HomeMy WebLinkAboutAdopt Res 97-87 Custodial Account and Life Insurance PEBSCO r
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To: Honorable Mayor
Members of the City Council
From: Paul S.Gibson,Director of Finance
Subject: Resolution 97-A Resolution Establishing a Custodial Account and Life Insurance Transfer
Authorization with the Public Employees Benefit Services Corporation(PEBSCO)
Date: September 24, 1997
RECOMMENDATION:
By minute motion,agree to adopt Resolution 97- 87 Establishment of Custodial Account and Life Insurance
Transfer Authorization.
BACKGROUND:
The City Council of the City of Palm Desert has previously approved the establishment of a deferred plan with
PEBSCO per Resolution 88-107.
As a result of the Small Business Job Protection Act of 1996("the Act"),signed into law by President Clinton on
August 20, 1996,a change of ownership for life insurance plans had to be made to the original deferred
compensation plans. The Act prohibits government agencies from controlling the deferred compensation accounts
and in turn,creates a custodial account for each individual contributor.
PEBSCO was able to incorporate all changes required by the Act into the plan document effective January 1, 1997
without any action,except the ability to change the ownership of life insurance assets to the custodial account. N. ,
Once the transfer authorization form is signed,the deferred compensation plan will meet the new require ents 144 0
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assets in a 457 Plan be held in a qualified trust,custodial account or annuity contract by January 1, 1999. W
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This form authorizes the transfer of ownership of life insurance contracts now offered under the deferr d \ to
compensation plan from the Entity as owner to Bank One as Custodian for the beneficial ownership o p 'cip t —
and their beneficiaries. , ,
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Authorization of this form will be contingent upon the review and concurrence of the City Attorney. 0U
Respectfully submitted, Reviewed and concur, W D +)
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Paul S.Gibson Ramon A.Diaz H
lDirector of Finance/City Treasurer City Manager 8 \
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