a lump-sum rather
than in 5 equal annual installments.
Summary of Billable Expenses
Currently, there are none.
Contract Termination Provisions
IJt^on temiination ofthe contract, the FIA Withdrawal Value must be taken in 5 equal annual installments. A cash lump-
Xay37monls invested in the FIA is not an available option. This restriction applies to all Contnbution sources.
AUt Recordkeeping/Administrative Services Agreement
The Proposed Contractholder hereby requests only investment recordlceeping for assets held in the applied-for Contract
and does not request any other recordl<eeping or administrative services. AUL will only mamtam recordkeeptng of as ets
at a contracVan-level Furthermore, AUL will not be providing statements, confirmations, or any other reporting to the
Contractholder.
The Proposed Contractholder hereby acknowledges and agrees that, as Plan Fiduciary, it has the sole responsibility for
assuring that the Plan complies with all applicable state and federal law, including ERISA, the Intemal Revenue Code,
and securities laws, both in form and in operation.
The Proposed Contractholder hereby acknowledges and agrees that MidAmerica Administrative & Retirement Solutions,
Ic IsThe Third Party Administrato; (TPA) and Plan Administrator, and that, other than in th,s Unallocated Con ract
App catfon, Accepmnce, and Agreement form, AUL shall accept direction and instructioris regardmg both the Pbn and
The Contraci only from MidAmerica, and shall not accept direction and instructions d.rectly from the Contractholder.
Facsimile/Electronic Media Acceptance Agreement
Instructions provided to AUL and its agents to execute, cancel, or otherwise proceed with transactions '"-^'"ding those
elated to. but not limited to, enrollments, loan applications, distributions, and correspondence w.ll be accepted v,a
facsimile copy, or via other electronic media. This agreement does not include retirement plan adoption agreements,
gmu"an™iTcontracts, amendments thereto, the annual census, and Notice, Election & Release or Contract Settlement
Agreement documents.
This agreement includes instructions from the TPA, Plan Sponsor, Plan Administrator, and/or Contractholder The
Contractholder and TPA will indemnify and hold harmless AUL for all claims, losses, liabi ities and expenses, includmg
S fees and expenses, resulting from any action taken or not taken by AUL In good faith in accordance with this
agreement.
Preliminary Agreement for the Group Annuity Contract
(1) Upon the date a contribution is made to the Contraci following the Proposed Contractholder's receipt ofthe Contract
(but no earlier than 60 days after the Contract Date of Issue), if AUL does not receive a signed acceptance ofthe
Contract at its Corporate Office by that date, the Proposed Contractholder shall be deemed to have accepted the
Contract and any accompanying amendment to the Contract by the making of such contribution. The Contract and
any accompanying amendment shall be effective as of the effective dates shown on the Contract and amendment.
(2) Ifthe Contract is not accepted or deemed accepted, and if the Proposed Contractholder notifies AUL at its
Corporate Office in writing that it will not accept the Contract, the following amount shall be paid in a single sum to
the Proposed Contractholder on a mutually agreed-upon date: any contributions to the Contract which have been
allocated to AUL's general asset account, plus interest credited Ihereon as determined pursuant to the Contract, which
remain in AUL's general asset account as of such date of payment. AUL shall make such payment only upon receipt
at its Corporate Office of a proper form signed by the Proposed Contractholder and, if applicable, by the employer
sponsoring the retirement plan for which the Contract is to be a funding vehicle, releasing AUL, its agents, and its
employees from any and all liability arising out of such payment by AUL,
(3) This Preliminary Agreement shall terminate when:
(A) the signed Contract acceptance is received by AUL at its Corporate Office; or
(B) the Contract is deemed accepted under Section (1) above; or
(C) payment is made by AUL pursuant to Section (2) above.
Electronic Contribution Processing and Employee Data Gathering
The Employer/Plan Sponsor/TPA has elected to send contributions and employee information electronically using tools
provided by AUL. The Employer/Plan Sponsor agrees to allow AUL to debit its checking account for the allocable
contribution amount shown on each of its contribution listings submitted to AUL. Additionally, the Employer/Plan
Sponsor/TPA agrees that AUL can rely on information provided through the electronic data transmission vehicles. To
establish electronic data transmission accounts, you must first complete an Electronic Data Transmission Account
Profile available from AUL.
Fiduciary Acceptance
Any reference to Contractholder in this Application, Acceptance, and Agreement should be read as Proposed
Contractholder until the applied-for group annuity contract goes into effect.
