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HomeMy WebLinkAboutCC RES 79-039� � s . RESOLUTION N0. 79- 39 A RESOLU�fION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, ADOPTING AN EMPLOYEES' DEFERRED COMPENSATION PLAN AND AUTHORIZING THE EXECUTION OF AGREEMENTS RELATING TO SAID PLAN. WHEREAS, the City of Palm Desert has in its employ employees who are and will be rendering valuable services to the City; and WHEREAS, said employees may desire to defer income until retire- ment for the purpose of deferring Federal and State Income Taxes on said income; and WHEREAS, the City of Palm Desert has considered the establishment of a Deferred Compensation Plan for said employees, in accordance with Federal and State law and regulations, and believes that the adoption of said Plan will enhance the efficiency and morale of the employees and will be in the best interests of the City; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Desert, California, that the City of Palm Desert, California hereby establishes and adopts for its employees the Deferred Compensation Plan, attached hereto as Exhibit "A", to be effective immediately and to remain in effect until terminated by further resolution. BE IT FURTHER RESOLVED that the City Manager is hereby appointed to administer the Plan on behalf of the City and is authorized to execute Participation Agreements with eligible officers, officials and employees, and all other pocuments and Agreements necessary to implement and administer the Plan, except that, Agreements with institutions pursuant to the provision of Section 6.1 through 6.1 (e) shall be subject io approval by the City Council. PASSED, APPROVED, and ADOPTED this 12th day of April , 1979, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Brush, McPherson, Newbrander, Wilson & Mullins None None ,. None � , � I �/�' ; � % / �� � ,� , '�ED' D. MUrr NS, MAYOR ! ATTEST: , �. � �/ f SHEILA R. GIL N, CITY ERK CITY OF PALM �ESERT, CAL FORNIA RE5CI�JDED E3Y RE;OLUTION ;r....U.w.I.-_1_�-__ DATED: .......5,'I`� -_.. 1 - - Q-----�----- ---- � ` Exhi bi t A Resolution No. 79-39 EMPLOYEES' DEFERRED COMPENSATION PLAN SECTION 1. NAME: The name of this Plan is the CITY OF PALM DESERT EMPLOYEES' DEFERRED COMPENSATION PLAN (Hereinafter referred to as the "Plan"). SECTION 2. PURPOSE: The purpose of this Plan is to enable Employees of the City of Palm Desert to defer portions of their compensation and to provide retirement, disability and death benefits. SECTION 3. DEFINITIONS: For the purpose of this Plan, certain words or phrases used herein will have the following meanings. 3.T "Employer" means the PubTic Agency named in Section 1 herein above. 3.2 "Employee" means any officer or employee of the Employer named in Section 1. 3.3 "Participant" means any eligible Employee who elects, pursuant to the Plan, to defer a portion of his/her compensation, and who fulfills the requirements for participation in the Plan. 3.4 "Participation Agreement" shall mean the written agreement by which an Employee elects to become a Participant under the Plan. 3.5 "Benef�ciary" may be any person, trust, corporation or firm, or the estate of the Participant, or any combiriation of the foregoing designated by a Participant to receive benefits under the Plan. Designation shall be by written instrument executed by the Participant unless otherwise provided. Beneficiary may be singular or plural, primary or contingent. 3.6 "Administrator" means the Employer and/or other parties appointed by the Employer to administer the Plan. 3.7 "Compensation" means the total of all amounts which would be paid by the Employer to or for the benefit of an Employee (if he were not a participant in the Plan) for actual services for the period that he is a Participant. 3.8 "Payroll Period" means the work period for which a pay check is issued. 3.8(a) "Employment Period" means a calendar year, a period from January lst to December 31st; except that the first year of an Employee's participa- tion may be a short period commencing as provided in Section 4.2 and ending on December 31st of that year. 3.9 "Retirement" means retirement from service with the Employer which becomes effective on the first day of the calendar month after Participant meets the age and service requirements for retirement (including "early" or "late" retirement) specified in the applicable retirement policies of the Employer. DEFERRED COMPENSATION ,�AN - Page 2 SECTION 4. PARTICIPATION IN THE PLAN 4.1 Any Employee designated by the Employer to be eligible may elect to become a Participant in the Plan by executing and filing a Participation Agreement with the Administrator. An election to Participate in the Plan shall become effective with respect to Compensation earned by the Participant during the Employment Period next following the date of the Participant's election. Such election shall continue thereafter in full force and effect for subse- quent Employment Periods unless revoked by the Participant. 4.2 During the year of the inception of the Plan, or in the case of a new or newly eligible Employee, the election to participate shall become effective commenc- ing on the first day of the Payroll Period following the date of said election; provided, however, said election is made no later than sixty (60) days after notification by the Employer that the Plan has been implemented or the new Employee or newly eligible Employee has become eligible. 