HomeMy WebLinkAboutAGMT - Public Agency Retirement System (Agmt for Admin Svcs) THE CITY OF SEAL BEACH
PUBLIC AGENCY RETIREMENT SYSTEM
ALTERNATE RETIREMENT SYSTEM
(PARS-ARS)
AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 2007
TABLE OF CONTENTS
Page
INTRODUCTION........ ......... .......... ...... . .......................,,............,. .....,.., .,................,..,........,..2
DEFINITIONS............ ......... ......... ............—............... ........, ......... ......... ,,,..........,..........,,.,,,,,,3
ELIGIBILITY REQUIREMENTS FOR PARTICIPATION...........................................................6
2.1 Time of Participation.....................---..........-.....,....... ,.........,,............,..... . .....................6
2.2 Termination of Participation .......... ......... ......... ......... ................... ......... ... ..... .............6
2.3 Effect of Transfer to Ineligible Employment...... ........ ......... ......... ......... ......... .............6
2.4 In Service Distributions—, ......... ......... ................... ......... ......... ......... .............6
CONTRIBUTIONS..................--...---............... ......... .,....... ................... ....,,............. .,,,.,,,...,.7
3.1 Amount of Employer Contributions... ..... ......... ......... .............7
3.2 Amount of Employee Contributions ....,,,,. ........... ........ ......... ........ ......... ............. 7
3.3 Administrative Expenses......................................................................................................7
3.4 Allocation of Administrative Expenses..... ................... ........ ......................... ............7
3.5 Limits on Annual Additions...................... ......... .......... .......... .... .. ...... .. ......... .............7
3.6 Vesting....,,......... ...... ..... ..--.... ..... ............,........ ........................ 8
3.7 Investment in Accordance With Act.................................................................................... 8
3.8 Reversions........ ......... .........--...... ........, ....,.,,. ,.,,...., ..,...... ,,....... ........, ..,...... ............, 8
FUNDINGAND VALUATION.....................................................................................,,....,......,,,..9
4.1 Funding. ...............................................................................................................................9
4.2 Valuation..............................................................................................................................9
4.3 Type and Nature of Plan and Trust............................................................................... .......9
VESTING ...................................................................................................................................... 10
5.1 Vesting in Employer Contribution Account....................................................................... 10
5.2 Vesting in Employee Contribution Account...................................................................... 10
5.3 Full or Partial Termination.................................. . ...... ,,. ......... ...,,,.,.,...,.,,.,...,,...,., 10
DISTRIBUTION OF BENEFITS ....... ..... .............. ......... ......... ......... ........... 11
6.1 Incidental Death Benefits..... .......... ......... ........ .......... ......... ........ ............... .... ........... 11
6.2 Amount of Distribution.—...... .......... ....... ......,......., 11
6.3 Lump Sum Distributions............ ... ......... ................... ......... ......... ...... .. ......... ...„ ..,,. 11
6.4 Time of Distribution......................................................................... 11
6.5 Participant's Rights Not Subject To Execution .................................................................. 12
oMM us:479087o.4 _i_.
TABLE OF CONTENTS
(continued)
Page
6.6 Unclaimed Benefits... ......... ......... ......... ......... ................... ......... ..,.,,.., ..,..,.., ....,.,.... 12
6.7 Direct Rollovers ......... .............................. ......... ................... ......... ...,............... ........... 12
6.8 Military Service........... ........ . .... ............... . .. ......... .............. .... ......... ......... ........... 14
DEATHBENEFITS........................................................ ......... ...,,..... ...,..... ..,...... ......... ........... 15
7.1 Designation of Beneficiary.............................. ......... ........,..., ....., ,.., ..... ...................,, 15
7.2 Married Participant................................... ...... ....,.....,,............,.,... ...,,...... 15
7.3 Spouse's Signature.............................................................................................................. 15
7.4 Default Beneficiary.... ......... ......... ......... ..................... ......... ,........ . ..................---- 15
7.5 Domestic Partners.......... ...... ........... ....... ......... ......... ................ .. ......... ......... ........... 15
ADMINISTRATION AND AMENDMENT OF PLAN............................................................... 17
8.1 Designation of Plan Administrator—,......... ..... ........... 17
8.2 Rules and Regulations 17
8.3 Amendment and Termination................... .....,.... . ..... ....,.....,..,.,. ........ ....,..... 17
ANNUAL ADDITION LIMITS ................ ......... ......... ......... ......... ......... ......... ......... ........... 18
9.1 Construction. — ......... ......... ......... ......... ......... ......... ......... ......... .........— .................. 18
9.2 Definitions.......................................................................................................................... 18
9.3 Annual Addition Limitations.......... .............................. ........ ......... ........ . ...,...., 19
OMM US:4790870.4 -ii-
INTRODUCTION
The City of Seal Beach (the 'Employer") has adopted this tax qualified governmental
profit sharing plan for the benefit of its Eligible Employees. This document is a full and
complete amendment and restatement of the City of Seal Beach PARS Alternate Retirement
System.
It is intended that this Plan and the Trust established to hold the assets of the Plan
shall be qualified under Section 401(a) and tax-exempt under Section 501(a) of the Internal
Revenue Code of 1986, together with any amendments thereto ("Code"). It is also intended
that this Plan and the Trust established hereunder shall meet the requirements of a
governmental plan under Section 414(d) of the Internal Revenue Code and of a pension trust
under California Government Code Sections 53215 - 53224, or their successor Sections
("Act"). At any time prior to the satisfaction of all liabilities with respect to Participants and
their Beneficiaries under the Trust created pursuant to this Plan, the Trust assets shall not be
used for, or diverted to, purposes other than the exclusive benefit of Participants or their
Beneficiaries, as prescribed in Section 401(a)(2) of the Code.
It is intended that the Plan satisfy the requirements of the applicable provisions of the
Uruguay Round Agreements Act, the Small Business Job Protection Act, the Taxpayer Relief
Act of 1997 and the Uniformed Service Employment and Reemployment Rights Act of 1994
(commonly referred to as the "GUST" amendments) and that the provisions of this restated
Plan reflecting the GUST amendments are hereby made effective as of the dates required by
the legislation referred to in this sentence.
It is further intended that the Plan satisfy the requirements of the applicable
provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 and the
related requirements of the revisions to Section 401(a)(9) of the Code (commonly referred to
as "EGTRRA") and that the provisions of this restated Plan reflecting EGTRRA are hereby
made effective as of the dates required by the legislation referred to in this sentence.
It is further intended that the Plan satisfy the requirements of the applicable
provisions of legislation enacted subsequent to EGTRRA, including the Pension Protection
Act of 2006 (commonly referred to as the TPA") and the Heroes Earnings Assistance and
Relief Tax Act of 2008 (commonly referred to as the "HEART Act") and that the provisions
of this restated Plan reflecting such subsequent legislation (including the PPA and the
HEART Act) are hereby made effective as of the dates required by the legislation referred to
in this sentence.
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ARTICLE I
DEFINITIONS
1.1 "Account" means, with respect to each Participant, the value of all accounts
maintained on behalf of the Participant.
1.2 "Act" means California Government Code Sections 53215 - 53224.
1.3 "Aggregate Account" means, with respect to each Participant, the value of all
accounts maintained on behalf of the Participant, whether attributable to Employer or
Employee contributions.
1.4 "Amended Effective Date" means January 1, 2007.
1.5 "Beneficiary" means the person, trust or other entity to whom a share of a
deceased Participant's Aggregate Account is payable.
1.6 "Code" means the Internal Revenue Code of 1986 as amended from time to time.
1.7 "Compensation" means all compensation for that portion of the Plan Year during
which the Employee was a Participant, paid in cash by the Employer to the
Participant for personal services. Further, the Employer as defined in Section 1.13
hereof, defines compensation as base salary. The annual compensation of each
Participant, as defined above by the Employer, taken into account in determining
allocations for any Plan Year beginning after December 31, 2001 shall not exceed
$200,000, as adjusted for cost-of-living increases in accordance with Section
401(a)(1 7)(B) of the Code. For any short Plan Year, the Compensation limit shall be
an amount equal to the Compensation limit for the calendar year in which the Plan
Year begins multiplied by a ratio obtained by dividing the number of full months in
the short Plan Year by twelve (12). The limitation on the maximum amount of
Compensation that may be taken into account under the Plan shall not apply to any
Participant eligible for a higher limit on annual compensation under the transition rule
described in Section 1.401(a)(17)-l(d)(4)(ii) of the Treasury Regulations.
1.8 "Effective Date" means December 1, 1993.
1.9 "Eligible Class of Employees" means the eligible class of employees as provided
herein and in the applicable governing board policies and regulations promulgated
thereunder by the Employer.
1.10 "Eligible Employee" means all of those Employees of the Employer whose
Participation in this Plan are not prohibited or restricted by the provisions of a
collective bargaining agreement or another plan or retirement system maintained by
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the Employer. Employees who are exempt from coverage under Social
Security by federal law or regulation shall not be Eligible Employees.
1.11 "Employee" means an employee of the Employer.
1.12 "Employee Contribution Account" means the account by that name established
pursuant to Section 3.2 hereof.
1.13 "Employer" means the City of Seal Beach that has adopted this Plan.
1.14 "Employer Contribution Account" means the account by that name established
pursuant to Section 3.1 hereof.
1.15 "Inactive Participant" means a Participant who is no longer eligible to participate
because he is no longer in a class of Employees eligible to participate in this Plan but
is still employed by the Employer.
1.16 "Ineligible Employee" means all of those Employees of the Employer whose
participation in this Plan is prohibited or restricted by the provisions of a collective
bargaining agreement, another plan or retirement system maintained by the Employer,
or exempt from coverage under Social Security by federal law or regulation.
1.17 "Investment Manager" means the entity appointed by the Employer as the
investment manager under the Plan.
1.18 "Limitation Year" means the limitation year under Section 3.5 hereof and shall
mean the Plan Year.
1.19 "Normal Retirement Age" means sixty-two (62) years of age.
1.20 "Normal Retirement Date" means the first day of the month coincident with or next
following the date on which the Participant attains Normal Retirement Age.
1.21 "Participant" means a Participant under Article II hereof.
1.22 "Participant Aggregate Accounts" means the accounts by that name established
pursuant to Article III hereof.
1.23 "Participant Contributions" means contributions made on behalf of the Participant
by the Employer as Pick Up Contributions.
1.24 "Participant Contribution Account" means the value of the Participant's interest in
this Plan that is attributable to Pick Up Contributions and/or Participant after tax
contributions.
1.25 "PERS" means the California Public Employees' Retirement System.
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1.26 "Pick Up Contributions" means Participant contributions made by the
Employer on behalf of the Participant pursuant to Section 414(h) of the Internal
Revenue Code. Pick Up Contributions shall not under any circumstances be paid to
the Participant or be directed by the Participant for any purpose except as Pick Up
Contributions to this Plan. The Employer may make Pick Up Contributions through a
reduction in salary, an offset against future salary increases, or a combination of the
two.
1.27 "Plan" means the City of Seal Beach PARS Alternate Retirement System.
1.28 "Plan Administrator" means the individual or position designated by the Employer
to act on behalf of the Employer in matters relating to this Plan. If no designation is
made, the Employer shall be the Plan Administrator. If a Plan Administrator has been
appointed, the word "Employer" as used in this Plan shall mean Plan Administrator
unless the context indicates a different meaning is intended.
1.29 "Plan Year" means the consecutive twelve month period beginning on January I and
ending on December 31.
1.30 "Public Agency" means an employer authorized under California Government Code
Article 1.5, Sections 53215 through 53224 to establish a pension trust.
1.31 "Regulations" means the regulations adopted or proposed by the Department of
Treasury from time to time pursuant to the Code.
1.32 "Retirement System" means any plan that meets the requirements for a
retirement system under Section 3121(b)(7)(F) of the Code and the final
regulations thereunder.
1.33 "Social Security" means the Social Security program as set forth in Title 42 of the
United States Code, Section 301 et se q.
1.34 "STRS" means the California State Teachers' Retirement System.
1.35 "Trust" means the trust established as part of the Public Agency Retirement Trust to
hold the assets of the Plan.
1.36 "Trustee" means the trustee of the Trust.
1.37 "Valuation Date" means the last day of the Plan Year or such other day on which
the assets of the Trust are valued and the value of each Participant's Aggregate
Account is determined.
1.38 "Vested" means the nonforfeitable portion of any Account maintained on behalf of a
Participant.
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ARTICLE II
ELIGIBILITY REQUIREMENTS FOR PARTICIPATION
2.1 Time of Participation
An Eligible Employee shall participate in this Plan on each day during which the Employee
is not accruing a benefit under Social Security or another Retirement System provided and
maintained by the Employer.
2.2 Termination of Participation
A Participant shall cease to be a Participant on the date on which the Participant begins to
participate in another Retirement System or the date of his or her termination of employment
as determined by the Employer.
2.3 Effect of Transfer to Ineligible Employment
If a Participant is no longer an Eligible Employee and becomes an Ineligible Employee, such
Employee will participate immediately upon returning to the Eligible Class of Employees.
Such participation shall commence as of the first day of such eligible employment.
2.4 In Service Distributions
A Participant who is no longer eligible to participate because he is no longer in the class of
Eligible Employees, but who has not terminated employment with the Employer, shall
become an Inactive Participant and shall remain such for twenty-four (24) months after
which his interest in the Plan will be distributed to him.
