HomeMy WebLinkAboutRes 2014-83 - 84 - ICMA VantageCare Rtrmnt Health Svngs Pln � CITY OF PALM DESERT
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� HUMAN RESOURCES DEPARTMENT
. � �:
STAFF REPORT
REQUEST: Amend the City of Palm Desert ICMA Vantagecare Retirement
Health Savings Plan, and establish a corresponding 401A Money
Purchase Plan, providing for mandatory participation for
employees hired after January 1, 2015, such employees shall not
be enrolled in the City's current Retiree Health Service Stipend
program, in accordance with the 2014 Memorandum of
Understanding with the Palm Desert Employees Organization.
SUBMITTED BY: Lori Carney, Human Resources Manager
DATE: October 9, 2014
CONTENTS: Resolution No. 2014- 83
Resolution No. 2014- s4
ICMA-RC 401 a Governmental Money Purchase Plan Agreement
ICMA-RC Administrative Service Agreement
ICMA-RC VantageCare RHS Plan Adoption Agreement
Recommendation:
1. Waive further reading and adopt: 1) Resolution No. 2014- 83 amending
the City of Palm Desert ICMA Vantagecare Retirement Health Savings Plan,
and 2) Resolution No. 2014- 84 establishing a corresponding 401A
Government Money Purchase Plan, for employees hired after January 1,
2015.
2. Authorize the City Manager to execute all documents related to the
implementation of the aforementioned plans.
Resolution No. 2014-83
Resolution No. 2014-84
Staff Report: Amend ICMA VantageCare RHSP and Adopt ICMA 401A Money
Purchase Plan for Employees hired after January 1, 2015
Date: October 9, 2014
Page 2 of 5
Executive Summary
Public Agencies, including the City of Palm Desert, have become increasingly
concerned with the ongoing costs and potentially unfunded liability of providing post-
retirement medical benefits. At the direction of Council, staff evaluated potential steps
to reduce this liability and determined that legal challenges make changing the plan for
current employees infeasible. Developing a solution for new employees is possible,
utilizing a Retirement Health Savings Plan in conjunction with a 401A Money Purchase
Plan.
Beginning in spring 2014, the City Manager and his team negotiated with the Palm
Desert Employees Organization to provide an alternative retirement health savings plan
for employees hired after January 1, 2015. Such employees would not be eligible to
participate in the current program. Staff also met with representatives of ICMA, as
providers of current retirement savings programs for the City and other public agencies.
As a result of this research, Staff's recommendation is to amend an existing ICMA
Vantagecare Retirement Health Savings Plan (RHSP) to require mandatory
participation for employees hired after January 1, 2015, and to exclude such employees
from the current Retiree Health Service Stipend. Contributions to this plan are fixed as
defined in the plan document. Staff recommends a 1% employee contribution matched
by a 1% employer contribution.
In order to provide employees the option of voluntarily contributing more to a retirement
savings account staff also recommends the establishment of an ICMA 401A
Governmental Money Purchase Plan. This plan will allow employees to elect, at the
time of hire to contribute additional pre-tax dollars of up to 10% of their salary. In order
to provide an incentive to save, the City would match up to 2% in the 401 A plan.
The maximum City contribution to both plans would be a cumulative 3% of salary.
Resolution No. 2014-83
Resolution No. 2014-84
Staff Report: Amend ICMA VantageCare RHSP and Adopt ICMA 401 A Money
Purchase Plan for Employees hired after January 1, 2015
Date: October 9, 2014
Page 3 of 5
In summary, staff recommends the adoption of two plans as follows:
Plan Name � Employee Contribution � Employer Match !
; ;
� � i
VantageCare Retiree Health Savings ; 1% ! 1% '
Plan (RHSP) � ! '
i �
401A Government Money Purchase Plan � 0 — 10% � Max 2% ;
i � i
If these plans are adopted, it will effectively "close" the current Retiree Health Stipend
Program. Only current employees and retirees would be eligible to participate. Current
employees must still meet the age and years of service requirements of the program,
and retire from the city, to receive a benefit. The current Retiree Health Stipend
Program is funded at 86% (at 2013) with $11,395,935 in assets held in trust with
CaIPERS and $1,686,000 reserved as part of the City's obligated reserves in fund 576.
After the closing of the plan an actuarial study will be conducted and which may result in
a higher funding percentage.
The recommend plans will provide new employees with a vehicle for saving for future
retirement health expenses. An added bonus is that the plans are portable and allow
the employee to keep them throughout their career, regardless of whether they retire
from the City of Palm Desert. This makes them attractive in recruiting young
professionals to the City.
Backqround
In 1992 the City created the Retiree Health Care Program - Resolution 92-96, which
provided retired City employees with a contribution towards their health care premiums.
Employees who retired remained on the City's employer insurance plan. At the time,
health benefits were a relatively small part of the salary and benefits package and the
City desired to provide long term employees with adequate health care in retirement.
Providing continuation through the City's health plan was also desirable because
although employees could retire at 55, they were not eligible for Medicare until age 65,
and options for coverage on the open market were limited.
In 1999 the City contracted with CaIPERS for health benefits and became subject to the
Public Employees' Medical and Hospital Care Act, which requires a minimum
Resolution No.� 2014-83
Resolution No. 2014-84
Staff Report: Amend ICMA VantageCare RHSP and Adopt ICMA 401A Money
Purchase Plan for Employees hired after January 1, 2015
Date: October 9, 2014
Page 4 of 5
contribution for CaIPERS retiree's health care premiums. The plan was revised to be a
Retiree Service Stipend Plan — Resolution 99-65. This plan provides retirees with a
direct reimbursement of 50 — 75% of premiums, depending on years of service with the
City.
In 2008, as a result of growing concerns regarding the future liability of the existing
program the Council adopted Resolution No. 08-02, again amending the program and
reducing benefits available to employees hired after January 1, 2008. These revisions
include:
• Increasing the minimum years of service to 15,
• Reducing the maximum reimbursement to 50%,
• Ending reimbursements when the retiree enrolls in Medicare,
• Providing reimbursement based on the lowest cost plan.
While these significant changes provided a reduction in the liability for employees hired
after January 1, 2008, staff believes that in the current economic climate and dynamic
health care marketplace it is prudent to close this plan to new employees and provide
an alternative.
The proposed plans will greatly reduce the City's liability for post retiree medical
expenses, and over time eliminate post retirement payments altogether. They have
several advantages, one being that they are "pay as you go" plans which can be
accounted for in the normal budgeting process each year. Another clear advantage is
that employees are more engaged and responsible for their own retirement health
savings accounts, and the plan provides an incentive to contribute more to receive a
match. This plan should be attractive to young professionals who wish to spend part of
their career in Palm Desert.
Resolution No. 2014-83
Resolution No. 2014-84
Staff Report: Amend ICMA VantageCare RHSP and Adopt ICMA 401A Money
Purchase Plan for Employees hired after January 1, 2015
Date: October 9, 2014
Page 5 of 5
Fiscal Analvsis
The impact of adoption of these plans will be seen over several years. It will aimost
certainly result in a reduced liability in the current post-retirement health benefits trust
fund, thereby requiring smaller contributions to reach full funding status. As employees
are hired under the new plan the long term cost reductions should increase. In 2015
Finance staff will contract for an actuarial study and the results will be reported as part
of a future budget process.
Submitted By: CITYCOUNCTLACTION
APPROVED � DENiFD __
R CEIVED � l� OTHER ��, �
r ,��
G DATE • `G/
Lori rney, Hu n Resources Manage,�1YE5: t " ` � � � ,�;; ;.�„ � 7-��� ., _
NOES: � �
Approval: AB5ENT: ��m�
ABSTAIN:
VERIFIED BY: a't
Original on File with City lerk's Of�ce
�
Paul Gibson, Director of Finance
'l. /J �',
(�
J hn M. Wohlmuth, City Manager
what's the Difference?
ICMn 40l(aJ Money Purchase Plnns vs. 457 Plons
Hru/dinR Krur��nnn J�nrrrry
' ( � � � � ' � • •i � �• � � � �
ELIGIBILITY
Employee Eligibility Eligible employee groups ore specified by the empbyer in the Any employee;ond any independent controctor who hos been
plan's odoption agreement. designated by the employer as eligible.
CONIRIBUTIONS
tontributian limits(2014) Norma)limit:552,000 Normal Limit:$17,500
(atch•Up Age S0:N/A (atch•Up Age S0:55,500(523,000 totap
or or
Pre-Retirement:N/A Pre-Retirement:$17,500($35,000 totol).Mny be made during
Apply to the combination af ernployer and eoch of the three years prior to normal retirement age bosed
employee contributions. on the extent to which mazimum confibutions were nat made
Contributions do not impact 451 plon limits. in previous years.Note:the"Age 50"ond"Pre�Re6remenY'
provisions may not 6olh be used in the same ralendar year.
Apply to the combination of pre�taz and Roth contributions,and
employer and employee contributions.