I, the undersigned, as TP A/Plan Administrator ofthe City Of Carlsbad Plan ('Plan"), hereby
appoints AUL as theTPA/Plan Administrator's agent for the sole purpose of executing the Plan's investment
instructions through the OneAmerica TeleServe® and Account Services systems. It is understood that AUL will
execute the Plan's investment instructions received through the OneAmerica TeleServe® and Account Services systems
effective as ofthe close of business on the valuation date, as referenced in your contract, in which AUL receives the
request. It is further understood that AUL has no direction or authority to alter or decline to execute any Plan's
investment instructions received through the OneAmerica TeleServe® or Account Services systems, unless such
instructions are impossible to execute. If any such instructions are impossible to execute, AUL will so notify the
TPA/Plan Administrator before the instructions are accepted by OneAmerica TeleServe® or Account Services. All
investment instructions received and executed through the OneAmerica TeleServe® or Account Services system will be
confirmed in writing to the TPA/Plan Administrator within ten business days.
The Contractholder, TPA/Plan Administrator, and AUL hereby agree by signing below, that they will be bound by the
terms of this Application, Acceptance, and Agreement as of the date of AUL's acceptance. The terms of the
Preliminary Agreement are superseded by the terms of the applied-for Contract as issued by AUL, and the Contract is
accepted or is deemed accepted under the provisions of the Preliminary Agreement. If an amendment accompanies
the issued contract, the Contractholder must sign and date the amendment and return a copy to AUL.
Electronic acceptance of this Applicafion, Acceptance, and Agreement by AUL, Indianapolis, Indiana indicates
that AUL has reviewed its contents along with all other required materials and has accepted its terms, and is equivalent
to AUL's written signature.
^n^^^i^^^b^;^^ is based upon the govemmental plan exception to securities registration under
Secfion 3(a)(2) ofthe Securities Act of 1933.
REPRESENTATIONS AND WARRANTIES
EMPLOYER
The Employer hereby represents and warrants that:
the Employer is a State, or political subdivision of a State, or agency or instrumentality of a St^e or
politol subdivision, within the meaning of Secfion 414(d) ofthe Intemal Revenue Code of 1986
("Code");
(2) the Employer has authority under applicable State laws and regulafions to enter into rriaintain, and
esLblish said Employee Benefit Trust or VEBA Trust (and benefit plan(s) thereunder),
(3)
(4)
(5)
any contributions to the Tmst shall be made exclusively by the Employer or its employees and be held for
the exclusive benefit of the employees;
the Employee Benefit Trust is exempt from taxes under Code Section 115, or the VEBA Trust is exempt
from taxes under Code Section 501(c)(9); and
.h^ Pmnlovee Benefit Trust or the VEBA Trust (and benefit plan(s) thereunder) is a governmental plan as
definTin Codfsecln™f4(^ established for the exclusive benefit ofthe employees ofthe Employer.
TRUSTEE
The Trustee hereby represents and wan-ants that
rn the Employee Benefit Tmst or the VEBA Trust was established to secure and hold funds to be contributed
by the Employer under certain benefit plans sponsored by the Employer;
the Tmst assets will be held for the exclusive benefit of the Employer's employees, and no portion of the
corpus orTnclrof the Trust will revert to the Employer or otherwise divert to third parties, except to
pay for reasonable administrative expenses incun-ed by the Trust;
the Employee Benefit Trust is exempt from taxes under Code Secfion 115, or the VEBA Tmst is exempt
from taxes under Code Section 501(c)(9); and
the Employee Benefit Tmst or the VEBA Trust (and benefit plan(s) thereunder) is a g^veriimental plan as
defined hCode Secfion 414(d), established for the exclusive benefit ofthe employees ofthe Employer.
(3)
(4)
IN WITNESS WHEREOF, the undersigned have executed this Representafion on the signature page below, on
the date(s) set forth on the signature page below.
Application for, and Acceptance of, the Contract:
APPLICATION TO THE AMERICAN UNITED LIFE INSURANCE COMPANY FOR
A GROUP ANNUITY CONTRACT
City of Carlsbad (hereinafter called the Applicant) hereby applies for Group Annuity
?^;;;;;;^ct Number G . This application is made a part of said contract, which is hereby approved and
Us provisions and co^^^difions accepted: This applicafion is executed in duplicate,
contract, and the other being returned to American United Life Insurance Company. It is agreed that this application
supersedes any previous application for said contract.