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ARTICLE III
CONTRIBUTIONS
3.1 Amount of Employer Contributions
There is hereby created and established and shall be maintained by the Plan Administrator
the Employer Contribution Account. For each day that an Employee remains a Participant
under this Plan, the Employer shall make a contribution of one and three-tenths percent
(1.3%) of Compensation. Such contribution shall be made no later than the close of the Plan
Year. This amount shall be credited to the Employer Contribution Account. Employer
Contributions will be allocated to each Participant in the ratio that such Participant's
compensation bears to the compensation of all Participants.
3.2 Amount of Employee Contributions
There is hereby created and established and shall be maintained by the Plan Administrator
the Employee Contribution Account. For each day that an Employee remains a Participant
under this Plan, the Employee shall make a contribution of six and two-tenths percent (6.2%)
of Compensation. Prior to March 5, 1997, such contribution shall be considered after-tax
contributions and shall be credited to the Employee Contribution Account. Effective March
5, 1997 and thereafter, such contributions shall be considered pre-tax contributions and shall
be credited to the Employee Contribution Account. In accordance with Section 414(h) of the
Code and Sections 1.23 and 1.26 of this Plan, the pre-tax contributions required under this
Section 3.2 shall be Pick Up Contributions.
3.3 Administrative Expenses
In accordance with Section 53217 of the Act the Employer may make contributions to the
Trust sufficient to defray all or part of the expenses of administering the Plan or may pay
such expenses directly.
3.4 Allocation of Administrative Expenses
If the Employer chooses not to pay the expenses of administering this Plan, such expenses
shall be charged ratably against the Participants'Aggregate Accounts.
3.5 Limits on Annual Additions
Annual additions credited to a Participant's Account during a limitation year shall not exceed
the lesser of$40,000 (adjusted as permitted by Section 415(d) of the Code and Regulations
issued thereunder) or 100 percent of Section 415 Compensation (provided that such 100
percent limitation shall not apply to any contributions for medical benefits after separation
from service, within the meaning of Section 401(h) or Section 419A(0(2) of the Code). This
Section 3.5 shall be construed and interpreted in accordance with the provisions of Article
IX.
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3.6 Vesting
A Participant will be fully Vested in his Aggregate Account at all times. If the Plan's vesting
schedule is amended or the Plan is amended in any way that directly or indirectly affects the
computation of a Participant's nonforfeitable percentage, or if the Plan is deemed amended
by an automatic change to or from a top-heavy vesting schedule, each Participant with at
least three years of service with the Employer may elect within a reasonable period of time
after the adoption of the amendment or change to have his nonforfeitable percentage
computed under the Plan without regard to the amendment or change.
3.7 Investment in Accordance With Act
All contributions, interest earned, and any assets of the Plan shall at all times be invested and
managed in accordance with the requirements of the Act.
3.8 Reversions
The Employer shall have the right to a reversion of assets from this Plan if(1) a contribution
is conditioned upon the initial qualification of the Plan, a timely determination letter request
is filed, and the Plan receives an adverse determination, or (2) the reversion is due to a good
faith mistake of fact, or (3) the contribution is conditioned on its deductibility under Section
404 of the Code. Notwithstanding the foregoing, (i) any contribution made by the Employer
because of a mistake of fact must be returned to the Employer within one year of the
contribution; (ii) in the event the deduction of a contribution made by the Employer is
disallowed under Section 404 of the Code, such contribution (to the extent disallowed) must
be returned to the Employer within one year of the disallowance of the deduction; and (iii) in
the event that the Commissioner of Internal Revenue determines that the Plan is not initially
qualified under the Internal Revenue Code, any contribution made incident to that initial
qualification by the Employer must be returned to the Employer within one year after the
date the initial qualification is denied, but only if the application for the qualification is made
by the time prescribed by law for filing the Employer's return for the taxable year in which
the Plan is adopted, or such later date as the Secretary of the Treasury may prescribe.
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ARTICLE IV
FUNDING AND VALUATION
4.1 Funding
In accordance with Section 53216 of the Act, the assets of the Plan shall be held in a trust or
invested in an insurance contract which may or may not be held in a trust. Subject to Sections
53216.1, 53216.5 and 53216.6 of the Act for the purpose of funding this Plan, the Employer
shall provide the Trustee or Investment Manager with written direction on how to invest the
assets of the Plan. Notwithstanding anything to the contrary contained in the Trust
agreement, in-kind contributions shall not be permissible under the Plan.
4.2 Valuation
The value of a Participant's Employer Contribution Account and Employee Contribution
Account shall be determined annually on a date hereafter referred to as a Valuation Date. As
of each Valuation Date there shall be determined the amount of the investment gain or loss to
be credited to the total of all assets held for Employer Contribution Accounts and Employee
Contribution Accounts during the period since the preceding Valuation Date. The total
adjustment shall be allocated among all of the individual Participant and Inactive Participant
Accounts as of the current Valuation Date. The assets of the Trust shall be valued annually at
fair market value. On the Valuation Date, the earnings and losses of the Trust will be
allocated to each Participant and Inactive Participant.
4.3 Type and Nature of Plan and Trust
Neither the faith and credit nor the taxing power of the Employer, the State of California or
any other political subdivision thereof other than the Employer is pledged to the distribution
of benefits hereunder. Except for contributions and other amounts hereunder, no other
amounts are pledged to the distribution of benefits hereunder. Distributions of benefits are
neither general nor special obligations of the Employer, but are payable solely from
contributions, as more fully described herein. No Employee or Beneficiary may compel the
exercise of the taxing power by the Employer. Distributions of benefits are not a debt of the
Employer, the State of California or any of its political subdivisions within the meaning of
any constitutional or statutory limitation or restriction. Distributions are not a legal or
equitable pledge, charge, lien or encumbrance, upon any of the Employer's property, or upon
any of its income, receipts or revenues, except amounts in the accounts which are, under the
terms of this Plan and the Act, set aside for distributions of benefits. Neither the Participants
of the legislative body of the Employer nor its officers, employees, agents or volunteers are
liable hereunder. Benefits under the Plan may not be assigned or alienated except to the
extent allowable under Sections 401(a)(13) and 414(p) of the Code.
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ARTICLE V
VESTING
5.1 Vesting in Employer Contribution Account
Each Participant shall be one hundred percent (100%) Vested in his Employer Contribution
Account at all times.
5.2 Vesting in Employee Contribution Account
Each Participant shall be one hundred percent (100%) Vested in his Employee Contribution
Account at all times.
5.3 Full or Partial Termination
Notwithstanding the vesting schedule in 5.1 and 5.2, upon the complete discontinuance of
Employer contributions to the Plan or upon any full or partial termination of the Plan, all
amounts credited to the Account of any affected Participant shall become one hundred
percent (100%) Vested and shall not thereafter be subject to forfeiture for any reason.
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ARTICLE VI
DISTRIBUTION OF BENEFITS
6.1 Incidental Death Benefits
(a) Distributions from the Plan shall be made in accordance with Section
401(a)(9) of the Code, including the incidental death benefits under Section 401(a)(9)(G) and
the regulations thereunder. The required beginning date of benefit payments that represent
the entire interest of the Participant shall be as follows:
(b) A Participant shall have the option of commencing distributions by April 1
following age 70%2 or deferring payment until actual retirement. For avoidance of doubt, a
Participant is not required to receive a distribution while an Employee (in 2009 or any other
year).
(c) Time and Manner of Distribution.
(i) Required Beginning Date. The Participant's entire interest will be
distributed to the Participant no later than the Participant's Required Beginning Date.
(ii) Death of Participant Before Distributions Begin. If the Participant
dies before distributions begin, the Participant's entire interest will be distributed no later
than December 31 of the calendar year immediately following the calendar year in which the
Participant died.
(iii) Forms of Distribution. The Participant's interest shall be distributed in
the form of a single sum on or before the Required Beginning Date.
(iv) Required Beginning Date. The April 1 of the calendar year following
the calendar year in which the Participant attains age 70'/2 or, if the Participant opts to defer
payment until retirement, the April 1 of the calendar year following the calendar year in
which the Participant actually retires.
6.2 Amount of Distribution
A Participant who terminates employment for any reason shall be entitled to one hundred
percent (100%) of the value of his Aggregate Account determined as of the most current
Valuation Date.
6.3 Lump Sum Distributions
All distributions shall be made in a lump sum payment in cash constituting the entire value of
the distributee's Aggregate Account.
6.4 Time of Distribution
Unless otherwise specified herein, benefits shall become distributable to a Participant (or the
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Participant's Beneficiary in any case of the Participant's death) upon any termination of the
Participant's employment by reason of resignation, discharge, retirement, disability, or death.
This Plan does not provide for mandatory distributions of any amount. Therefore, no
distribution is made (regardless of the amount of the distribution) without the consent of the
Participant (or the Participant's Beneficiary in any case of the Participant's death).
6.5 Participant's Rights Not Subject To Execution
The right of a Participant to a benefit under this Plan is not subject to execution or any other
process whatsoever, except to the extent permitted by Section 704.110 of the Code of Civil
Procedure of the State of California and is unassignable.
6.6 Unclaimed Benefits
Each Participant and Beneficiary of a deceased Participant shall file with the Plan
Administrator from time to time in writing, his home address and each change of home
address. Any communication shall be addressed to the Participant or the Beneficiary at his
last home address filed with the Plan Administrator, or if no such address was filed, then at
his last home address as shown on the Employer's records, shall be binding on the
Participant or Beneficiary for all purposes of the Plan. The Plan Administrator shall not be
obligated to search for or ascertain the whereabouts of any Participant or Beneficiary, and
the Participant's Accrued Benefit shall be subject to the abandoned property law of the
applicable jurisdiction.
6.7 Direct Rollovers
(a) Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Plan, a distributee may elect, at the time and
in the manner prescribed by the Plan Administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by the distributee in
a direct rollover. A distributee includes an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or former
Employee's spouse or former spouse who is the alternate payee under a qualified domestic
relations order, as defined in Section 414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(b) Effective for distributions after December 31, 2006, a Beneficiary who is not
the spouse of the Participant may elect a direct trustee to trustee transfer that qualifies as an
eligible rollover distribution under this Section 6.7. Such transfer shall be made to an
individual retirement plan described in Section 408(a) of the Code or an individual retirement
account that is established for the purpose of receiving the distribution on behalf of such
Beneficiary. Such individual retirement account shall be deemed an inherited IRA pursuant
to the provisions of Section 402(c)(11) of the Code. Also, in this case, the determination of
any required minimum distribution under Code Section 401(a)(9) that is ineligible for
rollover shall be made in accordance with Notice 2007-7, Q&A 17 and 18, 2007-5 I.R.B.
395.
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(c) Definitions
(i) Eligible Rollover Distribution
An eligible rollover distribution is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution does not include: (i) any
distribution that is one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's designated
Beneficiary, or for a specified period of ten (10) years or more; (ii) any distribution to the
extent such distribution is required under Section 401(a)(9) of the Code; and (iii) any
hardship distribution. A portion of a distribution shall not fail to be an eligible rollover
distribution merely because the portion consists of after-tax employee contributions which
are not includible in gross income. However, such portion may be transferred only to (A) an
individual retirement account or annuity described in Section 408(a) or (b) of the Code (or,
on or after January 1, 2008, to a Roth IRA described in Section 408A of the Code) or a
qualified defined contribution plan described in Section 401(a) of the Code; or (B) on or
after January 1, 2007, to a qualified defined benefit plan described in Section 401(a) of the
Code or to an annuity contract described in Section 403(b) of the Code, that agrees to
separately account for amounts so transferred (and earnings thereon), including separately
accounting for the portion of the distribution that is includible in gross income and the
portion of the distribution that is not so includible.
(ii) Eligible Retirement Plan
An eligible retirement plan is an individual retirement account described in Section 408(a) of
the Code, an individual retirement annuity described in Section 408(b) of the Code, a
qualified plan described in Section 401(a) of the Code that accepts the distributee's eligible
rollover distribution, an annuity contract described in Section 403(b) of the Code, a Roth
IRA described in Code Section 408A (but only if the distributee satisfies the requirements of
Code Section 408A(c)(3)(B)), and an eligible plan under Section 457(b) of the Code which
is maintained by a state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state and which agrees to separately account for amounts
transferred into such plan from this Plan. The definition of eligible retirement plan shall also
apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who
is the alternate payee under a qualified domestic relation order, as defined in Section 414(p)
of the Code. With respect to eligible rollover distributions made on or after January 1, 2008,
an eligible retirement plan shall also include a Roth IRA as described in Section 408A of the
Code, provided that the distributee is not restricted from making such a rollover from this
Plan to a Roth IRA pursuant to Section 408A(c) of the Code.
(iii) Direct Rollover
A direct rollover is a payment by the Plan to the eligible retirement plan specified by the
distributee.
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6.8 Military Service
Notwithstanding any provision of this Plan to the contrary, contributions, benefits and
service credit with respect to qualified military service will be provided in accordance with
Section 414(u) of the Code. In addition, the survivors of any Participant who dies on or after
January 1, 2007 while performing qualified military service, are entitled to any additional
benefits (other than benefit accruals relating to the period of qualified military service)
provided under the Plan had the Participant resumed and then terminated employment on
account of death. A Participant receiving a "differential wage payment," as defined in Code
Section 3401(h)(2) shall be treated as an Employee of the Employer, and the differential
wage payment shall be treated as Compensation.