Cor�ributions do not impoct 401(0)plon limits.
Employer Contributions Fized contributions are required and employers may olso Vdur�ary,typically funded solely by employee contributions.
make matching contributions,subject ro the employer's
vesting schedule.
FI(A Taxes Employer coniributans ore not subject to FICA tazes. Empbyer ond employee cor�ributiora are subject to FIfA fixes.
Tax Treotment Comributions"pidced�up"by the employa are made pre-tax Pre-tax contributions redae portiapams'taxable income fa
ond reduce porticipants'taxoble income for the yeoc Employers the}reor.
�"'���°f�0r Roth rnniri6utans may be allowed by the empbyer and�e
� employee confi�butions are rrwndotory:o► made on on afteFtax bosis,reported os income.
• empbyees moy moke o one�time�revocable dacisiion ro
cor�hibute a certain percentage.
Vdu�ary ofter-tax conhibuta�x may be allowed by the
employer ond are reported as income.
Employee(ontribuiion No changes,other than to after•taz contributions,may be made Cw�tributioru ore not required.(honges istop,restort,increose,
Flexibility nfter initi�eraonment in ihe�an. deaease)may be mode at any time.
Accrued Sick ond Vacation Employers may allow,or require annualty or�on se{wration Anowed.
leave(ontributions from service.
(Con6nued on next poge)
I(MA RETIRfMENT(ORPORATION ! ]77 HORTN CAPITOI STREET,NE ; WASHIN6TON,D(20UO2•4240
TEl 202 4b?4600 ' fAX:202961•4601 ; TOII FREE 800•669 7400 i EN ESPpNOI IIAME At:800•669�8716 � INTERNET:WWW.I[MAR(.ORG
� 1 � � � ' � � 'I ' i• •� � �• � � ' � �
WITHDRAWALS
Withdrawol Eligibility Upon separation from service.Employer may require o lifetime Allowed upon separation from service,without restriction.
annuity for morried participants. The following in•service wffhdrawah may apply:
The following in-service withdrawals moy opply: � Emergency
• After age 10�/z • After age 10�/s
• Voluntory after�taz conhibutions(if elecred by the employer) � Rollover assets(if elected by the empbyer)
� Rollover assets(if elected by the empbyer) • Small account balance,if participanYs bolonce is under
� After artainment of the plan's Normal Retirement Age(if $5,000 and no contributions have been made for a period of
elected by the employer) two years.
Taxation of Withdrawals Pre•Tax Assets Pre-Tax Assets
Subject to federal and,in most cases,state income tnxes Subject to federa!and,in most coses,state intome tnxes
Aher-Tax Assets Roth Assets
Contribufians are not subject to taxes.Eamings are subject ta Contribu6ons are nat subject to taxes.Eamings will be rox f�ee if
income taxes. tha folbwing requirements far o qualified distribution are met:
• a period of five yenrs hos pas�ed since Jnnuory 1 of the yeor
of the participant's fiat Roth conhibution(including rolbvers);
and
� the participant is at least 59Y�yeaa old(or disab�d or
deceosed).
10%Early Withdrawal Applies prior to age 59'/�,unless employee qualifies for an Nat applicable to 451 plan contributions ond associated eornings,
Penaity Tax� ezception. other than roned�in assets from na�r451 plans.
Required Minimum After age 10%or seporation from service,whichevei is loter
Distributions(RMDs)
Loans Moy be permitted by the employer,subjett to IRS rules.Defouited loans are heated os tazable withdrawals.
ROLLOYERS
Roll-ins Allowed from 401,457,403(b)pl�s and Troditionol IRAs,otl�er Auowed from 401,457,403{b)plans and Traditionnl IRAs,other
than noo-deducfibie IRA confibutior� than after•tax bosis and non�deduct�le iRA co�tbutions
Roll-outs Allowed to a 401,457,403(b)plan,and Tra�itional w Roth IRA Allowed to a 401,457,403{b)plon,ad Traditional or Roth IRA
Roth assen�st be rolled ro o Roth IRA a a retirement plan
with o Roth de�errd feot�e(e.g.,45l/401(k)plm)•
Purchase of Service fredits Permitted,other than Roth assets Pemiitted,other thon Roth assets
*See IGWA-RC's Spedal Tax Notice Regarding Plan Payments or tfie IRS Inshuctions for Form 5319 for more informatron about the IRS 10%enriy withdrawal penalty taz.
This information is for educa6onal purposes only.IGNA•RC does not provide tox or legal advice. ac�v9st��z�2 s�26
RESOLUTION NO. 2014 83
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM
DESERT, CALIFORNIA, AMENDING THE EMPLOYER
VANTAGECARE RETIREMENT HEALTH SAVINGS PLAN;
WHEREAS, the City of Palm Desert first adopted a Retiree Heaith Savings Plan '
in August 2005; and
WHEREAS, the employer as employees rendering valuable service; and
WHEREAS, the City desires to limit its post-retirement medical liabilities; and
WHEREAS, the City met and conferred with the Palm Desert Employees
Organization to introduce a defined contribution plan for funding post-retirement medical
expenses for employees hired after January 1; and
WHEREAS, the establishment of a retiree health savings plan for such
employees serves the interests of the employer by enabling it to provide reasonable
security regarding such employees' health needs during retirement, by providing
increased flexibility in its personnel management system, and by assisting in the
attraction and retention of competent personnel; and
WHEREAS, the employer has determined that ICMA Vantagecare Retirement
Health Savings Plan, as amended, serves the above objectives;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Palm
Desert, California, adopt the attached restated City of Palm Desert IRS Section 125
Cafeteria Plan; and
PASSED, APPROVED AND ADOPTED at the regular meeting of the Palm
Desert City Council, held on this 25th day of September, 2014 by the following vote, to
wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
VAN TANNER, MAYOR
ATTEST:
RACHELLE KLASSEN, CITY CLERK
City of Palm Desert, California
RESOLUTION NO. 2014- 84
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM
DESERT, CALIFORNIA, ESTABLISHING THE ICMA RETIREMENT
CORPORATION GOVERNMENTAL MONEY PURCHASE PLAN AND
TRUST;
WHEREAS, the Employer has employees rendering valuable services; and
WHEREAS, the establishment of a money purchase retirement plan benefits empfoyees
by providing funds for retirement and funds for their beneficiaries in the event of death;
and
WHEREAS, the Employer desires that its money purchase retirement plan administered
by ICMA-RC and that funds held in such plan be invested in the VantageTrust, a trust
established by public employers for the collective investment of funds held under their
retirement and deferred compensation plans:
NOW THEREFORE BE IT RESOLVED that the Employer hereby establishes or has
established a money purchase retirement plan (the "Plan") in the form of the ICMA
Retirement Corporation Governmental Money Purchase Plan and Trust, pursuant to the
specific provisions of the Adoption Agreement (executed copy attached hereto).
The Plan shall be maintained for the exclusive benefit of eligible employees and their
beneficiaries; and
BE IT FURTHER RESOLVED that the Employer hereby executes the Declaration of
Trust of VantageTrust, intending this execution to be operative with respect to any
retirement or deferred compensation plan subsequently established by the Employer, if
the assets of the plan re to be invested in the VantageTrust.
BE IT FURTHER RESOLVED that the Employer hereby agrees to serve as trustee
under the Plan and to invest funds held under the Plan in the VantageTrust; and
BE IT FURTHER RESOLVED that the Director of Finance/City Treasure� shall be the
coordinator for the plan; shall receive reports, notices, etc., from the ICMA Retirement
Corporation or the VantageTrust; shall cast, on behalf of the Employer, any required
votes under the VantageTrust; may delegate any administrative duties relating to the
Plan to appropriate departments; and
Resolution No. 2014-84
BE IT FURTHER RESOLVED that the Employer hereby authorizes the City Manager to
execute all necessary agreements with the ICMA Retirement Corporation incidental to
the administration of the plan.
PASSED, APPROVED AND ADOPTED at the regular meeting of the Palm Desert City
Council, held on this 25th day of September, 2014 by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
VAN TANNER, MAYOR
ATTEST:
RACHELLE KLASSEN, CITY CLERK
City of Palm Desert, California
EMPLOYER VANTAGECARE RETIREMENT HEALTH SAVINGS (RHS�PLAN
ADOPTION AGREEMENT
Amendment to Existing Plan Numbcr: 801 I 50
Employer Retirement Health Savings Plan Name:
I. Employer Name: City of Palm Deser� State: CA _
II. The Employer hereby attesu that it is a unit of a state or local government or an agency or instrumentality of one or more units of
a scate or loca!government.