4.3 Each Participation Agreement shall specify the amount, by dollar amount or by percentage of gross compensation, which is to be deferred pursuant to the Plan and to be withheld out of the Compensation otherwise payable to the Partici- pant for each Payroll Period. Such deferred amounts shall be reasonably equal installments totaling not less than one hundred twenty dollars ($120.00) per Employment Period. The annual minimum may be prorated during the inception year, or during a partial year for a new or newly eligible Employee, for full Payroll Periods remaining in the first calendar year of participation. 4.4 A Participant may revoke his election to participate in the Plan, and thereby terminate further deferral of his Compensation, by executing and filing with the Administrator a notice of revocation at least thirty (30) days prior to the effective date of revocation. A former Participant may not rejoin the Plan during the Employment Period in which revocation occurred; however, he may elect to become a Participant for subsequent Employment Periods. No amounts shall be payable to an Fmployee upon revocation of his participation in the Plan unless otherwise provided for in Section 7. 4,5 A Participant may change the amount of Compensation to be deferred in a subsequent Employment Period by executing and filing notice with the Adminis- trator at least 30 days prior to the beginning of such Employment Period. 4.6 A Participant may designate in writing a Beneficiary to receive any benefits which may be payable under the Plan upon the death of such Participant. Designation of Beneficiary may be changed by notice in approved form executed and filed with the Administrator. SECTION 5. DEFERRAL OF COMPENSATION 5.1 During the period of participation, the Employer shall not pay the Participant his full Compensation, but shall defer payment of such part of his Compensation as the Participant has specified in his Participation Agreement. The Employer shall establish in its records an Individual Deferred Compensation Account ("IDC Account") for each Participant, and a summary of such IDC Accounts, to be identified as a General Deferred Compensation Account ("GDC Account"), to provide a convenient method of ineasuring its obligations to each and all Participants under the Plan. DEFERRED COMPENSATION �n - Page 3 � 5.2 The maximum that may be deferred under the plan for the taxable year shall not exceed the lesser of --- A) $7,500, or B) 33 1/3 percent of the participant's includible compensation, C) Which may provide that, for 1 or more of the participant's last 3 taxable years ending before he attains normal retirement age under the plan, the ceiling set forth shall be the lesser of --- a) $15,000, or b) the sum of --- i) the plan ceiling established for purposes of paragraph (5.2) for the taxable year (determined without regard to this paragraph) , pl us ii) so much of the plan ceiling established for purposes of paragraph (5.2) for taxable years before the taxable year as has not there- tofore been used under paragraph (5.2) or this paragraph, D) Which provides that compensation will be deferred for any calendar month only if an agreement providing for such deferral has been entered into before the beginning of such month, E) Which does not provide that amounts payable under the plan will be made available to participants or other beneficiaries earlier than when the participant is separated from service or is faced with an unforseeable emergency, and F) Which provides that --- i) all amounts of compensation deferred under the plan, ii) a11 property and rlghts purchased with such amounts, and iii) all income attributable to such amounts, property, or rights, shall remain (until made available to the participant or other beneficiary) solely the property and rights of the City (without being restricted to the provision of benefits under the plan) subject only to the claims of the Cities general creditors. A plan which is administered in a manner which is inconsistent with the requirements of any of the preceding paragraphs shall be treated as not meeting the requirements of such paragraph as of the first plan year beginning more than 180 days after the date of notification of the inconsistency unless the City corrects the inconsistency before the first day of such plan year. SECTIO�J 6. ADMINISTRATION OF THE PLAN 6.1 The Plan shall be administered by the Administrator under the direction of the Employer. Acting for and in behalf of the Employer, the Administrator may transmit amounts in the IDC Accounts to such investment plans as here- after may be approved by the Employer. In regard to such investments, DEFERRED COMPENSATION 1N - Page 4 written agreements between the Employer and the institutions accepting funds for investment shall contain at least the following provisions: 6.1(a) Any investment of amounts in the IDC Accounts, including earnings on such amounts, shall be made according to written instructions of the Administrator. 6.1(b) The Employer sha11 be the legal and beneficial owner of all amounts invested (as between Employer and Participant). The Employer shall hold all certificates, policies and other documents evidencing owner- ship of the amounts invested, and shall maintain records, including records of the IDC Account of each Participant and the G�C Account. 