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ARTICLE VII
DEATH BENEFITS
7.1 Designation of Beneficiary
Each Participant and Inactive Participant shall have the right to designate a Beneficiary to
receive the death benefits that are payable from this Plan. Such designation must be
evidenced by a written instrument filed with the Employer on a form prescribed by the
Employer and signed by the Participant.
7.2 Married Participant
The Beneficiary for a married Participant shall at all times be the Participant's spouse and
may not be changed to someone other than such spouse unless the consent of such spouse is
provided upon a written form witnessed by a duly authorized Plan representative or a notary
public and acceptable to the Employer. If no such designation is on file with the Employer
at the time of the death of the Participant, or if for any reason at the sole discretion of the
Employer such designation is defective, then the spouse of such Participant shall be
conclusively deemed to be the Beneficiary designated to receive such benefit.
7.3 Spouse's Signature
The signature of the Participant's spouse shall be required on a designation of beneficiary
form if the spouse is not the Beneficiary, unless the Participant declares in writing that one
of the following conditions exists:
(a) The Participant is not married;
(b) The Participant does not know and has taken all reasonable steps to determine
the whereabouts of the spouse;
(c) The spouse is incapable of executing the acknowledgement because of an
incapacitating mental or physical condition.
7.4 Default Beneficiary
In the event the Participant dies and is not survived by a spouse, the Aggregate Account shall
pass by the laws of intestacy.
7.5 Domestic Partners
Effective as of January 1, 2005, for purposes of this Article VII only: (1) all references to
"marriage" shall also include "registered domestic partnerships," (2) individuals in a
"registered domestic partnership" shall be considered "married," and (3) all references to a
"spouse" shall also include a "registered domestic partner." A "registered domestic partner"
and a "registered domestic partnership" refer to persons and partnerships satisfying the
15
N B t:740870.2
requirements of the California Family Code and officially registered as of the date of death
with the Secretary of State as such in accordance with Section 298.5 of the California Family
Code.
16
NB 1:790870.2
ARTICLE VIII
ADMINISTRATION AND AMENDMENT OF PLAN
8.1 Designation of Plan Administrator
The Employer is the Plan Administrator under this Plan unless an individual employed by, or
a position within the Employer, has been appointed by the Employer as Plan Administrator.
In addition to a Plan Administrator the Employer may designate a delegatee to perform those
activities relating to the Plan as specified in the written appointment of such delegatee. The
term "Employer" as used in this Article VIII shall mean the Plan Administrator or delegatee
where responsibility for administration of the Plan has been given to such parties.
8.2 Rules and Regulations
The Employer shall supervise and control the operation of this Plan in accordance with its
terms and may make rules and regulations for the administration of this Plan that are not
inconsistent with the terms and provisions hereof. The Employer shall determine any
questions arising in connection with the interpretation, application or administration of the
Plan (including any question of fact relating to age, employment, Compensation or eligibility
of Employees) and its decisions or actions in respect thereof shall be conclusive and binding
upon any and all persons and parties. The Employer's interpretations, determinations and
actions taken under the Plan shall in all cases result in like treatment for Employees who are
similarly situated.
8.3 Amendment and Termination
The Employer shall have the right to amend, modify or terminate this Plan at any time. In the
event of a termination or the complete discontinuance of this Plan, the entire interest of each
Participant affected thereby shall immediately become 100%Vested. The Employer shall not
be liable for the payment of any benefits under this Plan and all benefits hereunder shall be
payable solely from the assets of the Trust.
17
N$1:790870.2
ARTICLE IX
ANNUAL ADDITION LIMITS
9.1 Construction
Section 3.5 of the Plan shall be construed in accordance with this Article IX. Unless the
context clearly requires otherwise, words and phrases used in this Article IX shall have the
same meanings that are assigned to them under the Plan.
9.2 Definitions
As used in this Article IX, the following terms shall have the meanings specified below.
(a) "Annual Additions" shall mean the sum credited to a Participant's Accounts
for any Plan Year of (i) Employer contributions, (ii) Employee contributions, (iii)
forfeitures, and (iv) amounts credited after March 31, 1984 to an individual medical
account, as defined in Section 415(1)(2) of the Code which is part of a pension and annuity
maintained by the Employer.
(b) "Defined Benefit Plan" means a plan described in Section 4140) and
414(k)(2) of the Code.
(c) "Defined Contribution Plan" means a plan described in Section 414(1) and
414(k)(2) of the Code.
(d) "Section 415 Compensation" shall mean a Participant's wages within the
meaning of Code Section 3401(a) and all other payments of compensation to the Participant
by the Employer (in the course of the Employer's business) for which the Employer is
required to provide the Participant a written statement under Code Sections 6041(d),
6051(a)(3) and 6052. Section 415 Compensation shall be determined without regard to any
rules under Code Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed. Compensation for any
limitation year is the compensation actually paid or includible in gross income during such
year. Compensation paid or made available during a limitation year shall include amounts
that would otherwise be included in compensation but for an election under Code Section
125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k) or 457(b). "Section 415 Compensation"
does not include any amounts paid following a severance from employment, except amounts
paid or includible in gross income by the later of 2 1/2 months after a severance from
employment or the end of the Plan Year that includes the severance from employment shall
be included if, (i) absent the severance from employment, such compensation would have
been paid to the Participant while the Participant continued in employment with the
Employer, and such payments represent regular compensation for services during the
Participant's regular working hours (or compensation for services outside the Participant's
regular working hours, such as overtime or shift differential), commissions, bonuses or
similar compensation, (ii) the payment is for unused accrued bona fide sick, vacation or
18
N B 1:664952.7
other leave that the Participant would have been able to use if employment had continued, or
(iii) the payment is received by the Participant pursuant to a nonqualified unfunded deferred
compensation plan and would have been paid at the same time if employment had
continued, but only to the extent includible in gross income. Any payments not described
above shall not be considered Section 415 Compensation if paid after severance from
employment, even if they are paid by the later of 2 1/2 months after the date of severance
from employment or the end of the limitation year that includes the date of severance from
employment.
9.3 Annual Addition Limitations
(a) The compensation limitation of Section 3.5 of the Plan shall not apply to any
contribution for medical benefits (within the meaning of Code Section 419A(f)(2)) after
separation from service which is treated as an Annual Addition.
(b) If any Employer contributes amounts, on behalf of Participants covered by
the Plan, to other Defined Contribution Plans, the limitation on Annual Additions provided
in Article III of the Plan shall be applied to Annual Additions in the aggregate to the Plan
and such other plans. Reduction of Annual Additions, where required, shall be
accomplished by reducing contributions under such other plans pursuant to the directions of
the fiduciary for administration of such other plans or under priorities, if any, established by
the terms of such other plans, and then, if necessary, by reducing contributions under the
Plan.
(c) In the event the limitations of Section 3.5 of the Plan or Sections 9.3(a) or
(b) of this Article IX are exceeded such excess may be corrected as permitted by applicable
IRS guidance(such as under Revenue Procedure 2008-50 or its successors).
19
NS 1:664452.7
ADOPTION OF THE AMENDED AND RESTATED
CITY OF SEAL BEACH
PARS ALTERNATE RETIREMENT SYSTEM
The Amended and Restated City of Seal Beach PARS Alternate Retirement System is
hereby adopted.
BY:
TITLE: City Manager
DATE: _a ..l+._._ .
.....................................................................................................................................................................................
Volume Submitter Sponsor: Public Agency Retirement Services
P.O.Box 11119
Newport Beach,CA 92658-5019
(800)540-6369
Volume Submitter Plan Letter Serial No: J593760a
20
N B 1:664952.7
l (' • •
THE CITY OF SEAL BEACH
PUBLIC AGENCY RETIREMENT
SYSTEM
ALTERNATE RETIREMENT SYSTEM
(PARS -ARS)
AMENDED AND RESTATED
EFFECTIVE JANUARY 1,1997
Defined Contribution Plan
1
• •
INTRODUCTION
The City of Seal Beach (the "Employer ") has adopted this tax qualified
governmental profit sharing plan for the benefit of its eligible employees. It is intended
that this plan and the trust established to hold the assets of the plan shall be qualified
under Section 401(a) and tax - exempt under Section 501(a) of the Internal Revenue Code
of 1986, together with any amendments thereto ( "Code "). It is further intended that the
plan shall meet all of the requirements as a government alternative retirement system
under Code Section 3121(b)(7)(F). It is also intended that this plan and the trust
established hereunder shall meet the requirements of a pension trust under California
Government Code sections 53215 — 53224. At any time prior to the satisfaction of all
liabilities with respect to participants and their beneficiaries under the trust created
pursuant to this plan, the trust assets shall not be used for, or diverted to, purposes other
than the exclusive benefit of participants or their beneficiaries, as prescribed in Section
401(a)(2) of the Code.
It is intended that the plan satisfy the requirements of the applicable provisions of
the Uruguay Round Agreements Act, the Small Business Job Protection Act, the
Taxpayer Relief Act of 1997 and the Uniformed Service Employment and
Reemployment Rights Act of 1994 (commonly referred to as the "GUST" amendments)
and that the provisions of this restated Plan reflecting the GUST amendments are hereby
made effective as of the dates required by the legislation referred to in this sentence.
2
• •
TABLE OF CONTENTS
ARTICLE PAGE
I DEFINITIONS 4
II ELIGIBILITY REQUIREMENTS FOR
PARTICIPATION 7
III CONTRIBUTIONS . g
IV FUNDING AND VALUATIONS 10
V VESTING 11
VI DISTRIBUTION OF BENEFITS 12
VII DEATH BENEFITS 15
VIII ADMINISTRATION AND AMENDMENT
OF PLAN 16
APPENDIX 17
3
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ARTICLE I
DEFINITIONS
1.1 "Act" means California Government Code sections 53215 — 53224.
1.2 "Aggregate Account" means, with respect to each Participant, the value of all
accounts maintained on behalf of the Participant, whether attributable to
Employer or Employee contributions.
1.3 "Amended Effective Date" means January 1, 1997.
1.4 "Beneficiary" means the person, trust or other entity to whom a share of a
deceased Participant's Aggregate Account is payable.
1.5 "Code" means the Internal Revenue Code of 1986 as amended from time to time.
1.6 "Compensation" means all compensation for that portion of the Plan Year during
which the Employee was a Participant, paid in cash by the Employer to the
Participant for personal services. Further, the Employer as defined in section 1.12
hereof, defines compensation as Base Salary. Compensation in excess of
$150,000 shall be disregarded. Such amount shall be adjusted for increases in the
cost of living in accordance with Code section 401 (a) (17) (B) except that the
dollar increase in effect on January 1 of any calendar year shall be effective for
the Plan Year beginning with or within such calendar year. For any short Plan
Year, the Compensation limit shall be an amount equal to the Compensation limit
for the calendar year in which the Plan Year begins multiplied by a ratio obtained
by dividing the number of full months in the short Plan Year by twelve (12). The
limitation on the maximum amount of Compensation that may be taken into
account under the Plan, as set forth in this definition of Compensation, shall apply
for Plan Years beginning after December 31, 1995 or 90 days after the opening of
the first legislature session on or after January 1, 1996.
1.7 "Effective Date" means December 1, 1993.
1.8 "Eligible Class of Employees" means the eligible class of employees as provided
herein and in the applicable governing board policies and regulations promulgated
thereunder by the Employer.
1.9 "Eligible Employee" means all of those Employees of the Employer whose
Participation in this Plan are not prohibited or restricted by the provisions of a
collective bargaining agreement or another plan or retirement system maintained
by the Employer. Employees who are exempt from coverage under Social
Security by federal law or regulation shall not be Eligible Employees.
4
• •
1.10 "Employee" means an employee of the Employer.
1.11 "Employee Contribution Account" means the account by that name established
pursuant to section 3.2 hereof.
1.12 "Employer" means the City of Seal Beach that has adopted this Plan.
1.13 "Employer Contribution Account" means the account by that name established
pursuant to section 3.1 hereof.
1.14 "Inactive Participant" means a Participant who is no longer eligible to
participate because he is no longer in a class of Employees eligible to participate
in this Plan but is still employed by the Employer.
1.15 "Ineligible Employee" means all of those Employees of the Employer whose
Participation in this Plan is prohibited or restricted by the provisions of a
collective bargaining agreement, another plan or retirement system maintained by
the Employer, or exempt from coverage under Social Security by federal law or
regulation.
1.16 "Investment Manager" means the entity appointed by the Employer as the
investment manager under the Plan.
1.17 "Limitation Year" means the limitation year under section 3.5 hereof and shall
mean the Plan Year.
1.18 "Normal Retirement Age" means sixty (60) years of age.
1.19 "Normal Retirement Date" means the first day of the month coincident with or
next following the date on which the Participant attains Normal Retirement Age.
1.20 "Participant" means a Participant under Article H hereof.
1.21 "Participant Aggregate Accounts" means the accounts by that name established
pursuant to Article III hereof.
1.22 "Participant Contributions" means contributions made on behalf of the
Participant by the Employer as Pick Up Contributions.