III.Effective Date of the Amendment: lanuary 1, 201 S
N The Employcr intends to utilize the Trust to fund only welfare benefits pursuant to the following welfare benefit plan(s)
established by the Employer:
V. Eligibfe Groups,Participation and Participant Eligibility Requirements
A. Eligible Groups
The following group or groups of Employees are eligihle ro parricipare in rhe Van�ageCare Retirement Health S:ivings Plan (check
all applicablr boxes):
0 All Employces
❑ All Full-'I'imc Employees
❑ �1on-Union f:mployees
❑ 1'ublic Safery Employees—Policc
❑ Public Safcry FmPloyccs—Fircfi�;htcrs
❑ Genercl Employees
❑ Collectively-Bargained F,mployees(Specify unit(s))
❑ Other(specify group(s))
�Ihe Employee�rotip(c)specified must corrrspond co a group(s)of the same designation t}iat is defined in che�tatutes,orc{inances,
rtiles, regulations, personnel manuals or orher dociiments or provisions in eflcct in the srate or locality of rhe F.rnployer.
B. Participation
Mandatory Participation:All Employees in the covered group(s)are reyuired ro participate in the Plan and shall recrive contrihutions
pursuant to Scction VI.
C. Participant Eligibility Requirements
l. Minimum scrvicc: �Ihc minimum period of scrvicc rcquircd for participation is N/A (writc N/A if an
Employce is cligible to participate immediately upon employment).
2. Mi�iiiuiun agc:Thc mini�num agc rcyuired fi�r cligibility to participatc is N/A �W««:vin�i�,� �„�����„«„1 a����
requirrd).
VI. Contribution Sources and Amounts
A. [)c(inition of Earnings
Tfie detinicion oE F.arnings will apply ro all RHS C:ontribution I�ratures rhat reference "Earnings", induding I)irect Ernyloyer
Contributions(Section VI.I3.1.)and Mandarory Employee Compensation Concributions(Section VI.6.2.)
De(uii�ion of earnings: All Earned Wages
1
[3. Direct Employer Concributions and Mandarory Contributions
l. l�ircct Employer Contrihutions
'Ihc Employer shall contrihute on hehalf of each Participanr
� %,of Earnings
❑ $ cach Plan Ycar
❑ A discretionary amount to be derermined each Plan Year
❑ (�thcr(dcscrihc):
2. Mandatory F.mploycc Compcnsation Contributions
"Ihr I�:mployer will make mandatory contributions of Employee compensation as Follows:
OO Reduccion in Salary- 1 %of Earnings or$ will be contributrd for the Plan Year.
❑ Ucacascd Mcrit or I'ay I'lan Adjustmcnt-AJl or a porcion of�thc l:mployccs'annual mcrit or pay plan adjustmrnt will
bc contriburcd as follows:
An Employcc shall not havc �hc right to discontinuc or vary thc ratc of Mandatory Contributions of P.rnploycc
Compcnsation.
3. Mandatory I?mployce Ixave Contributions
Th�F.mployer will make mandatory contributions of accrued Ieave.ts follows(provide fonnula for deter�nining Mandarory
Employee Leave contributions):
❑ nccrucd sick I.cavc _
❑ Accrucd Vacation I.cavc _ _ _
❑ Othcr(spccify rypc of Icavc)Accrucd Lcavc_ ___
An Employcc shall not havc thc right to discontinuc or vary thc ratc of mandatory lcavc contributions.
C. Limits on'lotal Conuibutions(chcck onc box)
'Ihc total contribution by che Empfoyer on behalf of each Participant(including Direct Employer and Mandatory Employee
Contributions) for cach Plan Ycar shall not cxcccd thc foilowing limit(s) bclow.
� Thcrc is no Plan-dc6ned limit on d�c perccntagc or doilar amount of carnings that ttiay bc concributcd.
❑ %of carnings'
`Uetinition of earnings: ❑ Same as Section VI.A. ❑ C)thrr
❑ $ for thc Plan ycar.
Scc Scction V.B. tor a discussion oF nondiscrimination rules that may apply ro non-collcccivcly bargaincd sclt-insttrcd Plans.
2
VII.Vesting for Direct Employer Contributions
A. Vesting Schedule(chcck onc box)
❑ 'Ihc account is Ib0%�vcstcd at all times.
'� �Ihc following vesting schcclulr shall apply to [)ircct Gi�loycr Contribu[ions as oudinrd in Scction VI.A.l.:
Years of Service Vesting
Completed Percentage
1 �_%
2 ��%�
3 �Q_%
� $��/,
5 100 %
'%�
%
�%
o��
`%�
B. The account will become 100%vested upon the death,disabiliry,retirement',or attainment of benefit eligibiliry(as
outlined in Section IX) by a Participant.
'Dcfinition of rr�irrmrnt(ihcck onc bux):
❑' Kctircrncnt as dcfined in thc primary rctircm�nt plan of thc F.mploycr
❑ Separation fmm scrvicc
❑ Othcr
C. Any period of service by a Participant prior to a rehire of the Pazticipant by the Employer shall not count towad the
vesting schedule outlined in A above.
VIII.Forfeiture Provisions
Upon separation from the service of the F.mployrr prior to artainment oFbenefit eligihiliry(as outlined in Section IX),or
upon reversion to thr�l�ust of a Participant's account assets remaining upon the participant's death(as oudined in Section XI),a
Partici�ant's non-vcstcd Funds shall (chcck onc hox):
❑' Remain in thc'I�ust to bc rcallocatcd among all rcmaining F.mployccs participating in thc Plan as Dircct F.mploycr
Contrihtitions for the next and succeeding contribution cyde(s).
❑ Rcmain in thc�T�ust to bc rcallocatcd on an cqual dollar basis among all Plan Participants.
❑ Remain in the�1'rust to he reallocated among all Plan Participants based upon Participant account balances.
❑ Revert to rhe Employcr.
IX. Eligibility Rcquircments to Rcccivc Mcdical Bcnefit Paymcnts from thc VantagcCare Retircment Hcalth Savings Plan
A. A Participant is eligible to receive benefics:
❑ At recirement only(also complete Section I3.)
C)cfinition of rctircmcnr.
❑ Samc as Scction VII.B.
❑ Othcr
� At separarion from service wich the following restriccions
❑� No restrictions
❑ Othcr
3
❑ At agc only
❑ At retirement and age(also complctc scction B)
[)cfinition of rctiremc:nr.
❑ Samc as Scc�ion VII.B.
❑ Othcr
❑ A� rc�ircment or age I�efinition of retirement:
❑ Samc as Scction VII.B.
❑ Ocher
❑ Othrr,specified as follows(also cornpletc Section H if aE�E�licablr):
B. Termination prior to gcncral bene6t eligibility: In the case where the general benefit eligibility as outlined in Section IX.A
includes a retirement component,a Pazticipant who sepazates from the service of the Employer prior to retirement will be
eligible to receive benefits:
❑ Immcdiatcly upon scparation from scrvicc.
❑ At agc
C. A Participant that becomes totally and permanently disabled will become immediately eligible to receive medical benefit
payments from his/her VantageCare Retirement Health Savings Plan account.
�' as defined by che Sucial Srcuriry Adtninistration
❑ as defined by the F,mployer's primary retirement plan
❑ onc�r
D. Upon the death of the Participant,benefits shall become payable as outlined in Section XI.
X. Permissible Medical Bene6t Payments
Bencfits eligible for reimbursrment cunsist of:
❑ All Medical Expenses eligible under IRC Section 213"ocher than (i)direct long-rerm care expenses,and(ii)expenses for
medicines or drugs which are not prescribed drugs(other than insulin).
❑' The following Medical Expeiises(eligible under IRC Section 213' other than(i)direct long-term care expenses>and (ii)expenses
for medicines or drugs which are not prescribed drugs(other than insulin). Select only the expenses you wish to cover under the
Vantage(,are Retirement Health Savings Plan:
�' Medical Insurance Premiums
❑ Mcdical Out-of-I'ockct P.xpcnscs"
❑' Medicare Part B Insurance Premiums
❑' Mcdicarc Part [)Insurancc Prcmiums
� Mcdicare Supplcmcntal Insurancc Premiums
0' Prescription Drug Insurancc Prcmiums
� COBftA Insurance Premiums
� Dental Insurance Premiums
❑ Den�al Ouc-of-Pocket Expenses'
0 Vision Insurance I'remiums
❑ Vision Out-of-Pockcr F.xpcnscsy
❑' Qualificd I.ong-'lerm Care Insurancc Prcmiums
❑ Non-Prescription medications allowed under IRS guidance'
❑ C)ther qualifying mrdical rxpenses(descrihe)'
"Nondiscrimination rules may apply to non-collrctively bargained,self=insured I'lans.
4
Xi. Benefits After the Death of the Participant
in thc cvcnt of a Parricipant's dcath, thc following shall apply:
A. Surviving Spouse and/or Surviving Dependenu
'Ihe stirviving spouse and/or surviving eligibly dependents(a�defincd in Seaion XII.U.) of rhe deccased Parrieipanr arc
immediately eligible to�naintain the account and ucilize ic co Fund eligible rnedical benefits specificd in Srction X above.
Upon notification of a Partic:ipanc's death, che Participant's acrount halance will he transferred into I�reyfus C;ash Management
fund' (or another fund selected by the}?mploycr). 'Ihe account balancc may be reallocated by thc surviving spouse or
dc�cndents.