6.1(c) No less frequently than quarterly, the Employer shall be furnished with written reports showing the fair market value and/or the current balance of the amount invested (including interest and dividends accrued, if any), and amounts shown in such reports shall be reflected in each Participant's IDC Account by the Employer. 6.1(d) No less frequently than quarterly, each Participant shall be furnished with a statement showing transactions, earnings and the current balance of the amounts invested from his IDC Account. 6.1(e) The Employer shall have the sole right to vote any shares of stock or proxies which it may acquire or be entitled to by investment of IDC Account funds. 6.2 The Administrator shall record promptly and accurately all transactions pertaining to Participants' Deferred Compensation in their IDC Accounts, and Participant shall be entitled to know the balance in his IDC Account at least quarterly. 6.3 The Employer shall have the sole authority to enforce the Plan and shall be responsible for its operation in accordance with its terms. 6.4 The Employer shall determine all questions arising out of the administration, interpretation and application of the Plan. All determinations shall be conclusive and binding. 6.5 At the time of his election to participate in the Plan, each Participant shall elect the time, manner and (if applicable) the amount of benefits to be paid to him, or in the event of his death to his Beneficiary, under the Plan. This shall be an irrevocable election of such times, methods and amounts, in order to comply with Internal Revenue Service requirements for avoidance of "constructive receipt" of deferred income. 6.6 In the event that the Employer should purchase an annuity as a means of investment and distribution of funds in a Participant's IDC Account, the Employer shall be both the owner and the named Beneficiary of such annuity contract. 6.7 If the Plan provides for more than one type of investment preference, a Participant may request a change in preference of investment as provided in Sectian 4.5. Such request may be made only with respect to compensation not yet earned and deferred. The Employer may, but is not required to, honor such request. The minimum investment in each type of investment shall be DEFERRED COMPENSATION ��N - Page 5 one hundred twenty dollars ($120.00) per contained in this Plan shall be construed to invest deferred amounts or as limiting with respect to making investments. Employment Period. Nothing as req ui ri ng the Emp 1 oye r the Employer's discretion SECTION 7. BENEFITS The Employer shall pay to the Participant, or to his Beneficiary if applicable, the amount in such Participant's IDC Account as of the month-end following the Participant's termination, retirement, total disability or death. Distribution of Benefits under the Plan will be made, or if in installments shall commence, not later than sixty (60) days after notice to the Administrator of the occurence of the events described in Section 7 unless otherwise specifically provided. All distribu- tions shall be subject to any State or Federal taxes required to be withheld. Payment shall be made in accordance with the irrevocable election made in the Participation Agreement, except in the event of Hardship described in Section 7.4. Installment distributions shall be in approximately equal installments which shall be intended to exhaust the balance due Participant or Beneficiary at the expiration of the term over which they will be made. Such installment amounts may be ad,justed from time to time to take into consideration gains or losses, if any, from funds invested. Notwithstanding the foregoing if any method elected by the Participant shall result in installment payments of less than $25, the Employer shall make payments on an annual basis aggregating installments otherwise due; or if the balance due Participant or Beneficiary is less than �,500, Employer shall discharge its obligation by a lump payment. � 7.1 RETIREMENT: Upon retirement, the full benefits credited to the Participant's IDC Account, plus or minus investment gains or losses, but less any Federal or State taxes required to be withheld, shall be distributed to a Participant in any one or more of the follqwing ways, as pre-elected at time of enrollment: 7.1(a) In a lump sum. 7.1(b) In monthly, quarterly, or annual payments for a designated period of not less than one year and not more than the remaining years of the Participant's life expectancy, determined by the Administrator in accordance with standard mortality tables recognized for that purpose. 7.1(c) Installment payments, equal to benefits which would be payable to Employer under and pursuant to terms of a retirement annuity policy or policies which may be purchased at the time of Participant's retirement, shall be paid to him in the event that Participant had pre-elected an annuity form providing for such payments. 7.2 OTHER TERMINATION: In the event of termination of employment before Retirement for reasons other than those specified in Section 7.3 and Section 7.4, then the full benefits credited to Participant's IDC Account, plus or minus subse- quent gains or losses, shall be distributed to him in any one or more of the following ways, pre-elected at the time of enrollment: 7.2(a) In a lump sum. 7.2(b) In monthly payments over a period not to exceed ten (10) years from date distribution begins. � DEFERRED COMPENSA7ION V- Page 6 7.2(c) In payments under 7.2(a) and 7.2(b) above, postponed by pre-election at the time of enrollment until such age as may be specified by Participant. 