1.23 "Participant Contribution Account" means the value of the Participant's
interest in this Plan that is attributable to Pick Up Contributions and/or Participant
After Tax Contributions.
1.24 "PERS" means the California Public Employees' Retirement System.
1.25 "Pick Up Contributions," means Participant contributions made by the
Employer on behalf of the Participant pursuant to section 414 (h) of the Internal
Revenue Code. Pick Up Contributions shall not under any circumstances be paid
to the Participant or be directed by the Participant for any purpose except as Pick
5
• •
Up Contributions to this Plan. The Employer may make Pick Up Contributions
through a reduction in salary, an offset against future salary increases, or a
combination of the two.
1.26 "Plan" means the City of Seal Beach PARS Alternate Retirement System.
1.27 "Plan Administrator" means the individual or position designated by the
Employer to act on behalf of the Employer in matters relating to this Plan. If no
designation is made, the Employer shall be the Plan Administrator. If a Plan
Administrator has been appointed, the word "Employer" as used in this Plan shall
mean Plan Administrator unless the context indicates a different meaning is
intended.
1.28 "Plan Year" means the consecutive twelve month period beginning on January 1
and ending on December 31.
1.29 "Public Agency" means an employer authorized under California Government
Code Article 1.5, sections 53215 through 53224 to establish a pension trust.
1.30 "Regulations" means the regulations adopted or proposed by the Department of
Treasury from time to time pursuant to the Code.
1.31 "Retirement System" means any plan that meets the requirements for a
retirement system under Section 3121 (b) (7) (F) of the Code and the final
regulations thereunder.
1.32 "Social Security" means the Social Security program as set forth in Title 42 of
the United States Code, section 301 et seq.
1.33 "STRS" means the California State Teachers' Retirement System.
1.34 "Trust" means the trust established as part of the Public Agency Retirement
Trust to hold the assets of the Plan.
1.35 "Trustee" means the trustee of the Trust.
1.36 "Valuation Date" means the last day of the Plan Year or such other day on which
the assets of the Trust are valued and the value of each Participant's Aggregate
account is determined.
1.37 "Vested" means the nonforfeitable portion of any account maintained on behalf
of a Participant.
6
• •
ARTICLE II
ELIGIBILITY REQUIREMENTS FOR PARTICIPATION
2.1 Time of Participation
An Eligible Employee shall participate in this Plan on each day during which the
Employee is not accruing a benefit under Social Security or another Retirement System
provided and maintained by the Employer.
2.2 Termination of Participation
A Participant shall cease to be a Participant on the date on which the Participant begins to
participate in another Retirement System or the date of his termination of employment as
determined by the Employer.
2.3 Effect of Transfer to Ineligible Employment
If a Participant is no longer an Eligible Employee and becomes an Ineligible Employee,
such Employee will participate immediately upon returning to the Eligible Class of
Employees. Such participation shall commence as of the first day of such eligible
employment.
2.4 In Service Distributions
A Participant who is no longer eligible to participate because he is no longer in the class
of eligible employees, but who has not terminated employment with the Employer, shall
become an Inactive Participant and shall remain such for twenty -four (24) months after
which his interest in the Plan will be distributed to him.
7
. •
ARTICLE III
CONTRIBUTIONS
3.1 Amount of Employer Contributions
There is hereby created and established and shall be maintained by the Plan
Administrator the Employer Contribution Account. For each day that an Employee
remains a Participant under this 'Plan, the Employer shall make a contribution of one and
three tenths percent (1.3 %) of Compensation. Such contribution shall be made no later
than the close of the Plan Year. This amount shall be credited to the Employer
Contribution Account. Employer Contributions will be allocated to each Participant in
the ratio that such Participant's compensation bears to the compensation of all
Participants.
3.2 Amount of Employee Contribution
There is hereby created and established and shall be maintained by the Plan
Administrator the Employee Contribution Account. Prior to March 5, 1997, for each day
that an Employee remains a Participant under this Plan, the Employee shall make a
contribution of six and two tenths percent (6.2 %) of Compensation. Such contributions
shall be after -tax contributions and shall be credited to the Employee Contribution
Account. After March 5, 1997, for each day that an Employee remains a Participant
under this Plan, the Employee shall make a contribution of six and two tenths percent
(6.2 %) of Compensation. Such contributions shall be pre -tax contributions and shall be
credited to the Employee Contribution Account.
3.3 Administrative Expenses
In accordance with section 53217 of the Act the Employer may make contributions to the
Trust sufficient to defray all or part of the expenses of administering the Plan or may pay
such expenses directly.
3.4 Allocation of Administrative Expenses
If the Employer chooses not to pay the expenses of administering this Plan, such
expenses shall be charged ratably against the Participants' Aggregate Accounts.
3.5 Limits on Annual Additions
Notwithstanding anything else to the contrary, annual additions credited to a Participant's
Account during a limitation year (i.e. Plan Year) shall not exceed the lesser of $30,000
(adjusted as permitted by Section 415(d)(1) of the Code and Regulations issued
thereunder) or the 25 percent of the Participant's Compensation. This Section 3.5 shall
be construed and interpreted in accordance with the provisions of Appendix A attached
hereto.
8
• •
3.6 Vesting
A Participant will be fully vested in his Aggregate Account at all times. If the Plan's
vesting schedule is amended or the Plan is amended in any way that directly or indirectly
affects the computation of a Participant's nonforfeitable percentage, or if the Plan is
deemed amended by an automatic change to or from a top -heavy vesting schedule, each
Participant with at least three years of service with the Employer may elect within a
reasonable period of time after the adoption of the amendment or change to have his
nonforfeitable percentage computed under the Plan without regard to the amendment or
change.
3.7 Investment in Accordance With Act
All contributions, interest eamed, and any assets of the Plan shall at all times be invested
and managed in accordance with the requirements of the Act.
3.8 Reversions
The Employer shall have the right to a reversion of assets from this Plan if (1) a
contribution is conditioned upon the initial qualification of Plan, a timely determination
letter request is filed, and the Plan receives an adverse determination, or (2) the reversion
is due to a good faith mistake of fact, or (3) the contribution is conditioned on its
deductibility under section of the Code.
9
• •
ARTICLE IV
FUNDING AND VALUATION
4.1 Funding
In accordance with section 53216 of the Act, the assets of the Plan shall be held in a trust
or invested in an insurance contract which may or may not be held in a trust. Subject to
sections 53216.1, 53216.5 and 53216.6 of the Act for the purpose of funding this Plan,
the Employer shall provide the Trustee or investment manager with written direction on
how to invest the assets of the Plan.
4.2 Valuation
The value of a Participant's Employer Contribution Account and Employee Contribution
Account shall be determined annually on a date hereafter referred to as a Valuation Date.
As of each Valuation Date there shall be determined the amount of the investment gain or
loss to be credited to the total of all assets held for Employer Contribution Accounts and
Employee Contribution Accounts during the period since the preceding Valuation Date.
The total adjustment shall be allocated among all of the individual Participants and
Inactive Participant Accounts as of the Current Valuation Date. The assets of the Trust
shall be valued annually at fair market value. On the Valuation Date, the earnings and
losses of the Trust will be allocated to each Participant and Inactive Participant.
4.3 Type and Nature of Plan and Trust
Neither the faith and credit nor the taxing power of the Employer, the State of California
or any other political subdivision thereof other than the Employer is pledged to the
distribution of benefits hereunder. Except for contributions and other amounts hereunder,
no other amounts are pledged to the distribution of benefits hereunder. Distributions of
benefits are neither general nor special obligations of the Employer, but are payable
solely from contributions, as more fully described herein. No Employee or Beneficiary
may compel the exercise of the taxing power by the Employer. Distributions of benefits
are not a debt of the Employer, the State of California or any of its political subdivisions
within the meaning of any constitutional or statutory limitation or restriction.
Distributions are not a legal or equitable pledge, charge, lien or encumbrance, upon any
of the Employer's property, or upon any of its income, receipts or revenues, except
amounts in the accounts which are, under the terms of this Plan and the Act, set aside for
distributions of benefits. Neither the Participants of the legislative body of the Employer
nor its officers, employees, agents or volunteers are liable hereunder. Benefits under the
Plan may not be assigned or alienated except to the extent allowable under IRC sections
401 (a) (13) and 414 (p).
10
• •
ARTICLE V
VESTING
5.1 Vesting in Employer Contribution Account
Each Participant shall be one hundred percent (100 %) Vested in his Employer
Contribution Account at all times.
5.2 Vesting in Employee Contribution Account
Each Participant shall be one hundred percent (100 %) Vested in his Employee
Contribution Account at all times.
5.3 Full or Partial Termination
Notwithstanding the vesting schedule in 5.1 and 5.2, upon the complete discontinuance of
Employer contributions to the Plan or upon any full or partial termination of the Plan, all
amounts credited to the account of any affected Participant shall become one hundred
percent (100 %) Vested and shall not thereafter be subject to forfeiture for any reason.
11
• .
ARTICLE VI
DISTRIBUTION OF BENEFITS
6.1 Incidental Death Benefits
Distributions from the Plan shall be made in accordance with section 401 (a) (9) of the
IRC, including the incidental death benefits under section 401 (a) (9) (G) and the
regulations thereunder. The required beginning date of benefit payments that represent
the entire interest of the Participant shall be as follows:
Effective January 1, 2001, a Participant who remains an employee shall receive his or her
distribution in a lump sum by the later of April 1 following age 70 1/2 or actual retirement.
6.2 Amount of Distribution
A Participant who terminates employment for any reason shall be entitled to one hundred
percent (100 %) of the value of his Aggregate Account determined as of the most current
Valuation Date.
6.3 Lump Sum Distributions
All distributions shall be made in a lump sum payment in cash constituting the entire
value of the distributee's Aggregate Account.
If the Participant dies before distribution of his Aggregate Account is made, the
Participant's Aggregate Account will be distributed within five years after the
Participant's death.
6.4 Time of Distribution
Unless otherwise specified herein, benefits shall become distributable to a Participant (or
the Participant's Beneficiary in any case of the Participant's death) upon any termination
of the Participant's employment by reason of resignation, discharge, retirement,
disability, or death.
6.5 Participant's Rights Not Subject To Execution
The right of a Participant to a benefit under this Plan is not subject to execution or any
other process whatsoever, except to the extent permitted by section 704.110 of the Code
of Civil Procedure of the State of California and is unassignable.
•
12
• •
6.6 Unclaimed Benefits
Each Participant and Beneficiary of a deceased Participant shall file with the Plan
Administrator from time to time in writing, his or her home address and each change of
home address. Any communication addressed to the Participant or the Beneficiary at his
or her last home address filed with the Plan Administrator, or if no such address was
filed, then at his or her last home address as shown on the Agency's records, shall be
binding on the Participant or Beneficiary for all purposes of the Plan. The Plan
Administrator shall not be obligated to search for or ascertain the whereabouts of any
Participant or Beneficiary, and the Participant's Accrued Benefit shall be subject to the
abandoned property law of the applicable jurisdiction.
6.7 Direct Rollovers
This section applies to all distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise limit a
distributee's election under this Plan, a distributee may elect, at the time and in the
manner prescribed by the Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the distributee in a
direct rollover.
(a) Definitions
(i) Eligible Rollover Distribution
An eligible rollover distribution is any distribution of all or any portion of the balance to
the credit of the distributee including hardship amounts received after December 31,
1998, except that an eligible rollover distribution does not include: any distribution that is
one of a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint lives (or
joint life expectancies) of the distributee and the distributee's designated beneficiary, or
for a specified period of ten (10) years or more; any distribution to the extent such
distribution is required under section 401 (a) (9) of the Internal Revenue Code, any
hardship distribution of elective deferrals, and the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(ii) Eligible Retirement Plan
An eligible retirement plan is a individual retirement account described in section 408 (a)
of the Code, an individual retirement annuity described in section 408 (b) of the Code, or
a qualified trust described in section 401 (a) of the Code that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible rollover distribution to
the surviving spouse, an eligible retirement plan is an individual retirement plan,
individual retirement account, or an individual retirement annuity.
13
•
(iii) Distributee
A distributee includes an Employee or former Employee, the Employee's or former
Employee's surviving spouse, and the Employee's or former Employee's spouse or
former spouse who is the alternate payee under a qualified domestic relations order, as
defined in section 414 (p) of the Code, are distributees with regard to the interest of the
spouse or former spouse.
(iv) Direct Rollover
A direct rollover is a payment by the Plan to the eligible retirement plan specified by the
distributee.
6.7 Military Service
Notwithstanding any provision of this Plan to the contrary, contributions, benefits and
service credit with respect to qualified military service will be provided in accordance
with section 414 (u) of the Code.
14
• •
•
ARTICLE VIII
ADMINISTRATION AND AMENDMENT OF PLAN
8.1 Designation of Plan Administrator
The Employer is the Plan Administrator under this Plan unless an individual employed
by, or a position within the Employer, has been appointed by the Employer as Plan
Administrator. In addition to a Plan Administrator the Employer may designate a
delegatee to perform those activities relating to the Plan as specified in the written
appointment of such delegatee. The term "Employer" as used in this Article shall mean
the Plan Administrator or delegatee where responsibility for administration of the Plan
has been given to such parties.