' An investr�aent i�s the Dreyfr�s C,'ash Mar:agement money market fund is nnt ins:�rec!nrguaranteed by tbie Federal Deposit Insurunce
Corporation or an��othergonernment agenry.Although tbe fund seeks co preserve the value of your investment at$1.00 per share, rr
is possible to lose mnney by investrng in the fund. Investnrs shnuld ronsider the investrrzent nbjectiaes, risks, charges, and Pxpenses of
the fi�nd carefully before investing. You may visit us at wwu�.irmarc.org or call800-669-7400 ta obtain a prospectus that cor�tains
this and ot{ier informution ubout the fund. Read the prospectus carefully before innesting.
' ICMA-RC�nd irs affili�Tte, /C/L1A-RC..',Srrvices. Inc. ("RC:.S'ervices), receive pny»:ents frnm thr Drey,fus Cash,'Llanagement_funrl or
its service proc�iders in the fr�rm nf 126-1 fees,servire fees, compensation for srab-accounting,and other service�pror�ided by ICMA-
RC or RC Serr�ires.
If a Parricipant's account halance has noc been fully utilized upon the death oF the eligible spouse,the account balance may
continue eo be uiili�ed to pay benefits oCeligible depen�iencs. Upon che drach of all eligfbly depen�lents,the account �vill revert to
thc Plan to be applird as spccifird in Srction VI[i.
B. :�Io Surviving Spouse or Surviving Dependenu
If there are no living spouse or dependents at the time of dcath of thc I'articipant, thc account will revcrt to the Plan to br
applicd as spccificd in Scction VIII.
XII.'Ihe Plan will operate according to the following provisions:
A. Employer Responsibilities
l. 'Ihc Em�loycr will submit all VantagcCarc Rctircmcnt Hcalth Savings Plan contribution data via clectronic suhmission.
2. 'Ihe Lmployer will submit all VantageCare Rrtirement Health Savings I'lan Participant status updates or personal
informarion updates via electronic submission. This indudes bur is nor limired ro tennination notification and benefit
c:ligibiliry notific;ttion.
B. I'articipant account administration and asset-based fees will be paid through the redemption of Parricipant accc�unt shares,
unVcss agrccd upon othcrwisc in thc Administrativc Scrviccs Agrccmcnt.
C. Assignment ot henefits is not permitted. Renefits will be paid only to the I'articipant,his/her Survivors,thr Emplc�yer,or an
insurance provider(as allowed by the daims administrator). Payments to a third-parry payee(e.g.,medical service provider)
arc not permittcd with thc cxccption of rcimburscmcnt ro thc Employcr or insurancc providcr(as allowcd by thc claims
administraror).
D. An cligiblc dcpciidcnt is(a) dtc Participant's lawful spousc, (b) thc Participanr's child undcr thc agc of 27,as dcfincd by IR('
Section 152(f)(1)and Internal Revenue Service No�ice 2010-38,or(c)any other individual who is a person descrihed in IRC
Section 1 S2(a),as clarified by Inrernal Revenur Service Notice 2004-79.
E. "Ihe Lmployer will be responsible fix wi�hholding,reporting and rrmitting any applicable taxes for payments whirh are
deemed to he discriminarory under IRC Section 105(h),as oudined in thc VantagcCare Retircmcnt Hcalth Savings f'lan
Employcr Manual.
S
XIII. Employer Acknowledgements
A. 'Ihc limployer hrreby acknowlec{ges it un�lerstands that failure to properly fill out this Lmployer VantageCare Retirernent
Hcalth Savings Plan Adoption Agrccmcnt may result in thc loss ot tax cxcmption of thc Trust and/or loss of tax-dcfcrrcd
status for H mploycr contributions.
B. C;heck this box if you are including supporting documents that include plan provisions.❑
EMPL01'ER SIGNA7'URE
By: ____ _Date:
'I'itle:
Accepted:VANTAGEPOINT TRANSFER AGENTS,LLC
� �
/\ \\'�! '�1'v�t-,
By: � l" `� Date•
Assistant Secretary
6
ICMA RETIREMENT CORPORATION
GOVERNMENTAL MONEY PURCHASE PLAN 8� TRUST
ADOPTION AGREEMENT
PI.AN NUMBER 10-
Tlic EmNloycn c�reby establishcs a Moncy Piuchasc Plan and Trust to bc known as__________________________
---
Palm Desert401A ________��hc"Plan") in the form of the ICMA Retirement C.�orE�oration Govrrnmental Money Purchase
Plan and Trust (MPP 01/QU06).
"Ihis Plan is an amendment and re,tarement of an existing defined conrrihutiun moncy purchase plan.
� Ycs � :�Io
If}'es, please sE>ecify the natne o(the d�fined coniribu�ion money purchase plan which ehis Plan hcreby amends and rescate.:
I. Emp�oyer. Ciry of Palm Desert [902]
----------------------------------------
II. Zhe Effective Date of the Plan shall be the first day of the I'lan Year durin�;which the Employer adopts the ['lan,
unless an alternate l�ffective I)a�e is f�eref>y sE�ecifte�: January 1,2015 -------------------�e.�., �anuary 1,
20OG Fur thc MPP f)1/O1/UG P(an) .
III. Plan Year will mcan:
� "Ihe twelve(12; consecutive month perio<I which coinciiies wirh rhe limi�arion yeac (See Sec�ion i.0i(f)of thc
Plan.)
I�ZI "Ihe nvelve(12)consecutive month period commencing on�anuary�,20�5 __ and each annivrrsary thrreoF.
IV. Normal Retirement Age shall be age 55___(not to exceed age 65). [288]
V. ELIGIBILITY REQUIREMENTS:
1. The following group or groups of Employces are cliv�ible to par�icipatc in the Plan:
xXxx _ All Employees
_____ All l�ull't�ime H:�nployees
--- Salaried F,rnployr�s
----- Non union Ln�ployccs
____ Management Employees
_____ Puhlic Safety 1-:tn�loyees
----- Gcncral Employccs
Other Emplo}'ees(speciFy describe che group(s)of eligible
ci��ployccs bclow)
----------------------------------------
Tfie group sprcified iuttst correspond to a group of the sauie designation that is defined in the statutes,
or<Iinanccs, rulcs, rc�ttlations, �crsonncl manuals or othcr material in rffrct in thc statc or locality of chc
Employer.Also,the eligihiliry requirements for participation in the Plan cannot be such that Employees hecome
Partic:ipants only in the Plan Year in which the Employees terminate employment (i.e.,stand-alone final pay
plans).
1 Moncy Purchasc Plan Adoption Agrecmcnt
2. 7}ie F.m�loycn c�reby waives or rcduces the requirement of a twelve(12) month Perioc{of Scrvice For
parricipation. 'Ihe required Period of Service shall be(�vrite N/A if an EmE�loyee is eligible ro participate
upon employment) NIA-----------------'
If this waivcr or rcduccion is cicctcd, it shall apply to all E?rnployccs within thc Covcrcd Lmployrncnt
�.�:15SI�1C:3f1011.
3. A minimtim agc rcyuircment is hcreby spccificd for cli�ibility to participatc. 'Ihc minimum a�c
requirement is N�A__(not ro excerd a�r 21. Wrire N/A if no minimum age is declared.)
VI. CONTRIBUTION PROVISIONS
l. Zhe Employer shall contribute as follows:(Choose all thac apply,but at least one of Options A, R or C. [f
<.)ption A is not selcctcd, Employcr must pick up Partieipant Contrihutions uncicr Option B or Option C.)
Fixed Employer Contributions With or Without Mandatory Participant Contributions. Qf(�E�tion H
or C is chosen,please complece secrion [).)
� A. H�t�loyer Contributions. 'Ihe Employer shall concribute on behalf of each Parricipant
_______%of Earnings or$_______for the('lan Year(subject to thc limitaciuns uf Ariiclr V of
the Plan).
Mandatory Participant Contriburions
� are required � are not required
to be eligible for rhis Employer Conrribu�ion.
� [�. MandatorY I'articipant Convihutions for I'lan Partici�ation. A Participanc is required ro
contribure(subject to the li�nitations ofArtide V of the Plan)
(i) ----%of liarnings,
���� �-------�or
(iii) a wholr percentage of Earnings between the range of__________(iruert ranQe of
percentuAes between 0%ancl20%(c.g.,3%n, <%, nr20%; 5%to 7%J),as designated by the
Employee in accordance with guidelines and procedures rstahlished by the Employer
fi>r the Plan Year as a condition of participation in the Plan. A Participant shall not havr thr
right ro discontinuc or vary thc ratc of such contributions aftcn c�coming a Plan Participant.
�lhe!?mployer hereby elerts to"pirk up" the Mandatory Participaiit(:ontributions '(pick up
is required iE neither OE�tion A nor Option C is scicacd).