7.3 TOTAL PERMANENT DISABILITY: In the event of the total permanent disability of a Participant while he is an Employee of the Employer, the Employer shall pay to the Participant an amount equal to the balance of the Participant's IDC Account as of the month-end following the Employer's determination of such disability, such amount to be paid in the manner pre-elected by the Participant at the time of enrollment pursuant to the options in Section 7.1, above. 7.4 HARDSHIP: In the event of occurrence to the Participant of an emergency event to be determined by the Employer in his sole discretion, the Employer may pay to the Participant all or any portion of the amount in such Participant's IDC Account as of the month-end following the date when such determination is made. As used herein, emergency event shall mean only a real emergency which has occurred, which is or was beyond control of the Participant, and the occurrence of which has or would cause the Participant great financial hardship. The amount that will be paid out shall be limited to the amount necessary to alleviate that hardship. Any distribution under this section shall be deemed a revocation under Section 4.4 and no further deferral of Compensation will be made for the remainder of the current Em�loyment Period. 7.5 DEATH: In the event of death of any Participant, either before or after termination of employment, then the full benefits credited to his IDC Account shall be distributed to his Beneficiary in a manner described in Sections 7.1 (a), 7.1(b) and 7.1(c) as pre-elected at time of enrollment. SECTION 8. MISCELLANEOUS 8.1 The contractual obligation of the Employer to the Participant established by the Plan shall not be assignable in whole or part, voluntarily or by operation of law, and no right or interest of a Participant pursuant to the Plan shall be subject to any obligation or liability of such Participant or his Beneficiary, except as provided in the next paragraph herein below. 8.2 No Participant or other person shall have any legal or equitable right against the Employer except as provided in the Plan, and in no event shall the terms of employment of any Employee or Participant be modified or in any way affected thereby. 8.3 Each Participant herein expressly agrees for himself and his Beneficiary that he shall look solely to the general assets of the Employer for the payment of any such benefit to which he may become entitled under the Plan, and acknowl- edges that al� amounts deferred hereunder shall be available to satisfy the general obligations of Employer. 8.4 The Plan has been adopted in the State of California and shall be construed and governed and administered in compliance with all applicable State law. 8.5 Captions used in the Plan are for the purpose of convenience only, and shall not limit, restrict or enlarge the Provisions of the Plan. . � �EFERRED COMPENSATION ,N - Page 7 8.6 The Plan shall be binding upon and shall inure to the benefit of the Employer, its successors and assigns, all Participants and Seneficiar?es, and their heirs and legal representatives. 8.7 As used in the Plan, the masculine or feminine or neuter gender, and the singular or plural number shall each be deemed to include the others unless the context clearly indicates otherwise. 8.8 Any notice or other communication required or permitted under the Plan shall be in writing and, if directed to the Employer, shall be sent to the Adminis- � trator at his principal office; and, if directed to a Participant or a Bene- : ficiary, shall be sent to such Participant or Beneficiary at his last known address as it appears on the Employer's records. Such notice shall be ' deemed given when mailed. 8.9 Deductions for Participant's contributions to retirement associations shall be made without reference to amounts deferred pursuant to the Plan. 8.10 An approved leave of absence with pay shall not affect agreements to partici- pate in the Plan. 8.11 An approved leave of absence without pay shall be considered to be a tempor- ary suspension of participation in the Plan. Participation shall be automati- � cally reinstated as of the first day of the next Pay Period subsequent to the termination of such leave of absence status. 8.12 The Employer shall make no loans or advances to the Participant or Beneficiary based upon IDC Accounts, described herein, or upon any other obligations under the Plan. SECTION 9. TERMINATION OF PLAN BY EMPLOYER The Plan may be amended or terminated by the Employer at any time, or the Employer may, without amending or terminating the Plan, cease to set aside assets under the Plan. No amendment or termination of the Plan, and no cessation of the setting aside of assets by the Employer shall reduce or impair the rights of any Participant or Beneficiary which may already have accrued. 9.1 If the Plan is terminated by the Employer, the Employer may, at Employer's option, distribute in the same manner to all Participants amounts equal to the balance of their IDC Accounts as of the month-end following such termina- t10n. 9.2 If Employer does not elect to pay accrued benefits on termination of the Plan, he shall cease all deferrals of Compensation, but payments of benefits shall be made pursuant to the applicable provisions of Section 7 of the Plan and irrevocable election of the various Participation Agreements then in effect.