8.2 Rules and Regulations
The Employer shall supervise and control the operation of this Plan in accordance with its
terms and may make rules and regulations for the administration of this Plan that are not
inconsistent with the terms and provisions hereof. The Employer shall determine any
questions arising in connection with the interpretation, application or administration of
the Plan (including any question of fact relating to age, employment, compensation or
eligibility of Employees) and its decisions or actions in respect thereof shall be
conclusive and binding upon any and all persons and parties. The Employer's
interpretations, determinations and actions taken under the Plan shall in all cases result in
like treatment for Employees who are similarly situated.
8.3 Amendment and Termination.
The Employer shall have the right to amend, modify or terminate this Plan at any time.
In the event of the complete discontinuance of this Plan, the entire interest of each
Participant affected thereby shall immediately become 100% vested. The Employer shall
not be liable for the payment of any benefits under this Plan and all benefits hereunder
shall be payable solely from the assets of the Trust. After all liabilities of this Plan to
Participants and their Beneficiaries have been satisfied, any residual assets of this Plan
shall be used for such purposes as determined by the Employer, including a distribution
of the assets to the general funds of the Employer.
16
•
• •
APPENDIX A
ANNUAL ADDITIONAL LIMITS
Section 3.5 of the Plan shall be construed in accordance with this Appendix A.
Unless the context clearly requires otherwise, words and phrases used in this Appendix A
shall have the same meanings that are assigned to them under the Plan.
A.1 Definitions.
As used in this Appendix A, the following terms shall have the meanings
specified below.
"Annual Additions" shall mean the sum credited to a Participant's Accounts for
any Plan Year of (i) Employer contributions, (ii) Employee contributions, (iii) forfeitures,
and (iv) amounts credited after March 31, 1984 to an individual medical account, as
defined in Section 415(1)(2) of the Code which is part of a pension and annuity
maintained by the Employer.
"Defined Benefit Plan" means a plan described in Section 414(j) and 414(k)(2)
of the Code.
"Defined Contribution Plan" means a plan described in Section 414(i) and
414(k)(2) of the Code.
"Section 415 Compensation" shall mean a Participant's wages within the
meaning of Code Section 3401(a) and all other payments of compensation to the
Participant by the Employer (in the course of the Employer's business) for which the
Employer is required to provide the Participant a written statement under Code Sections
6041(d), 6051(a)(3) and 6052. Section 415 Compensation shall be determined without
regard to any rules under Code Section 3401(a) that limit the remuneration included in
wages based on the nature or location of the employment or the services performed.
Compensation for any limitation year is the compensation actually paid or includible in
gross income during such year. Effective January 1, 1998, "Section 415 Compensation"
shall include elective deferrals as defined in Section 402(g)(3) of the Code and any
amount which is contributed or deferred by the Employer at the election of an Employee
and which is not includible in the gross income of the Employee by reason of Code
Section 125, 132(0(4) or 457.
A.2 Annual Addition Limitations.
(a) The compensation limitation of Section 3.5 of the Plan shall not apply to
any contribution for medical benefits (within the meaning of Section 419A(0(2)) after
separation from service which is treated as an Annual Addition. In the event that Annual
Additions to all the accounts of a Participant would exceed the limitations of Section 3.5
of the Plan, they shall be reduced in the following priority: (i) return of Employee
contributions to the Participant; (ii) reduction of Employer contributions.
(b) If any Employer contributes amounts, on behalf of Participants covered by
the Plan, to other Defined Contribution Plans, the limitation on Annual Additions
provided in Article II of the Plan shall be applied to Annual Additions in the aggregate to
the Plan and such other plans. Reduction of Annual Additions, where required, shall be
accomplished by reducing contributions under such other plans pursuant to the directions
of the fiduciary for administration of such other plans or under priorities, if any,
established by the terms of such other plans, and then, if necessary, by reducing
contributions under the Plan.
17
•
a. • •
(c) In the event the limitations of Section 3.5 of the Plan or subsections (a) or
(b) of this Appendix A are exceeded and the conditions specified in Treasury Regulations
§ 1.415- 6(b)(6) are met, the Employer may elect to (i) allocate the excess amount to other
participants in the Plan for that limitation year, (ii) use the excess amount to reduce
employer contributions for the participant for future limitation years (to the extent the
participant remains covered by the Plan), or (iii) hold the excess amount unallocated for
the limitation year and allocate it to all participants in the following limitation year(s).
18
• 0
ADOPTION OF THE AMENDED AND RESTATED
CITY OF SEAL BEACH
PARS ALTERNATE RETIREMENT SYSTEM
The Amended and Restated City of Seal Beach PARS Alternate Retirement System is
hereby adopted effective January 1, 1997.
BY: ,94.3, ,‘. . ,.
TITLE: , Ct # AC►1 ,ear
DATE: .5 210
Plan Submission to the IRS for a Letter of. Determination
The decision to submit the foregoing Plan to the IRS shall be determined by the Plan
Administrator pursuant to his/her initials below:
)Q Yes, please submit the Plan to the IRS for an individual Letter of Determination.
No, do not submit the Plan to the IRS for a Letter of Determination. Please refund
our check in the amount $500.00.
19
AMENDMENT TO THE
CITY OF SEAL BEACH
PARS ALTERNATE RETIREMENT SYSTEM
The City of Seal Beach PARS Alternate Retirement System as amended and restated as
of January 1, 1997 is hereby amended as follows:
1. Effective January 1, 2002 (except as otherwise provided), the following
Appendix B is added to read as follows:
"APPENDIX B
GOOD FAITH EGTRRA COMPLIANCE
B.1. Adoption and Effective Date of Appendix B.
This Appendix B is adopted to reflect certain provisions of the Economic Growth and
Tax Relief Reconciliation Act of 2001 ( "EGTRRA "). This Appendix B is intended as
good faith compliance with the requirements of EGTRRA and is to be construed in
accordance with EGTRRA and guidance issued thereunder. Except as otherwise
provided, this Appendix B shall be effective as of the first day of the first Plan Year
beginning after December 31, 2001. This Appendix B shall supersede the provisions of
the Plan and Appendix A to the extent those provisions are inconsistent with the
provisions of this Appendix B.
B.2. Increase in Compensation Limit.
The annual compensation of each Participant taken into account in determining
allocations for any Plan Year beginning after December 31, 2001 shall not exceed
$200,000, as adjusted for cost -of- living increases in accordance with Section
401(a)(17)(B) of the Code. Annual compensation means compensation during the Plan
Year or such other consecutive 12 -month period over which compensation is otherwise
determined under the Plan (the determination period). The cost -of- living adjustment in
effect for a calendar year applies to annual compensation for the determination period
that begins with or within such calendar year.
Notwithstanding the foregoing, this Section B.2 shall not apply to any Participant eligible
for a higher limit on annual compensation under the transition rule described in Section
1.401(a)(17)- 1(d)(4)(ii) of the Treasury Regulations.
B.3. Increase in Limitations on Contributions.
This Section B.3 shall be effective for limitation years beginning after December 31,
2001. The Annual Additions that may be contributed or allocated to a Participant's
Aggregate Account under the Plan for any limitation year shall not exceed the lesser of:
NB I :574829.7
•
• •
(a) $40,000, as adjusted for increases in the cost -of- living under Section 415(d) of the
Code, or
(b) 100 percent of the Participant's compensation, within the meaning of Section
415(c)(3) of the Code, for the limitation year. The compensation limit referred to in this
paragraph (b) shall not apply to any contribution for medical benefits after separation
from service (within the meaning of Section 401(h) or Section 419A(f)(2) of the Code)
which is otherwise treated as an Annual Addition.
B.4. Modification of Definition of Eligible Retirement Plan.
(a) This Section B.4 shall apply to distributions made after December 31, 2001.
(b) For purposes of the direct rollover provisions in the Plan, an eligible retirement
plan shall also mean an annuity contract described in Section 403(b) of the Code and an
eligible plan under Section 457(b) of the Code which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or political subdivision
of a state and which agrees to separately account for amounts transferred into such plan
from this Plan. The definition of eligible retirement plan shall also apply in the case of a
distribution to a surviving spouse, or to a spouse or former spouse who is the alternate
payee under a qualified domestic relation order, as defined in Section 414(p) of the Code.
(c) For purposes of the direct rollover provisions in the Plan, any amount that is
distributed on account of hardship shall not be an eligible rollover distribution and the
distributee may not elect to have any portion of such a distribution paid directly to an
eligible retirement plan.
(d) For purposes of the direct rollover provisions in the Plan, a portion of a
distribution shall not fail to be an eligible rollover distribution merely because the portion
consists of after -tax employee contributions which are not includible in gross income.
However, such portion may be transferred only to an individual retirement account or
annuity described in Section 408(a) or (b) of the Code, or to a qualified defined
contribution plan described in Section 401(a) or 403(a) of the Code that agrees to
separately account for amounts so transferred, including separately accounting for the
portion of such distribution which is includible in gross income and the portion of such
distribution which is not so includible."
NB1:574829.7 2
2. Effective January 1, 2003, the following Appendix C is added to read as follows:
"APPENDIX C
MINIMUM DISTRIBUTION REQUIREMENTS
C.1. Adoption and Effective Date of Appendix C.
This Appendix C is adopted to reflect the final Treasury Regulations promulgated under
Section 401(a)(9) of the Code. Except as otherwise provided, this Appendix C shall
apply for purposes of determining required minimum distributions for calendar years
beginning with the 2003 calendar year. This Appendix C shall supersede the provisions
of the Plan and Appendix A to the extent those provisions are inconsistent with the
provisions of this Appendix C.
All distributions required under this Appendix C will be determined and made in
accordance with the Treasury Regulations promulgated under Section 401(a)(9) of the
Code. Notwithstanding the other provisions of this Appendix C, distributions may be
made under a designation made before January 1, 1984, in accordance with Section
242(b)(2) of the Tax Equity and Fiscal Responsibility Act ( "TEFRA ") and the provisions
of the Plan that relate to Section 242(b)(2) of TEFRA.
C.2. Time and Manner of Distribution.
(a) Required Beginning Date. The Participant's entire interest will be distributed,
or begin to be distributed, to the Participant no later than the Participant's Required
Beginning Date.
(b) Death of Participant Before Distributions Begin. If the Participant dies before
distributions begin, the Participant's entire interest will be distributed, or begin to be
distributed, no later than as follows:
(i) If the Participant's surviving spouse is the Participant's sole Designated
Beneficiary, then distributions to the surviving spouse will begin by December 31 of the
calendar year immediately following the calendar year in which the Participant died, or
by December 31 of the calendar year in which the Participant would have attained age
70%2, if later.
(ii) If the Participant's surviving spouse is not the Participant's sole
Designated Beneficiary, then distributions to the Designated Beneficiary will begin by
December 31 of the calendar year immediately following the calendar year in which the
Participant died.
(iii) If there is no Designated Beneficiary as of September 30 of the year
following the year of the Participant's death, the Participant's entire interest will be
distributed by December 31 of the calendar year containing the fifth anniversary of the
Participant's death.
(iv) If the Participant's surviving spouse is the Participant's sole Designated
Beneficiary and the surviving spouse dies after the Participant but before distributions to
NB :574829.7 3
• •
the surviving spouse begin, this Section C.2(b), other than Section C.2(b)(i), will apply as
if the surviving spouse were the Participant.
For purposes of this Section C.2(b) and Section C.4, unless Section C.2(b)(iv) applies,
distributions are considered to begin on, the Participant's Required Beginning Date. If
Section C.2(b)(iv) applies, distributions are considered to begin on the date distributions
are required to begin to the surviving spouse under Section C.2(b)(i). If distributions
under an annuity purchased from an insurance company irrevocably commence to the
Participant before the Participant's Required Beginning Date (or to the Participant's
surviving spouse before the date distributions are required to begin to the surviving
spouse under Section C.2(b)(i)), the date distributions are considered to begin is the date
distributions actually commence.
(c) Forms of Distribution. Unless the Participant's interest is distributed in the form
of an annuity purchased from an insurance company or in a single sum on or before the
Required Beginning Date, as of the first Distribution Calendar Year distributions will be
made in accordance with Sections C.3 and C.4 of this Appendix C. If the Participant's
interest is distributed in the form of an annuity purchased from an insurance company,
distributions thereunder will be made in accordance with the requirements of Section
401(a)(9) of the Code and the Treasury Regulations.
C.3. Required Minimum Distributions During Participant's Lifetime.
(a) Amount of Required Minimum Distribution For Each Distribution Calendar
Year. During the Participant's lifetime, the minimum amount that will be distributed for
each Distribution Calendar Year is the lesser of:
(i) the quotient obtained by dividing the Participant's Account Balance by the
distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9) -9 of the
Treasury Regulations, using the Participant's age as of the Participant's birthday in the
Distribution Calendar Year; or
(ii) if the Participant's sole Designated Beneficiary for the Distribution
Calendar Year is the Participant's spouse, the quotient obtained by dividing the
Participant's Account Balance by the number in the Joint and Last Survivor Table set
forth in Section 1.401(a)(9) -9 of the Treasury Regulations, using the Participant's and
spouse's attained ages as of the Participant's and spouse's birthdays in the Distribution
Calendar Year.
(b) Lifetime Required Minimum Distributions Continue Through Year of
Participant's Death. Required minimum distributions will be determined under this
Section C.3 beginning with the first Distribution Calendar Year and up to and including
the Distribution Calendar Year that includes the Participant's date of death.