� Ycs � \(, [621]
[� C. Mandatory Participant Contributions for�his Porrion of thc Plan. Each Employcc cligiblc
ro participare in thc Plan shall bc givcn thc opportunity ro irrrvocably rlect to participatr
in thc Mandatory Participant Contribution portion of thc Plan by ciccting to contributc
0%_�0%0____________/insert range ofpercentaQes between 0%and 20% (e.g.,3%, 6%,or 20%;
5°ib to 7%))of thc F.mployrc's Earnings to thc Plan for cach Plan Ycar(subject to thc limitations
of Article V of thc Plan).
' Neitl�er an/RS arlvisory fetter nnr n�eterminntion Lrtter issued to�n adopting h.mp[nyer is a ru[ing by the/nterna[Xevenue Servire that
I'artiriparrt contrifiutions tfrat are pickrc/up fiy the L'�mp�oyrr are not inrluclafi�e in the Participant�gross incomr frir/�edrral incnme tax purpnsr.r.
1'ick-up ronh•ibutions nre not mandatetl to receive privale[etter r:rlinAs:however,ifan adapting employer wirhet to receive a rufing on pick-up
contributiora thry may request one in accorrlancr wirh Ret�enue Pracedure 2011-/t(orsubreyuent guidance).
Moncy Purchase Plan Adoption Agrecment 2
A Partici�ant shall not havc thc right to discontinuc or vary thc ratc of such contributions af�tcr
bccoming a I'articipant in this portion of thc Plan.
Thc Emvloyer liereby elects to"pick up" thc Manciatory Par�iciF�ant Contributions(pick up is
rryuircd if ncithcr Option A nor Option B is sclecte<{).Z [62�]
� Yes � No
U. Election Window(Complere iFOption [i or Option C is selectcd):
Newly eligible Employees shall be provided an elecrion window of so______days(no more than
C>0 calen�lar days)from the date of initial eligibility during which they may make the elrction to
participate in the Mandatory Participant Contribution portion of rhe Plan. Participa�ion in the
Mandatory Participant Contribution portion of thc I'lan shall bcgin thc(irst of thc rnonth (ollowin�;
thc cnd of thc cicction window.
An Employcc's cicction is irrcvocahlc and shall rcmain in forcc until thc}.mploycc tcrminata
employment or ceases to be eligible to parricipate in che 1'lan. In the event of re-employment to an
cligible position, chc F.mployce's ori�inal clection�vill resume. In no event does the F.mploycc havc
thr opeion of recriving die pick-up contribution amount directfy.
2. The Employ�e may also clect to contribute as follows:
� A. Fixed I�;m�lover Match of Voluntary Participant Contrihuti��ns.The F,mployer shall contrihute�n
bchalf of cach Participant___'%of Earnings for thc Plan Ycar(subjcct ro thc limitations of Artice
V of thr Planj Eor each 1'lan Year thac such 1'articipant has contributed___%>of Earnings or
5_____.___________. Undcr this option, thrrc is a singlc, fixrd ratc of Employcr conrrihurions, hut
a 1'arciiipant may decline co make che required Participant contributions in any Plan Year, in which
casc no Employcr conrribution will hc madc on thc Participant's hchalf in that Plan Ycar.
� I3. Variahlc Employcr Match of Voluntar�Partic�ant Contributions. Thc Employcr shall contributr on
behalf oFeach I'articipant an amount determined as tollows(subject ro the limitations of Article V of
the I'lan):
_____%of the Voluntary Participant Convibutions�nadc by thc Participant for thc I'lan Ycar(not
induding Participant contributions exceeding____%of Earnings or$_____);
P[.US____%oF thc contributions made by thc Participant fix thr Plan Year in cxcrss uf thuse
included in the above paragraph (but not including Voluntary Participant Contributions exceeding in
thc aggrcgatc____%�of Earnings or,b___ ).
Employcr Matching Contributions on bchalf of a Participant for a Plan Ycar shall not excccd
$_____or____%of Earnin�s,whichcvcr is__morc or___Icss.
i. Each Participant aiay makr a voluntary(unmatched),after tax contribution,subject to the limitations of
Scction 4.Q5 and Articic V of thc: Plan.
� Y�s I� No
4. h:mployer concrihucions fi�r a Plan Year shall br contrihuteel to thr Trust in accordance with the fi�llowing
payment schedule(no later than the 15th day of the tenth calendar month following the end of the calendar
year or fiscal year(as applicable depending on the basis on which the F.mployer kceps its books)with or within
which the particular Limitation year ends, or in accordance with applicable law):
Every pay period
' Ser foo�noie 1 on the previoru page.
3 Monry Purch:uc Plan Adoption Agrecment
5. Participant contributions fi�r a I'lan Year shall be contributed to the Trust in accordancc.with the following
payment schedule(no later than the 15�h day of the tenth calendar month following the end of the calendar year
or fisc.il year(as applicable depending on the basis on which the F.mployer keeps its books)with or within which
die particular Limitacion yrar ends, or in accordance with applicahle law):
Evcry pay period
VII. EARNINGS
F.arnin�s,as dc(incd undrr Scction 2.09 of thc I'lan,shall inclucic:
(a) Uvcr[intr
� Ycs � \o
(b) I�onuses
� Ycs L� \o
(c) <)ther I'ay(specifically describe aiiy other types of pa}-ro be induded belo�v)
-----------------------------------------------------------------------------
--------------------------------------------------------------------------------
VIII. The Employer will permit rollover contributions in accordance with Section 4.11 of the Plan.
� Yes � No
IX. LIMITATION ON ALLOCATIONS
If thc Employer maintains or cver maintainrd anodirr yua(ihed plan in which any I'articipant in this Plan is(or wa,)a
participant or could possibly become a participant, the Lmployer hereby agrcrs to limit contributions to all sttch plans
as provided herein,if necessary in order ro avoid excess contributions(as described in Sections 5.02 of rhe Plan).
l. If thc Parricipant is covcrcd undcr anothcr qualifir.c�dcfincd contribution plan maintaincd by thc F.mploycr, thc
provisions of Section 5.02(a) through (f) of the Plan will apply unless another method has been indicated below.
� <)rher Method. (Provide the method under which the plans will limic rotal Annual A�lditions ro the
Maximutn Vcrmissiblc Amount,and will proE�crly rcclucc any cxccss atnounts, in a manncr that prcdudcs
Employer discrction.)
2. �Ihe limitation yrar is the lollowing 12 consrcutive month prriod:
Money Purchase Plan Adoption Agreement 4
X. VES'1'ING PROVISIONS
Thc F,mploycr herehy spccifies the following vesting schcdule,suhject to(1) the minimum vesting rcquircmcncs and
(2) the concurrencc of the Plan Administrator. (For the blanks bclo�v,enter�hc applicable percent—from 0 to ]UU
(�vith no rntry aficr thc ycar in which 100%� is entcrcd), in asccnclin�orcicr.)
Period of Service Percent
Completed Vested
'I.cro o %
C)nc 20 %
Two 40 '%
'Ihrcc so �/,
l�our 80 %
Fivc �� '%
Six %
Seven %
1?ight %
Ninc %
'Ien %
XI. Loans are permitted under the Plan,as provided in Artide XI[[ of rhe I'lan:
L7 Yrs �1 ��> D51]
XI1.
1. In-service dis�ributions are permitred under the Plan after a participant attains(selecr one of rhe helow �646:8]
options):
❑ Normal Kctircmcnt A�;c
� Age 7()'/z
❑ Not permitred ar any age
2. Tax-free distrihurions of up ro$3,000 for the payment of yualifying insurance premiums for cligible
rrtirc�l public safcry o(Iicrrs are availablc undcr thc Ylan.
� Ycs Q No(Default)
[646:3]
XIII. In-srrvicr distributions of the Rollover Account are pr.nnitted undrr the Plan as pruvided in tiection 9.07.
[646:1]
� Yes � No(I�cfault)
XIV. SPOUSAL PROTECTION
�The Plan will provide the follo�ving Ievel of spousal protection (select one):
A. ❑ Participant I)irecred Election. The normal form of payment of benefits under the Pl.in is a lump sum. �646:6]
'lhc I'articipant can name any persun(a)as the L;eneficiary of�hr t'lan,with no spuusal consent reyuirrd.
13. � Beneficiary Spousal C:onsent Election (Artide Xll). �Ihe nunnal form of payment of benefits under [646:6]
the Plan is a lump sum. Upon death,the surviving spousc is the Beneficiary, unless he or she conscnts to
the Participant's naming ano�her Brne6ciary. ("Ihis is the default provision under the I'lan if no selection
is madc.)
(�. I� QJSA Election(Artide XVI[). �Ihe normal form o�paytnrnt of henrfits uncler the Plan is a 50%yualific� [642:6]
joint and survivor annuiry with thc spousc(or fife annuity, if singlc). In �hc cvcnt of thc Participanr's
�le:1tl]F)[WC IU CUR1tIlCIIG(l��3Y1]]CIl(S, thr spouse will recrive an annuiry for his or her lifeti�ne. I646:6]
5 Money Purchasc Plan Adoption Agreement
XV. FINAL PAY CONTRIBUTIONS
�Ihr I'lan will provide for Final Pay Contributions if either 1 or Z below is selected.