STATE NOTIFICATION
All states excluding those states listed below: Any person who knowingly presents a false or fraudulent claim for
payment of a loss or benefit or knowingly presents false information in an application for insurance is guilty of a crime
and may be subject to civil fines and criminal penalties.
In Colorado, any person who knowingly provides false, incomplete, or misleading facts or information to an insurance
company for the purpose of defrauding or attempting to defraud the company commits a crime. Penalties may include
imprisonment, fines, denial oflnsurance, and civil damages. Any insurance company or agent of an insurance company
who knowingly provides false, incomplete, or misleading facts or infomiation to a policyholder or claimant for the
purpose of defrauding or attempfing to defraud the policyholder or claimant with regard to a settlement or award payable
from insurance proceeds shall be reported to the Colorado division oflnsurance within the department of regulatory
agencies.
In Florida, any person who knowingly and with intent to injure, defraud, or deceive any insurer files a statement of claim
or an applicafion containing any false, incomplete, or misleading infomiafion is guilty of a felony ofthe third degree.
In Louisiana, Pennsylvania, and Tennessee, any person who knowingly and with intent to defraud any insurance
company or other person files an applicafion for insurance or statement of claim containing any materially false
infomiafion or conceals for the purpose of misleading, infomiation conceming any fact material thereto commits a
fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalfies.
In Maine and Washington, any person who knowingly provides false, incomplete or misleading infomiafion to an
insurance company for the purpose of defrauding the company commits a crime. Penalties may include imprisonment,
fines or denial of insurance benefits.
In New Jersey and Virginia, any person who includes any false or misleading information on any application for an
insurance policy is subject to criminal and civil penalfies.
In Florida: Does this group annuity contract replace any existing group annuity contract?
Yes No
If yes, submit any required replacement forms.
P-11104
By signing and complefing the informafion below, the following parties hereby agree to this Unallocated Contract
Application, Acceptance, and New Business Agreement.
Dated at on
DER/PLAN FIDUCIARY
Printed Name: "3"
Title: Mayoi"
Date:
AUL RETIREMENT SERVICES/)FF,KZER
Signature: ^ t '
Printed Name:
Title:
Date:
TPA/PLAN ADMINISTRATOR
Signature:
Printed Name: J- Wesley Compton
Xitie: President
Date:
SOLICITING PRODUCER
Signature:
Printed Name: J. Daniel Keenan
Xitie: Senior Vice President
Date:
APPROVED AS TO FORM Florida License ID No. (for Florida Applications)
ID No.
For governmental employers applying for a fixed group annuity contract to be used with an HRA or a GASB 45 OPEB
Plan, by signing and completing the information below, the following parties hereby agree to the "Non-Registered Fixed
Annuity Offering Representation" above.
"EMPLOYER" (with respect to
Employer representations only)
Dated: By:.
Dated:
Dated:
TRUSTEE(S) (with respect to Trustee
representations only)
By:
Name:
By:
Name:
Dated: By:.
Name:
City of Carlsbad Accumulation Program for Part‐Time and Limited‐Service Employees(APPLE)Debbie PorterJuly 24, 2012
What is the APPLE Plan?•Retirement vehicle for hourly, part‐time employees •Offered in lieu of Social Security/Lincoln2Social SecurityAPPLE 457 PlanLincoln 457
Plan Differences3Social Security APPLE 457Defined Benefit Defined ContributionAfter‐tax contributions Pre‐tax contributionsRequires approx. 10 years before vested Immediate vestingCost to Employee 4.2% of payroll(will be 6.2% as of 1/1/2013)Cost to Employee 3.75% of payroll
Impact of Transition•Approximately 366 part‐time hourly employees are currently in social security•City savings of approximately $60,000/yearSocial APPLESecurity PlanCity contribution (% of payroll) 6.20% 3.75%Employee contribution* (% of payroll) 4.20% 3.75%* Employee cost for Social Security will increase to 6.2% in 2013
Options1. Transfer all part‐time employees from Social Security/Lincoln into the APPLE Plan as originally proposed by staff2. Provide current part‐time employees a one‐time option to remain in Social Security; transfer all other part‐time employees into the APPLE Plan5Social SecurityAPPLE 457 PlanLincoln 457
Outcomes•OPTION 1 –All employees move to APPLE–Potential for some current part time employees to leave the City•OPTION 2 –One‐time option to remain in Social Security–City’s cost for employees in social security is 2.45% more than the cost for employees in APPLE–Administrative cost6