C.4. Required Minimum Distributions After Participant's Death.
(a) Death On or After Date Distributions Begin.
(i) Participant Survived by Designated Beneficiary. If the Participant dies
on or after the date distributions begin and there is a Designated Beneficiary, the
minimum amount that will be distributed for each Distribution Calendar Year after the
NB i :574829.7 4
• •
year of the Participant's death is the quotient obtained by dividing the Participant's
Account Balance by the longer of the remaining Life Expectancy of the Participant or the
remaining Life Expectancy of the Participant's Designated Beneficiary, determined as
follows:
(I) The Participant's remaining Life Expectancy is calculated using the age of
the Participant in the year of death, reduced by one for each subsequent year.
(II) If the Participant's surviving spouse is the Participant's sole Designated
Beneficiary, the remaining Life Expectancy of the surviving spouse is calculated for each
Distribution Calendar Year after the year of the Participant's death using the surviving
spouse's age as of the spouse's birthday in that year. For Distribution Calendar Years
after the year of the surviving spouse's death, the remaining Life Expectancy of the
surviving spouse is calculated using the age of the surviving spouse as of the spouse's
birthday in the calendar year of the spouse's death, reduced by one for each subsequent
calendar year.
(III) If the Participant's surviving spouse is not the Participant's sole
Designated Beneficiary, the Designated Beneficiary's remaining Life Expectancy is
calculated using the age of the Beneficiary in the year following the year of the
Participant's death, reduced by one for each subsequent year.
(ii) No Designated Beneficiary. If the Participant dies on or after the date
distributions begin and there is no Designated Beneficiary as of September 30 of the year
after the year of the Participant's death, the minimum amount that will be distributed for
each Distribution Calendar Year after the year of the Participant's death is the quotient
obtained by dividing the Participant's Account Balance by the Participant's remaining
Life Expectancy calculated using the age of the Participant in the year of death, reduced
by one for each subsequent year.
(b) Death Before Date Distributions Begin.
(i) Participant Survived by Designated Beneficiary. If the Participant dies
before the date distributions begin and there is a Designated Beneficiary, the minimum
amount that will be distributed for each Distribution Calendar Year after the year of the
Participant's death is the quotient obtained by dividing the Participant's Account Balance
by the remaining Life Expectancy of the Participant's Designated Beneficiary,
determined as provided in Section C.4(a).
(ii) No Designated Beneficiary. If the Participant dies before the date
distributions begin and there is no Designated Beneficiary as of September 30 of the year
following the year of the Participant's death, distribution of the Participant's entire
interest will be completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
(iii) Death of Surviving Spouse Before Distributions to Surviving Spouse
Are Required to Begin. If the Participant dies before the date distributions begin, the
Participant's surviving spouse is the Participant's sole Designated Beneficiary, and the
surviving spouse dies before distributions are required to begin to the surviving spouse
under Section C.2(b)(i), this Section C.4(b) will apply as if the surviving spouse were the
Participant.
NB I :574829.7 5
• •
C.5. Definitions.
(a) Designated Beneficiary. The individual who is designated as the Beneficiary
consistent with the terms of the Plan and is the Designated Beneficiary under Section
401(a)(9) of the Code and Section 1.401(a)(9) -1, Q &A -4, of the Treasury Regulations.
(b) Distribution Calendar Year. A calendar year for which a minimum distribution
is required. For distributions beginning before the Participant's death, the first
Distribution Calendar Year is the calendar year immediately preceding the calendar year
which contains the Participant's Required Beginning Date. For distributions beginning
after the Participant's death, the first Distribution Calendar Year is the calendar year in
which distributions are required to begin under Section C.2(b). The required minimum
distribution for the Participant's first Distribution Calendar Year will be made on or
before the Participant's Required Beginning Date. The required minimum distribution
for other Distribution Calendar Years, including the required minimum distribution for
the Distribution Calendar Year in which the Participant's Required Beginning Date
occurs, will be made on or before December 31 of that Distribution Calendar Year.
(c) Life Expectancy. Life expectancy as computed by use of the Single Life Table
in Section 1.401(a)(9) -9 of the Treasury Regulations.
(d) Participant's Account Balance. The account balance as of the last Valuation
Date in the calendar year immediately preceding the Distribution Calendar Year
(valuation calendar year) increased by the amount of any contributions made and
allocated or forfeitures allocated to the account balance as of dates in the valuation
calendar year after the valuation date and decreased by distributions made in the
valuation calendar year after the valuation date. The account balance for the valuation
calendar year includes any amounts rolled over or transferred to the Plan either in the
valuation calendar year or in the Distribution Calendar Year if distributed or transferred
in the valuation calendar year.
(e) Required Beginning Date. The April 1 of the calendar year following the later
of either the calendar year in which the employee attains age 701/2 or the calendar year in
which the employee retires."
* **
Executed this /5 day of /UOve b er , 2002.
City of Se. :
By: /,
"a T ° ' B • B R . N - aRSK.I
Tit CrT y r � CTE2
NB 1:574829.7
• •
THE CITY OF SEAL BEACH
PUBLIC AGENCY RETIREMENT SYSTEM
ALTERNATE RETIREMENT SYSTEM
(PARS-ARS)
AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 2002
• •
TABLE OF CONTENTS
Page
INTRODUCTION 2
DEFINITIONS 4
ELIGIBILITY REQUIREMENTS FOR PARTICIPATION 7
2.1 Time of Participation 7
2.2 Termination of Participation 7
2.3 Effect of Transfer to Ineligible Employment 7
2.4 In Service Distributions 7
CONTRIBUTIONS 8
3.1 Amount of Employer Contributions 8
3.2 Amount of Employee Contributions 8
3.3 Administrative Expenses 8
3.4 Allocation of Administrative Expenses 8
3.5 Limits on Annual Additions 8
3.6 Vesting 9
3.7 Investment in Accordance With Act 9
3.8 Reversions 9
FUNDING AND VALUATION 10
4.1 Funding 10
4.2 Valuation 10
4.3 Type and Nature of Plan and Trust 10
VESTING 11
5.1 Vesting in Employer Contribution Account 11
5.2 Vesting in Employee Contribution Account 11
5.3 Full or Partial Termination 11
DISTRIBUTION OF BENEFITS 12
6.1 Incidental Death Benefits 12
6.2 Amount of Distribution 12
6.3 Lump Sum Distributions 12
6.4 Time of Distribution 13
6.5 Participant's Rights Not Subject To Execution 13
NB 1:664952.7 -1-
a s
•
TABLE OF CONTENTS
(continued)
Page
6.6 Unclaimed Benefits 13
6.7 Direct Rollovers 13
6.8 Military Service 14
DEATH BENEFITS 15
7.1 Designation of Beneficiary 15
7.2 Married Participant 15
7.3 Spouse's Signature 15
7.4 Default Beneficiary 15
7.5 Domestic Partners 15
ADMINISTRATION AND AMENDMENT OF PLAN 17
8.1 Designation of Plan Administrator 17
8.2 Rules and Regulations 17
8.3 Amendment and Termination 17
APPENDIX A ANNUAL ADDITION LIMITS 18
NB 1:664952.7 -ii-
• •
INTRODUCTION
The City of Seal Beach (the "Employer") has adopted this tax qualified governmental
volume submitter profit sharing plan for the benefit of its Eligible Employees. This document
is a full and complete amendment and restatement of the City of Seal Beach PARS Alternate
Retirement System Plan.
It is intended that this Plan and the Trust established to hold the assets of the Plan
shall be qualified under Section 401(a) and tax-exempt under Section 501(a) of the Internal
Revenue Code of 1986, together with any amendments thereto ("Code"). It is also intended
that this Plan and the Trust established hereunder shall meet the requirements of a pension
trust under California Government Code sections 53215 - 53224, or their successor sections.
At any time prior to the satisfaction of all liabilities with respect to Participants
and their Beneficiaries under the Trust created pursuant to this Plan, the Trust assets shall
not be used for, or diverted to, purposes other than the exclusive benefit of Participants or
their Beneficiaries, as prescribed in Section 401(a)(2) of the Code.
It is intended that the Plan satisfy the requirements of the applicable provisions of the
Uruguay Round Agreements Act, the Small Business Job Protection Act, the Taxpayer Relief
Act of 1997, and the Uniformed Service Employment and Reemployment Rights Act of 1994
(commonly referred to as the "GUST" amendments) and that the provisions of this restated
Plan reflecting the GUST amendments are hereby made effective as of the dates required by
the legislation referred to in this sentence.
It is further intended that the Plan satisfy the requirements of the applicable
provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 and the
related requirements of the revisions to Section 401(a)(9) of the Code (commonly referred to
2
NB 1:664952.7
• •
as "EGTRRA") and that the provisions of this restated Plan reflecting EGTRRA are hereby
made effective as of the dates required by the legislation referred to in this sentence.
3
NB I:664952.7
• •
ARTICLE I
DEFINITIONS
1.1 "Act" means California Government Code Sections 53215 - 53224.
1.2 "Aggregate Account" means, with respect to each Participant, the value of all
accounts maintained on behalf of the Participant, whether attributable to Employer or
Employee contributions.
1.3 "Amended Effective Date" means January 1, 2002.
1.4 "Beneficiary" means the person, trust or other entity to whom a share of a deceased
Participant's Aggregate Account is payable.
1.5 "Code" means the Internal Revenue Code of 1986 as amended from time to time.
1.6 "Compensation" means all compensation for that portion of the Plan Year during
which the Employee was a Participant, paid in cash by the Employer to the
Participant for personal services. Further, the Employer as defined in Section 1.12
hereof, defines compensation as base salary. Compensation in excess of $150,000
shall be disregarded. Such amount shall be adjusted for increases in the cost of living
in accordance with Code Section 401(a)(17)(B) except that the dollar increase in
effect on January 1 of any calendar year shall be effective for the Plan Year beginning
with or within such calendar year. For any short Plan Year, the compensation limit
shall be an amount equal to the compensation limit for the calendar year in which the
Plan Year begins multiplied by a ratio obtained by dividing the number of full months
in the short Plan Year by twelve (12). The limitation on the maximum amount of
compensation that may be taken into account under the Plan, as set forth in this
definition of compensation, shall apply for Plan Years beginning after December 31,
1995, or 90 days after the opening of the first legislature session on or after January 1,
1996. The annual compensation of each Participant, as defined above by the
Employer, taken into account in determining allocations for any Plan Year beginning
after December 31, 2001, shall not exceed $200,000, as adjusted for cost-of-living
increases in accordance with Section 401(a)(17)(B) of the Code. The preceding
sentence shall not apply to any Participant eligible for a higher limit on annual
compensation under the transition rule described in Section 1.401(a)(17)-1(d)(4)(ii) of
the Treasury Regulations.
1.7 "Effective Date" means December 1, 1993.
1.8 "Eligible Class of Employees" means the eligible class of employees as provided
herein and in the applicable governing board policies and regulations promulgated
thereunder by the Employer.
4
NB I:664952.7
• •
1.9 "Eligible Employee" means all of those Employees of the Employer whose
Participation in this Plan is not prohibited or restricted by the provisions of a
collective bargaining agreement or another plan or retirement system maintained by
the Employer. Employees who are exempt from coverage under Social
Security by federal law or regulation shall not be eligible employees.
1.10 "Employee" means an employee of the Employer.
1.11 "Employee Contribution Account" means the account by that name established
pursuant to Section 3.2 hereof.
1.12 "Employer" means the City of Seal Beach that has adopted this Plan.
1.13 "Employer Contribution Account" means the account by that name established
pursuant to Section 3.1 hereof.
1.14 "Inactive Participant" means a Participant who is no longer eligible to participate
because he is no longer in a class of Employees eligible to participate in this Plan but
is still employed by the Employer.
1.15 "Ineligible Employee" means all of those Employees of the Employer whose
Participation in this Plan is prohibited or restricted by the provisions of a collective
bargaining agreement, another plan or retirement system maintained by the Employer,
or exempt from coverage under Social Security by federal law or regulation.
1.16 "Investment Manager" means the entity appointed by the Employer as the
investment manager under the Plan.
1.17 "Limitation Year" means the limitation year under Section 3.5 hereof and shall
mean the Plan Year.
1.18 "Normal Retirement Age" means sixty (60) years of age.
1.19 "Normal Retirement Date" means the first day of the month coincident with or next
following the date on which the Participant attains Normal Retirement Age.
1.20 "Participant" means a Participant under Article II hereof.
1.21 "Participant Aggregate Accounts" means the accounts by that name established
pursuant to Article III hereof.
1.22 "Participant Contributions" means contributions made on behalf of the Participant
by the Employer as Pick Up Contributions.
1.23 "Participant Contribution Account" means the value of the Participant's interest in
this Plan that is attributable to Pick Up Contributions and/or Participant after tax
Contributions.
5
Nn1.664952.7
•
1.24 "PERS" means the California Public Employees' Retirement System.
1.25 "Pick Up Contributions" means Participant contributions made by the Employer on
behalf of the Participant pursuant to Section 414(h) of the Internal Revenue Code.
Pick Up Contributions shall not under any circumstances be paid to the Participant or
be directed by the Participant for any purpose except as Pick Up Contributions to this
Plan. The Employer may make Pick Up Contributions through a reduction in salary,
an offset against future salary increases, or a combination of the two.