Final Pay shall be defined as(select one):
A. � Accrued unpaid vacarion
F3. � Accrucd unpaid sick Icavc
C. ❑ Accrued unpaid vacation and sick leave
D. � ()ther(inscrr definition of final pay):-----------------------------------------------
that would otherwise be payablc ro thc�mployee in cash upon termination.
l. � Employer Final Pay Contribution.'Ihc Employcr sFall contribwc on bchalf of cach I'articipanr
_________%of I�inal I':ty t<�the 1'lan (suhject t��the limitations of Articlr V of the 1'lan).
2. � Employee Designated Final Pay Contribution. Each Employee eligible co participate in the I'lan shall be
givcn the:op�ortunity at enrollment co irrevocably eJect to c�ntriUute_____%(insert 6xrd perccntagc o!�final
pay�o be contributed) or up ro_______%(insert�naxi�num �rrcentage of final pay ro be contriburee{)of
Final Pay to thc Plan (subjcct to thc limitations of Arricic V<�f thc Vlan).
Once cicctcd,an Prnploycc's;Icction shall remain in forcc and may not hc rrvi,rd or rcvc�kcd. !f thc cmploycr
elects to"pick u�" these amounrs, in nn event does thr l;mployee have the option�>f receiving the pick-up
conrrihution amount dircctly.
The Ernplo��er hereby clects ro"pick up" thr E:mployec Designared Final I'ay Contribution thercby trcatin�;
such contributions as Employer-made contributions tor federal income tax purposes.
� Yrs � :�o �621]
XVI. ACCRUED LEAVE CONTRIBUTIONS
The Plan will provide for accrued unpaid Ieave contributions if either 1 or 2 is selected below.
Accrued Leave shall be defined as(select one):
A. � Accrued unpaid vacation
f3. Q Accrucd unpaid sick lcave
C. Q Accrucd unpaid vacarion and sick leavc
[�. � Othcr(inscrt deGnition of final pay:-------------
------------------------------
that would othrrwise be payable to the Employce in cash.
1. � Employer Accrued Lxave Contribution. '[hr Employer shall contribute as follows(choose one of the
Following options):
� For cach 1'lan Ycar, thc Employcr shall contributc on bchalf of cach Eligihlc Participant thc unusc�l
Accrurd Leave in excess of (insert number of huurs/days/w�reks) ro the Plan(�ubj�a cu �h�
limitations of Artidc V of thc Plan).
� For each Plan Year>the F.mployer shall contribute on hehalf of each F,ligible Participanc________%of
unusrd Accrued Leave to the Plan(subjrct to the limitations oFArticle V of the Plan).
Monry Purrhasc Plan Adoption Agreemenr G
� 2. Employee Designated Accrued Leave Contribution.
Each cligihlc Participant shall bc givcn �hc opportuniry at cnrolimcn�to irrcvocably cicct to contributc
_____%(inscrc fixed percentage of accrued unpaid Icavc to bc contributcd)or up to______%(insert
maximum percentage of accrued unpaid Ieave to be contributed) of Accrued Leave to rhe Plan(subject ro thr
limications of Artide V of the Plan).
Oncr elected,an limployee's election shall remain in force and may not be revised or revoked. If die etnployer
clrcts ro"pick up'� thcsc amounts, in no cvcnt docs thc I{mploycc havc thc option of rcceivin�thc pick-up
contribution amowit direcdy.
The Employer hereby elects ro"pick up" the Employee Designared Final Pay Contribution chereby treating
such contributions as Employer-tnade contributions for federal income tax purposes.
�1 Yr, � :�� [621]
In ordcr to allow fi>r l�inal Pay Contributions and/or Accnicd Lcavc Contributions,as defincd in scctions XV aiid �VI
:�bovc, ihc I'lan�nust also includc additional sourccs of ongoing contriburions,such as Fixcd Employcr Contributions
��r Mandau�ry Parci�ipant(:ontributions. In accordancc with IRS Guidancc, ICMA-K(�will not prorrs� l�inal Pay
Contribution or Acrrucd I.cavc C�ontrihution Fcatures as part uCa"Stand Alonc" Final I'ay Plan.
XVII. Ihe Employer hereby attests that it is a unit of state or local government or an agency or instrumentaliry of one or morc
units of state or local govcrnmcnt.
XVIII. �Ihc Plau Administraton c�rebv agrees to infor�n the Lmployer of any aniendments to thc Plan madc purouant to
Scction 14.05 of thc Plan or of thc diseontinuancc or abandonment of thc Plan.
XIX. The F.mployer herehy appoints the I(�MA Retirement Corporation as the Plan Administrator pursuant ro the tertn;
and conditions of thc IC;MA RE'I'IREMEN'1'CC)RPURA'I�IC)N C;C)VERNMEN'1'AL MONF.Y PURCf-�ASE
PI.AN &'1'RUti"1'.
Thc Employcn c�rcby agrccs ro thc provisions of thc Plan an<i�I'rust.
XX. 'Ihc F:inploycn c�rrby aeknowlyd�,es it undcrstands thai failurc iu properly fill out this Adoption A�;rrcmcnt may resul�
in disyualification of th�Plan.
XXI. An adopring F.mployer may rely on an advisory letter issued by the Internal Revenue Service as evidence that the
Plan is yualified under section 401 of the Internal Revenue Code eo the extent provided in applicable IRti revenue
procedures and other official guidance.
In Witness Whereof,the�tnployrr herrhy causes this Agreement tu br executed on this_____day of
---------------�20---�
EMPLOYER ICMA KL"1�1}ZL;ML:\"1'CORPORA"I'1C)N
777 North Capitol tit., NE
Washington, UC 20002-4240
202-9C2-A09C
Hy: Hy:
Prini Namr. Print Namc:
'I'itle: 'l�itle:
Ac�csc: Attesr.
7 Money Purchase Ylan Adoption Agreement
ADMINISTRATIVE SERVICES AGREEMENT
Between
ICMA Retirement Corporation
and
City of Palm Desert
Type: 401
Account#: 107963
C;S
Plan number 107963
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement("Agreement"), made as of the day
of , 2014 (herein referred to as the "Inception Date"), between the International
City Management Association Retirement Corporation ("ICMA-RC"), a nonprofit
corporation organized and existing under the laws of the State of Delaware, and the City
of Palm Desert("Employer"), a City organized and existing under the laws of the State of
California with an office at 75-510 Fred Waring Drive, Palm Desert, California 92260.
RECITALS
Fmployer acts as public plan sponsor of a retirement plan ("Plan"), and in that
capacity, has responsibility to obtain administrative services and investment alternatives
forthe Plan;
Vantage'I�rust (the "�I'rust") is a group trust established and maintained in
accordance with New Hampshire Revised Statutes Annotated section 391:I and Internal
Revenue Service Revenue Ruling 81-10U, 1981-1 C.B. 326, which provides for the
commingled investment of retirement funds held by various state and local governmental
units for their employees;
ICMA-RC acts as investment adviser to VantageTrust Company, LLC, thc
Trustee of the Trust;
1CMA-RC has designed, and the Trust offers, a series of separate funds (the
"Funds") for the investment of plan assets as referenced in the Trust's principal
disclosure document, "Making Sound Investment Decisions: A Retirement Investment
Guidc" and the accompanying VantageTrust Fund Fees and Expenses document
("Retirement Investment Guidc").
The Funds are available only to public employers and anly through the Trust and
ICMA-RC.
In addition to serving as investment adviser to the Trust, ICMA-RC provides a
range of services to public employers for the operation of employee retirement plans
including, but not limited to, communications concerning investment alternatives,
account maintenance, account recordkeepin�, investment and tax reporting, transaction
proccssing, bencfit disburscmcnt, and asset management.
2
Plan number 107963
AGREEMENTS
1. A�pointment of[CMA-RC
Employer hereby appoints ICMA-RC as Administrator of the Plan to perform all
nondiscretionary functions necessary Cor the administration of the Plan. The funciions to
be performed by 1CMA-RC shall be those set forth in Exhibit A to this Agreement.
2. Adoption of Trust
Employer has adoptcd the Declaration of Trust of VantageTrust Company and agrees to
the commingled investment of assets of the Plan within the Trust. Employer agrees that
operation of�thc Plan and the investment, management, and distribution of amounts
deposited in the Trust shall be subjcct to the Declaration of Trust, as it may be amendcd
from time to time and shall also be subject to terms and conditions set forth in disclosurc
documents (such as the Retirement Investment Guide or Employer Bulletins) as those
tcrms and conditions may be adjusted from time to time.
3. Emploti-er Dut�to Furnish Information
Employer agrees to furnish to ICMA-RC on a timely basis such information as is
necessary for ICMA-RC to carry out its responsibilities as Administrator of the Plan,
including infoimation needed to allocate individua] parlicipant accounts to Funds in the
Trust, and information as to the employment status of participants, and participant ages,
addresses, and other identifying information (including tax identification numbers).
Employer also agrees that it will notify ICMA-RC in a timely manner regarding changes
in staff as it relates to various roles. This is to be completed through the online EZLink
employer contact options. ICMA-RC shall be entitled to rely upon the accuracy of any
information that is furnished to it by a responsible official of the Employer or any
information relating to an individual participant or beneficiary that is furnished by such
participant or bcneficiary, and ICMA-RC shall not be responsible for any enor arising
fiom its reliance on such information. ICMA-RC will provide reports, statements and
account information to the Employer through EZLink, the online plan administrative tool.
Employer is required to send in contributions through EZLink, the online plan
administration tool providcd by 1CMA-RC. Alternative electronic methods may be
allowcd, but must be approved by ICMA-RC for usc. Contributions may not be sent
through paper submittal documcnts.
To the extent Employer selects third-party funds that do not have fund profile
information provided to ICMA-RC through our electronic data feeds from external
sources (such as Morningstar) or third party fund providers, the Employer is responsible
for providing to ICMA-RC timely fund investment updates for disclosure to Plan
participants. Such updates may be provided to ICMA-RC through the Employer's
investment consultant or other designated representative.
3
Plan number 107963
Failure to provide timely fund profile update information, including thc sourcc of thc
inlormation, may result in a lack of fund information for participants, as ICMA-RC will
remove outdated fund profile information from the systems that provide fund information
to Plan participants.
4. Certain Representations and Warranties
ICMA-RC represents and warrants to Employer that:
(a) ICMA-RC is a non-profit corporation with full power and authority to
enter into this Agreement and to perform its obligations under this
Agreement. The ability of IC'viA-RC to serve as investment adviser to the
Trust is dependcnt upon the continued willingness of the Trust for ICMA-
RC to scrvc in that capacity.
(b) ICMA-RC is an investment adviser registered as such with the U.S.
Securities and Exchange Commission under the Investment Advisers Act
of 1940, as amcndcd. ICMA-RC Scrvices, LLC (a wholly�owncd
subsidiary of ICMA-RC) is registered as a broker-dealer with the U.S.
Securities and Exchange Commission (`'SEC") and is a member in good
standing with Financial Industry�Regulatory Authority ("FINRA'') and the
Securities Investor Protection Corporation ("SIPC").
(c) ICMA-RC shall maintain and administer the Plan in compliance with the
requirements for plans which satisfy the qualification requirements of
Section 40l of the Internal Revenue Code and other applicable federal
law; provided, however, ICMA-RC shall not be responsible for the
qualified status of the Plan in the event that the Employer directs ICMf1-
RC to administer the Plan or disburse assets in a manner inconsistent with
the requirements of Section 401 or otherwise causes the Plan not to be
camed out in accordance with its terms; provided, f'urther, that if the plan
documcnt uscd by thc Employcr contains tcrms that diffcr f'rom thc tcrms
of ICMA-RC's standardizcd plan documcnt, ICMA-RC shall not bc
responsible for the qualified status of the Plan to the extent affected by the
differing terms in the Employer's plan document. ICMA-RC shall not be
responsible Cor monitoring state or local law or for administering the Ylan
in compliancc with local or statc rcquircmcnts unlcss Employcr notifics
ICMA-RC of any such local or state requirements.
Employer represents and warrants to ICMA-RC that:
(d) Employer is organized in the form and manner recited in the opening
paragraph of this Agreement with full power and authority to enter into
and perform its obligations under this Agreement and to act for the Plan
and participants in the manner contemplated in this Agreement. Execution,
delivery, and performance of this Agreement will not conflict with any
4
Plan number 107963
law, rule, regulation or contract by which thc Employer is bound or to
which it is a party.
(e) Employer understands and agrees that ICMA-RC's sole function undcr
this Agreement is to act as recordkeeper and to provide administrative,
investment or other services at the direction of Plan participants, the
Employer, its agents or designees in accordance with the terms of this
Agreement. Llnder the terms of this Agreement, ICMA-RC does not
render investrnent advice, is not the Plan Administrator or Plan Sponsor as
those terms are defined under applicable federal, state, or local law, and
does not provide legal, tax or accounting advice with respect to the
creation, adoption or operation of the Plan and the Trust. ICMA-RC does
not perform any service under this Agreement that might cause ICMA-RC
to be treated as a"fiduciary" of the Plan under applicable law.
(fl Employer acknowledges and agrees that ICMA-RC does not assume any
responsibility with respect to the selection or retention of the f'lan's
investment options. Employer shall have exclusive responsibility for the
Plan's investment options, including the selection of the applicable mutual
fund share class. Where applicable, Employer understands that the VT
Rctircmcnt [ncome Advantage Fund is an investment option for thc Plan
and that the fund invests in a separate account available through a group
variable annuity contract. By entering into this Agreement, Employer
acknowledges that it has received the Important Considerations document
and the Retirement Invcstmcnt Guide and that it has read the information
therein concerning the VT Retirement Income Advantage Fund.
(g) Employer acknowledges that certain such scrvices to be performed by
ICMA-RC under this Agreement may be performcd by an affiliate or
agent of ICMA-RC pursuant to one or more other contractual
arrangements or relationships, and that ICMA-RC reserves the right to
change vendors with which it has contracted to provide services in
connec;tion with this Agreement without prior notice to Employer.
(h) Employer acknowledges that it has received 1CMA-RC's Fee Disclosurc
Statement, prepared in substantial conformance with ERISA regulations
regarding the disclosure of fees to plan sponsors.
(i) Employer approves the usc of its Plan in ICMA-RC external media,
publications and materials. Examples include press releases
announcements and inclusion of the general plan information in request
for proposal responscs.
5
Plan number lU7)63
5. Participation in Ccrtain Proceedin�s
The Employer hereby authorizes ICMA-RC to act as agent, to appear on its behalf, and to
join the Employer as a necessary party in all legal proceedings involving the garnishment
of benefits or the transfer of benefits pursuant to the divorce or separation of participants
in the Plan. Unless Employer notifies ICMA-RC otherwise, Employer consents to the
disbursement by ICMA-RC of benefits that have been garnished or transferred to a
former spouse, current spouse, or child pursuant to a domestic relations order or child
support order.
6. Comkensation and Pavment
(a) Plan Administration Fee. The amount to be paid for plan administration
services under this Agreement shall be 0.29% per annum of the amount of
Plan assets invested in the Trust. Such fee shall be computed based on
average daily net Plan assets in the Trust.
(b) Mutual Fund Services Fee. There is an annual charge of 0.00% asscsscd
against averagc daily nct Plan asscts invcstcd in thc Trust's non-
proprietary Trust Series funds.
(c) Compensation for Management Services to the Trust, Compensation
for Advisory and other Services to The Vantagepoint Funds and
Payments from Third-Party Mutual Funds. Employer acknowledges
that in addition to amounts payable under this Agreement, ICMA-RC
receives fees from the Trust for investment advisory services and plan and
participant services furnished to the Trust. Employer further acknowledges
that certain wholly owned subsidiaries of ICMA-RC receive compensation
for advisory and other services furnished to The Vantagepoint Funds,
which serve as the underlying portfolios of a number of Funds offered
through the Trust. For a Trust f'und that invcsts substantially all of its
assets in a third-party mutual fund not affiliated with ICMA-RC, ICMA-
RC or its wholly owned subsidiary receives payments from the third-party
mutual fund families or their service providers in the form of 12b-1 fees,
service fees, compensation for sub-accounting and other services provided
bascd on asscts in thc underlying third-party mulual fund. These fees arc
described in the Retirement Investment Guide and ICMA-RC's Fee
Disclosure Statement. In addition, to the extent that third party mutual
funds are included in the investment line-up for the Plan, ICMA-RC
receives administrative Cees from its third party mutual fund settlement
and clearing agent for providing administrative and other services based
on assets invested in third parly mutual funds; such administrative fees
come from payments made by third party mutual funds to the settlement
and clearing agent.
(d) Redemption Fees. Redemption fees imposed by outside mutual funds in
which Plan assets are invested are collected and paid to the mutual fund by
6
Plan number 107963
ICMA-RC. ICMA-RC remits 100% of�redemption fees back to thc
specific mutual fund to which redemption fccs apply. These redemption
fccs and the individual mutual fund's policy with respect to redcmption
fees are specified in the prospectus for the individual mutual Cund and
referenced in the Retirement Investment Guide.
(e) Payment Procedures. All payments to ICMA-RC pursuant to this
Section 6 shall be made from Plan assets held by the Trust or received
from third party mutual funds or their service providers in connection with
Plan assets invested in such third party mutual funds, to the extent not paid
by the Employer. The amount of Plan assets held through the Trust shall
be adjusted by the Trust as required to reflect any such payments as are
made from Plan assets invested in the Trust. In the c��ent that the
Employer agrees to pay amounts owed pursuant to this section 6 directly,
any amounts unpaid and outstanding aftcr 30 days of invoice to the
Employer shall be withdrawn from Plan assets held by the Trust.