1.26 "Plan" means the City of Seal Beach PARS Alternate Retirement System.
1.27 "Plan Administrator" means the individual or position designated by the Employer
to act on behalf of the Employer in matters relating to this Plan. If no designation is
made, the Employer shall be the Plan Administrator. If a Plan
Administrator has been appointed, the word "Employer" as used in this Plan shall
mean Plan Administrator unless the context indicates a different meaning is intended.
1.28 "Plan Year" means the consecutive twelve month period beginning on January I
and ending on December 31.
1.29 "Public Agency" means an employer authorized under California Government Code
Article 1.5, Sections 53215 through 53224 to establish a pension trust.
1.30 "Regulations" means the regulations adopted or proposed by the Department of
Treasury from time to time pursuant to the Code.
1.31 "Retirement System" means any plan that meets the requirements for a
retirement system under Section 3121(b)(7)(F) of the Code and the final
regulations thereunder.
1.32 "Social Security" means the Social Security program as set forth in Title 42 of the
United States Code, Section 301 et seq.
1.33 "STRS" means the California State Teachers' Retirement System.
1.34 "Trust" means the trust established as part of the Public Agency Retirement Trust
to hold the assets of the Plan.
1.35 "Trustee" means the trustee of the Trust.
1.36 "Valuation Date" means the last day of the Plan Year or such other day on which
the assets of the Trust are valued and the value of each Participant's Aggregate
Account is determined.
1.37 "Vested" means the nonforfeitable portion of any account maintained on behalf of a
Participant.
6
NB 1:664952.7
• •
ARTICLE II
ELIGIBILITY REQUIREMENTS FOR PARTICIPATION
2.1 Time of Participation
An Eligible Employee shall participate in this Plan on each day during which the Employee
is not accruing a benefit under Social Security or another Retirement System provided and
maintained by the Employer.
2.2 Termination of Participation
A Participant shall cease to be a Participant on the date on which the Participant begins to
participate in another Retirement System or the date of his termination of employment as
determined by the Employer.
2.3 Effect of Transfer to Ineligible Employment
If a Participant is no longer an Eligible Employee and becomes an Ineligible Employee, such
Employee will participate immediately upon returning to the Eligible Class of Employees.
Such participation shall commence as of the first day of such eligible employment.
2.4 In Service Distributions
A Participant who is no longer eligible to participate because he is no longer in the class of
eligible employees, but who has not terminated employment with the Employer, shall
become an Inactive Participant and shall remain such for twenty-four (24) months after
which his interest in the Plan will be distributed to him.
7
NB 1:664952.7
• •
ARTICLE III
CONTRIBUTIONS
3.1 Amount of Employer Contributions
There is hereby created and established and shall be maintained by the Plan Administrator
the Employer Contribution Account. For each day that an Employee remains a Participant
under this Plan, the Employer shall make a contribution of one and three tenths percent
(1.3%) of Compensation. Such contribution shall be made no later than the close of the Plan
Year. This amount shall be credited to the Employer Contribution Account. Employer
Contributions will be allocated to each Participant in the ratio that such Participant's
compensation bears to the compensation of all Participants.
3.2 Amount of Employee Contributions
There is hereby created and established and shall be maintained by the Plan Administrator
the Employee Contribution Account. Prior to March 5, 1997, for each day that an Employee
remains a Participant under this Plan, the Employee shall make a contribution of six and two
tenths percent (6.2%) of Compensation. Such contributions shall be after-tax contributions
and shall be credited to the Employee Contribution Account. After March 5, 1997, for each
day that an Employee remains a Participant under this Plan, the Employee shall make a
contribution of six and two tenths percent (6.2%) of Compensation. Such contributions shall
be pre-tax contributions and shall be credited to the Employee Contribution Account. In
accordance with Section 414(h) of the Code and Sections 1.22 and 1.25 of this Plan, the
contributions required under this Section 3.2 shall be Pick Up Contributions.
3.3 Administrative Expenses
In accordance with Section 53217 of the Act the Employer may make contributions to the
Trust sufficient to defray all or part of the expenses of administering the Plan or may pay
such expenses directly.
3.4 Allocation of Administrative Expenses
If the Employer chooses not to pay the expenses of administering this Plan, such expenses
shall be charged ratably against the Participants' Aggregate Accounts.
3.5 Limits on Annual Additions
(a) Notwithstanding anything else to the contrary, annual additions credited to a
Participant's Account during a Limitation Year (i.e. Plan Year) shall not exceed the lesser of
$30,000 (adjusted as permitted by Section 415(d)(1) of the Code and Regulations issued
thereunder) or 25 percent of the Participant's Compensation. This Section 3.5 shall be
construed and interpreted in accordance with the provisions of Appendix A attached hereto.
8
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• •
(b) Effective for the Plan Years beginning after December 31, 2001, annual additions
credited to a Participant's Account during a Limitation Year shall not exceed the lesser of
$40,000 (adjusted as permitted by Section 415(d) of the Code and Regulations issued
thereunder) or 100 percent of Section 415 Compensation (provided that such 100 percent
limitation shall not apply to any contributions for medical benefits after separation from
service, within the meaning of Section 401(h) or Section 419A(f)(2) of the Code) including
compensation not includible in the Participant's taxable income by reason of Code Sections
125, 132(0(4) or 457.
3.6 Vesting
A Participant will be fully vested in his Aggregate Account at all times. If the Plan's vesting
schedule is amended or the Plan is amended in any way that directly or indirectly affects the
computation of a Participant's nonforfeitable percentage, or if the Plan is deemed amended
by an automatic change to or from a top-heavy vesting schedule, each Participant with at
least three years of service with the Employer may elect within a reasonable period of time
after the adoption of the amendment or change to have his nonforfeitable percentage
computed under the Plan without regard to the amendment or change.
3.7 Investment in Accordance With Act
All contributions, interest earned, and any assets of the Plan shall at all times be invested
and managed in accordance with the requirements of the Act.
3.8 Reversions
The Employer shall have the right to a reversion of assets from this Plan if(1) a contribution
is conditioned upon the initial qualification of the Plan, a timely determination letter request
is filed, and the Plan receives an adverse determination, or (2) the reversion is due to a good
faith mistake of fact, or(3) the contribution is conditioned on its deductibility under Section
404 of the Code.
9
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ARTICLE IV
FUNDING AND VALUATION
4.1 Funding
In accordance with Section 53216 of the Act, the assets of the Plan shall be held in a trust or
invested in an insurance contract which may or may not be held in a trust. Subject to Sections
53216.1, 53216.5 and 53216.6 of the Act for the purpose of funding this Plan, the Employer
shall provide the Trustee or investment manager with written direction on how to invest the
assets of the Plan. Notwithstanding anything to the contrary contained in the trust agreement,
in-kind contributions shall not be permissible under the Plan.
4.2 Valuation
The value of a Participant's Employer Contribution Account and Employee Contribution
Account shall be determined annually on a date hereafter referred to as a Valuation Date. As
of each Valuation Date there shall be determined the amount of the investment gain or loss to
be credited to the total of all assets held for Employer Contribution Accounts and Employee
Contribution Accounts during the period since the preceding Valuation Date. The total
adjustment shall be allocated among all of the individual Participant and Inactive Participant
Accounts as of the current Valuation Date. The assets of the Trust shall be valued annually at
fair market value. On the Valuation Date, the earnings and losses of the Trust will be
allocated to each Participant and Inactive Participant.
4.3 Type and Nature of Plan and Trust
Neither the faith and credit nor the taxing power of the Employer, the State of California or
any other political subdivision thereof other than the Employer is pledged to the distribution
of benefits hereunder. Except for contributions and other amounts hereunder, no other
amounts are pledged to the distribution of benefits hereunder. Distributions of benefits are
neither general nor special obligations of the Employer, but are payable solely from
contributions, as more fully described herein. No Employee or Beneficiary may compel the
exercise of the taxing power by the Employer. Distributions of benefits are not a debt of the
Employer, the State of California or any of its political subdivisions within the meaning of
any constitutional or statutory limitation or restriction. Distributions are not a legal or
equitable pledge, charge, lien or encumbrance, upon any of the Employer's property, or upon
any of its income, receipts or revenues, except amounts in the accounts which are, under the
terms of this Plan and the Act, set aside for distributions of benefits. Neither the Participants
of the legislative body of the Employer nor its officers, employees, agents or volunteers are
liable hereunder. Benefits under the Plan may not be assigned or alienated except to the
extent allowable under IRC Sections 401(a)(13) and 414(p).
10
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• •
ARTICLE V
VESTING
5.1 Vesting in Employer Contribution Account
• Each Participant shall be one hundred percent (100%) Vested in his Employer Contribution
Account at all times.
5.2 Vesting in Employee Contribution Account
Each Participant shall be one hundred percent (100%) Vested in his Employee Contribution
Account at all times.
5.3 Full or Partial Termination
Notwithstanding the vesting schedule in 5.1 and 5.2, upon the complete discontinuance of
Employer contributions to the Plan or upon any full or partial termination of the Plan, all
amounts credited to the account of any affected Participant shall become one hundred percent
(100%) Vested and shall not thereafter be subject to forfeiture for any reason.
11
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• •
ARTICLE VI
DISTRIBUTION OF BENEFITS
•
6.1 Incidental Death Benefits
(a) Distributions from the Plan shall be made in accordance with Section 401(a)(9) of the
IRC, including the incidental death benefits under Section 401(a)(9)(G) and the regulations
thereunder. The required beginning date of benefit payments that represent the entire interest
of the Participant shall be as follows:
(b) Effective January 1, 1997, a Participant shall have the option of commencing
distributions by April 1 following age 701/4 or deferring payment until actual retirement.
(c) Except as otherwise provided, this Section 6.1 shall apply for purposes of determining
required minimum distributions for calendar years beginning with the 2003 calendar year.
All distributions required under this Section 6.1(c) will be determined and made in
accordance with the Treasury Regulations promulgated under Section 401(a)(9) of the Code.
(i) Time and Manner of Distribution.
(A) Required Beginning Date. The Participant's entire interest will be distributed
to the Participant no later than the Participant's Required Beginning Date.
(B) Death of Participant Before Distributions Begin. If the Participant dies before
distributions begin, the Participant's entire interest will be distributed no later than December
31 of the calendar year immediately following the calendar year in which the Participant
died.
(C) Forms of Distribution. The Participant's interest shall be distributed in the
form of a single sum on or before the Required Beginning Date.
(D) Required Beginning Date. The April 1 of the calendar year following the
calendar year in which the Participant attains age 701/4 or, if the Participant opts to defer
payment until retirement, the April 1 of the calendar year following the calendar year in
which the Participant actually retires.
6.2 Amount of Distribution
A Participant who terminates employment for any reason shall be entitled to one hundred
percent (100%) of the value of his Aggregate Account determined as of the most current
Valuation Date.
6.3 Lump Sum Distributions
All distributions shall be made in a lump sum payment in cash constituting the entire value of
the distributee's Aggregate Account.
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6.4 Time of Distribution
Unless otherwise specified herein, benefits shall become distributable to a Participant (or the
Participant's Beneficiary in any case of the Participant's death) upon any termination of the
Participant's employment by reason of resignation, discharge, retirement, disability, or death.
This Plan does not provide for mandatory distributions of any amount. Therefore, no
distribution is made (regardless of the amount of the distribution) without the consent of the
Participant (or the Participant's Beneficiary in any case of the Participant's death).
6.5 Participant's Rights Not Subject To Execution
The right of a Participant to a benefit under this Plan is not subject to execution or any other
process whatsoever, except to the extent permitted by Section 704.110 of the Code of Civil
Procedure of the State of California and is unassignable.
6.6 Unclaimed Benefits
Each Participant and Beneficiary of a deceased Participant shall file with the Plan
Administrator from time to time in writing, his or her home address and each change of
home address. Any communication shall be addressed to the Participant or the Beneficiary
at his or her last home address filed with the Plan Administrator, or if no such address was
filed, then at his or her last home address as shown on the Agency's records, shall be binding
on the Participant or Beneficiary for all purposes of the Plan. The Plan Administrator shall
not be obligated to search for or ascertain the whereabouts of any Participant or Beneficiary,
and the Participant's Accrued Benefit shall be subject to the abandoned property law of the
applicable jurisdiction.
6.7 Direct Rollovers
This section applies to all distributions made on or after January 1, 1993. Notwithstanding
any provision of the Plan to the contrary that would otherwise limit a distributee's election
under this Plan, a distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct rollover.
(a) Definitions
(i) Eligible Rollover Distribution
An eligible rollover distribution is any distribution of all or any portion of the balance to the
credit of the distributee including hardship amounts received after December 31, 1998,
except that an eligible rollover distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated Beneficiary, or for a specified period of ten
(10) years or more; any distribution to the extent such distribution is required under Section
13
NBI:664952.7
• •
401(a)(9) of the Internal Revenue Code, any hardship distribution, and the portion of any
distribution that is not includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer securities).
(ii) Eligible Retirement Plan
An eligible retirement plan is an individual retirement account described in Section 408(a)
of the Code, an individual retirement annuity described in Section 408(b) of the Code, or a
qualified trust described in Section 401(a) of the Code that accepts the distributee's eligible
rollover distribution. An eligible retirement plan shall also mean an annuity contract
described in Section 403(b) of the Code and an eligible plan under Section 457(b) of the
Code which is maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and which agrees to separately
account for amounts transferred into such plan from this Plan.