The compensation and payment set forth in this section 6 is contingent upon the
Employer's use of ICMA-RC's EZLink system for contribution processing and
submitting contribution funds by ACH or wire transfer on a consistent basis over the
term of this Agreement.
7. Contribution Remittance
Employer understands that amounts invested through the Trust are to be remitted directly
to the Trust in accordance with instructions provided to Employer by ICMA-RC and are
not to be remitted to ICMA-RC. In the event that any check or wire transfer is incorrectly
labeled or transferred to ICMA-RC, ICMA-RC may return it to Employer with proper
instructions.
8. Indemnification
ICMA-RC shall not be responsible for any acts or omissions of any person with respect
to thc Plan or related 7'rust, other than ICMA-RC in connection with the administration
or operation of the Plan. Employer shall indemnify ICMA-RC against, and hold ICMA-
RC harmless from, any and all loss, damage, penalty, liability, cost, and cxpense,
including without limitation, reasonable attorne}�'s fees, that may be incurred by, imposed
upon, or asserted against ICMA-RC by reason of�any claim, regulatory proceeding, or
litigation arising from any act done or omitted to be done by any individual or person
with respect to the Plan or related Trust, excepting only any and all loss, damage, penalty,
liability, cost or expense resulting from ICMA-RC's negligence, bad faith, or willfiil
misconduct.
9. Term
This Agreement shall be in effect and commence on the date all parties have signed and
e�cecuted this Agreement ("[nception I)ate"). This Agreement will be renewed
7
Plan number 107963
automatically for each succeeding year unless written notice of termination is provided
by either party to the other no Icss than 60 days before the end of�such Agrecmcnt ycar.
The Employer understands and agrees that, in the event the Employer ierminates this
Agreement (or replaces the VT PLUS Fund as an investment option in its investment
line-up), ICMA-RC retains full discretion to release Plan assets invested in the VT PLUS
Fund in an orderly manner over a period of up to 12 months fmm the date ICMA-RC
receives written notification from the Employer that it has made a final and binding
selection of a replacement for ICMA-RC as administrator of the Plan (or a replacement
investment option for the VT PLUS Fund).
10. Amcndmcnts and Adjustments
(a) This Agreement may be amended by written instrument signed by the parties.
(b) ICMA-RC may amend this agreement by providing 60 days' advance written
notice lo the Employer prior to the effectivc date of such proposed amendment.
Such amendment shall become effective unless, within the 60-day notice period,
thc Employcr notifies ICMA-RC in writing that it objects to such amendment.
(c)The parties agree that enhancements may be made to administrative and
operations services under this Agreement. The Employer will be notified of
enhancements through the Employer Bulletin, quarterly statements, electronic
messages or special mailings. Likewise, if thei•e are any reductions in fees, lhese
will be announced through the Employer Bulletin, quarterly statement, electronic
or special mailing.
I1. Notices
All notices required to be delivered under this Agreement shall be in writing and shall be
delivered, mailed, e-mailed or faxed to the location of the relevant party set forth below
or to such other address or to the attention of such other persons as such party may
hereafter specify by notice to the other party.
ICMA-RC: Lcgal Dcpartmcnt, ICMA Retirement Corporation, 777
North Capitol Strcct, N.E., Suitc 600, Washington, D.C., 20002-4240
Facsimilc; (202) 962-4601
Employer: at thc officc set forth in thc first paragraph hcrcof, or to any
other address, facsimile number or e-mail address designated by the
Employer to receive the same by written notice similarly given.
Each such notice, request or other communication shall be effective: (i) if given by
facsimile, when transmitted to the applicable facsimile number and there is appropriate
confirmation of receipt; (ii) if given by mail or e-mail, upon transmission to the
designated address with no indication that such address is invalid or incorrect; or (iii) if
given by any other means, when actually delivered at the aforesaid address.
8
Plan number 107963
12. Complete A�reemcnt
This Agreement shall constitute the complete and full understanding and sole agreement
between ICMA-RC and Employer relating to the object of this Agreement and correctly
sets forth the complete rights, duties and obligations of each party to the other as of its
date. This Agreement supersedes all written and oral agreements, communications or
negotiations among the parties. Any prior agreements, promises, negotiations or
representations, verbal or otherwise, not expressly set forth in this Agreement are of no
force and effect.
13. Titles
The headings of Sections of this Agreement and the headings for each of the attached
schedules are for convenience only and do not define or limit the contents thereof.
14. Incor��oration of Schcdules
All Schedules (and any subsequent amendments thereto), atlached hereto, and referenced
herein, arc hcreby incorporated within this Agreement as if set forth Iully herein.
15. Governin l�
This Agreement shall be governed by and construed in accordance with the laws of the
State of California, applicable to contracts made in that jurisdiction without reference to
its conflicts of laws provisions.
9
Plan number 107963
In Witness Whereof, the parties hereto certify that they have read and undcrstand this
Agreement and all Schcdules attached hereto and have caused this Agreement to be
executed by their duly authori�ed officers as of the Inception Date Crst above written.
CITY OF PALM DESERT
By Date
Signature
Name and Title (Please Print)
INTERNATIONAL CITY MANAGEMENT ASSOCIATION
RETIREMENT CORPORATION
Bii . . �4 ' • r � r _ I ` ,
Y � �
Angela C. Monte� �'
Assistant Corporate Secretary
Please return fully executed contract to: New Business Unit
ICMA-RC
777 North Capitol Street NE
Suitc 600
Washington DC 20002-4240
10
Plan number ]07)63
Exhibit A
Administrative Services
The administrative services to be perCormed by ICMA-RC u�ider this Agreement shall be
dS fUl10WS:
(a) Participant enrollment services, including providing a welcome package and
enrollment kit containing instructions and notices necessary to implement
the Plan's administration. �mployees will enroll online or through form.
ICMA-RC will provide an enrollment link through thc general ICMA-RC
web site. Plan sponsor will also make available the online enrollmcnt link in
thcir Intranet site or via cmail to new employccs. Employer can also enroll
employees through EZLink.
(b) Establishment of participant accounts for each employee participating in the
Plan for whom ICMA-RC reccives appropriate enrollment instructions.
ICMA-RC is not responsible for determining if such Plan participants are
eligible under the terms of the Plan.
(c) Allocation in accordance with participant directions received in good
order of individual participant accounts to investment funds offered under
the Plan. Participants can complete allocations through Investor Services,
Voice Rcsponse System or through Account Access, the secure participant
online system provided by ICMA-RC.
(d) Maintenance of individual accounts for participants reflecting amounts
deferrcd, income, gain or loss credited, and amounts distributed as
bcnefits.
(e) Maintenance of records for all participants for whom participant accounts
have been established. These files shall include enrollment instructions
(provided to ICMA-RC through Account Access, EZLink or form),
beneficiary designation instructions and all other documents concerning each
participant's account,and if applicable, records of'any transaction conducted
through the Voice Response Unit ("VRU"),Account Access or other
cicclronic means.
(f) Provision of periodic reports to thc Employer through E"LLink.
Participants will have access to account information through Investor
Services, Voice Response System, Account Access and through quarierly
statements that can be delivered electronically through Account Access or
by postal scrvicc.
(g) Communication to participants of'information rcgarding their rights and
elections under the Plan.
(h) Making available Investor Services Representatives through a toll-frec
tclephone number trom 8:30 a.m, to 9:00 p.m. Eastern Time, Monday
through Friday(excluding holidays and days on which the securitics
11
Plan number 107963
markets or ICMA-RC are closed for business (including cmcrgency
closings), to assist participants.
(i) Making available a toll-free number and access to VantageLine, ICMA-
RC's interactive VRU, and ICMA-RC's web site, to allow participants to
access cerlain account information and initiate plan transactions at any
time. Account access and VantageLine are normally availablc 24 hours a
day, seven days a week except during scheduled maintenance
periods designed to ensure high-quality performance. The scheduled
maintenance window is outlineci at https://harperl.icmarc.or��jsp
(j) Distribution of benefits as agent for the Employer in accordance with
terms of the Plan. Participants who have separated from service can
request distributions through Account Access or via form.
(k) Upon approval by the Employer that a domestic relations order is an
acceptable qualified domestic relations order under flle terms of the Plan,
ICMA-RC will establish a separate account record for the alternate payee
and provide for the investment and distribution of assets held thereunder.
(1) Loans may be madc available on the terms specified in lhe Loan Guidelines,
if loans are adopted by the Employer. Participants can request loans through
Investor Services or Account Access.
(m) Guided Pathways—Participant Advice and Guidance may be made
available through a third party vendor on the terms specificd on ICMA-
RC's website.
(n) ICMA-RC will determine appropriate delivery method (electronic and/or
print) for plari sponsor/participant communications and education based on
a number of factors (audience, effectiveness, etc.)
12