(iii) Distributee
A distributee includes an Employee or former Employee, the Employee's or former
Employee's surviving spouse, and the Employee's or former Employee's spouse or former
spouse who is the alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest of the spouse or
former spouse.
(iv) Direct Rollover
A direct rollover is a payment by the Plan to the eligible retirement plan specified by the
distributee.
6.8 Military Service
Notwithstanding any provision of this Plan to the contrary, contributions, benefits and
service credit with respect to qualified military service will be provided in accordance with
Section 414(u) of the Code.
14
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S
ARTICLE VII
DEATH BENEFITS
7.1 Designation of Beneficiary
Each Participant and Inactive Participant shall have the right to designate a Beneficiary to
receive the death benefits that are payable from this Plan. Such designation must be
evidenced by a written instrument filed with the Employer on a form prescribed by the
Employer and signed by the Participant.
7.2 Married Participant
The Beneficiary for a married Participant shall at all times be the Participant's spouse and
may not be changed to someone other than such spouse unless the consent of such spouse is
provided upon a written form witnessed by a duly authorized Plan representative or a notary
public and acceptable to the Employer. If no such designation is on file with the Employer
at the time of the death of the Participant, or if for any reason at the sole discretion of the
Employer such designation is defective, then the spouse of such Participant shall be
conclusively deemed to be the Beneficiary designated to receive such benefit.
7.3 Spouse's Signature
The signature of the Participant's spouse shall be required on a designation of beneficiary
form if the spouse is not the Beneficiary, unless the Participant declares in writing that one
of the following conditions exists:
(a) The Participant is not married;
(b) The Participant does not know and has taken all reasonable steps to determine the
whereabouts of the spouse;
(c) The spouse is incapable of executing the acknowledgement because of an
incapacitating mental or physical condition.
7.4 Default Beneficiary
In the event the Participant dies and is not survived by a spouse, the Aggregate Account shall
pass by the laws of intestacy.
7.5 Domestic Partners
Effective as of January 1, 2005, for purposes of this Article VII only: (1) all references to
'marriage' shall also include 'registered domestic partnerships,' (2) individuals in a 'registered
domestic partnership' shall be considered `married,' and (3) all references to a 'spouse' shall
15
NB 1:664952.7
• •
•
also include a registered domestic partner. A 'registered domestic partner' and a `registered
domestic partnership' refer to persons and partnerships satisfying the requirements of the
California Family Code and officially registered as of the date of death with the Secretary of
State as such in accordance with Section 298.5 of the California Family Code.
16
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ARTICLE VIII
ADMINISTRATION AND AMENDMENT OF PLAN
8.1 Designation of Plan Administrator
The Employer is the Plan Administrator under this Plan unless an individual employed by, or
a position within the Employer, has been appointed by the Employer as Plan Administrator.
In addition to a Plan Administrator the Employer may designate a delegatee to perform those
activities relating to the Plan as specified in the written appointment of such delegatee. The
term "Employer" as used in this Article shall mean the Plan Administrator or delegatee
where responsibility for administration of the Plan has been given to such parties.
8.2 Rules and Regulations
The Employer shall supervise and control the operation of this Plan in accordance with its
terms and may make rules and regulations for the administration of this Plan that are not
inconsistent with the terms and provisions hereof. The Employer shall determine any
questions arising in connection with the interpretation, application or administration of the
Plan (including any question of fact relating to age, employment, compensation or eligibility
of Employees) and its decisions or actions in respect thereof shall be conclusive and binding
upon any and all persons and parties. The Employer's interpretations, determinations and
actions taken under the Plan shall in all cases result in like treatment for Employees who are
similarly situated.
8.3 Amendment and Termination
The Employer shall have the right to amend, modify or terminate this Plan at any time. In the
event of the complete discontinuance of this Plan, the entire interest of each Participant
affected thereby shall immediately become 100% Vested. The Employer shall not be liable
for the payment of any benefits under this Plan and all benefits hereunder shall be payable
solely from the assets of the Trust.
17
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• •
APPENDIX A
ANNUAL ADDITION LIMITS
Section 3.5 of the Plan shall be construed in accordance with this Appendix A. Unless the
context clearly requires otherwise, words and phrases used in this Appendix A shall have the same
meanings that are assigned to them under the Plan.
A.1 Definitions
As used in this Appendix A, the following terms shall have the meanings specified below.
"Annual Additions" shall mean the sum credited to a Participant's Accounts for any Plan
Year of(i) Employer contributions, (ii) Employee contributions, (iii) forfeitures, and (iv) amounts
credited after March 31, 1984, to an individual medical account, as defined in Section 415(1)(2) of
the Code which is part of a pension and annuity maintained by the Employer.
"Defined Benefit Plan" means a plan described in Section 414(j) and 414(k)(2) of the
Code.
"Defined Contribution Plan" means a plan described in Section 414(i) and 414(k)(2) of
the Code.
"Defined Benefit Plan Fraction" shall mean a fraction, the numerator of which is the
projected annual benefit (determined as of the close of the relevant Plan Year) of the Participant
under all Defined Benefit Plans maintained by the Employer, and the denominator of which is the
lesser of (i) the product of 1.25 multiplied by the dollar limitation in effect under Section
415(b)(I)(A) of the Code for the Plan Year, or (ii) the product of 1.4 multiplied by the amount
which may be taken into account under Section 415(b)(1)(B) of the Code with respect to the
Participant for the Plan Year.
"Defined Contribution Plan Fraction" shall mean a fraction, the numerator of which is
the sum of the annual additions to a Participant's accounts under all Defined Contribution Plans
maintained by the Employer, and the denominator of which is the sum of the lesser of(i) or (ii) for
such Plan Year and for each prior Plan Year of service with the Employer, where (i) is the product
of 1.25 multiplied by the dollar limitation in effect under Section 415(c)(1)(A) of the Code for the
Plan Year (determined without regard to Section 415(c)(6) of the Code), and (ii) is the product of
1.4 multiplied by the amount which may be taken into account under Section 415(c)(1)(B) of the
Code (or Section 415(c)(7) of the Code, if applicable) with respect to the Participant for the Plan
Year. Solely for purposes of this definition, contributions made directly by an Employee to a
Defined Benefit Plan which maintains a qualified cost-of-living arrangement as such term is
defined in Section 4I5(k)(2) shall be treated as Annual Additions. Notwithstanding the foregoing,
the numerator of the Defined Contribution Plan Fraction shall be adjusted pursuant to Regulation
Section 1.415-7(d)(I), Questions T-6 and T-7 of Internal Revenue Service Notice 83-10, and
Questions Q-3 and Q-14 of Internal Revenue Service Notice 87-21.
18
NB I:664952.7
• •
"Section 415 Compensation" shall mean a Participant's wages within the meaning of
Code Section 3401(a) and all other payments of compensation to the Participant by the Employer
(in the course of the Employer's business) for which the Employer is required to provide the
Participant a written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Section 415
Compensation shall be determined without regard to any rules under Code Section 3401(a) that
limit the remuneration included in wages based on the nature or location of the employment or the
services performed. Compensation for any limitation year is the compensation actually paid or
includible in gross income during such year. Effective January 1, 1998, "Section 415
Compensation" shall include elective deferrals as defined in Section 402(g)(3) of the Code and
any amount which is contributed or deferred by the Employer at the election of an Employee and
which is not includible in the gross income of the Employee by reason of Code Section 125,
132(f)(4) or 457.
A.2 Annual Addition Limitations
(a) The compensation limitation of Section 3.5 of the Plan shall not apply to any
contribution for medical benefits (within the meaning of Section 419A(f)(2)) after separation from
service which is treated as an Annual Addition. In the event that Annual Additions to all the
accounts of a Participant would exceed the limitations of Section 3.5 of the Plan, they shall be
reduced in the following priority: (i) return of Employee contributions to the Participant; (ii)
reduction of Employer contributions.
(b) If any Employer contributes amounts on behalf of Participants covered by the Plan
to other Defined Contribution Plans, the limitation on Annual Additions provided in Article III of
the Plan shall be applied to Annual Additions in the aggregate to the Plan and such other plans.
Reduction of Annual Additions, where required, shall be accomplished by reducing contributions
under such other plans pursuant to the directions of the fiduciary for administration of such other
plans or under priorities, if any, established by the terms of such other plans, and then, if
necessary, by reducing contributions under the Plan.
(c) In any case where a Participant under the Plan is also a participant under a Defined
Benefit Plan or a Defined Benefit Plan and other Defined Contribution Plans maintained by the
Employer, the sum of the Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction shall not exceed 1.0. Reduction of contributions to or benefits from all plans, where
required, shall be accomplished by first reducing benefits under such other Defined Benefit Plan
or plans, then by allocating any excess in the manner set out above with respect to the Plan, and
finally by reducing contributions or allocating any excess contributions with respect to other
Defined Contribution Plans, if any; provided, however, that adjustments necessary under this or
the next preceding paragraph may be made in a different manner and priority pursuant to the
agreement of the Employer and the administrators of all other plans covering such Participant,
provided such adjustments are consistent with procedures and priorities prescribed by the
Regulations under Section 415 of the Code. This Section A.2(c) shall not apply to Participants
who are Employees on or after January 1, 2000.
(d) In the event the limitations of Section 3.5 of the Plan or subsections (a) or (b) of
this Appendix A are exceeded and the conditions specified in Treasury Regulations §1.415-
6(b)(6) are met, the Employer may elect to (i) allocate the excess amount to other Participants in
19
NBI:664952.7
• •
the Plan for that Limitation Year, (ii) use the excess amount to reduce employer contributions for
the Participant for future Limitation Years (to the extent the Participant remains covered by the
Plan), or (iii) hold the excess amount unallocated for the Limitation Year and allocate it to all
Participants in the following Limitation Year(s).
20
NB 1:664952.7
•
• •
ADOPTION OF THE AMENDED AND RESTATED
CITY OF SEAL BEACH
PARS ALTERNATE RETIREMENT SYSTEM
The Amended and Restated City of Seal Beach PARS Alternate Retirement System is hereby
adopted effective January 1, 2002.
BY: moo/ C
TITLE: City Manager
DATE: )l-) o"CS
PLAN SUBMISSION TO THE IRS FOR A LETTER OF DETERMINATION
The decision to submit the foregoing Plan to the IRS shall be determined by the Plan
Administrator pursuant to his/her initials below:
XYes, please submit the Plan to the IRS for an individual Letter of Determination.
Rase(b e{e._
No, do not submit the Plan to the IRS for a Letter of Determination.
If answered Yes, please provide the following information: •
Employer Tax ID# 45- (.coo 7qq Tax Year End
List all other qualified retirement plans offered by City of Seal Beach (e.g. PERS, STRS)
Name of Qualified Plan Defined Benefit or Defined Contribution
PERS Defined Benefit
21
NB 1.664952.7
• •
AMENDMENT
TO
THE CITY OF SEAL BEACH
PARS ALTERNATE RETIREMENT SYSTEM
WHEREAS, City of Seal Beach (the "Agency") has previously adopted the City of
Seal Beach PARS Alternate Retirement System (the "Plan"); and
WHEREAS, the Agency has the right to amend that Plan in accordance with Section
8.3 of the Plan; and
WHEREAS, the Agency deems it to be in the best interest of the Agency and the Plan
to amend the Plan to comply with the final Regulations under Section 415 of the Internal Revenue
Code.
NOW, THEREFORE, BE IT RESOLVED, that Appendix A of the Plan is hereby
amended to comply with the final Regulations under Section 415 of the Internal Revenue Code as
follows:
1. The definition of"Section 415 Compensation" is amended as follows, effective as of January 1,
2009:
"Section 415 Compensation" shall mean a Participant's wages within the meaning of Code
Section 3401(a) and all other payments of compensation to the Participant by the Employer (in the
course of the Employer's business) for which the Employer is required to provide the Participant a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Section 415 Compensation shall
be determined without regard to any rules under Code Section 3401(a) that limit the remuneration
included in wages based on the nature or location of the employment or the services performed.
Compensation for any limitation year is the compensation actually paid or includible in gross income
during such year. Effective January 1, 1998, "Section 415 Compensation" shall include elective
deferrals as defined in Section 402(g)(3) of the Code and any amount which is contributed or deferred
by the Employer at the election of an Employee and which is not includible in the gross income of the
Employee by reason of Code Section 125, 132(0(4) or 457. "Section 415 Compensation" does not
include any amounts paid following a severance from employment, except amounts paid or includible
in gross income by the later of 2-1/2 months after a severance from employment or the end of the Plan
Year that includes the severance from employment shall be included if, absent the severance from
employment, such compensation would have been paid to the Participant while the Participant
continued in employment with the Employer, and such payments represent regular compensation for
services during the Participant's regular working hours (or compensation for services outside the
Participant's regular working hours, such as overtime or shift differential), commissions, bonuses or
similar compensation.
2. Appendix A, Section A.2 (d) shall be deleted from the Plan.
Executed this 1a day of Svc t , 2009.
City of Seal Beach
By:
Title: City Manager
NB I:649331.1
s •
AMENDED AND RESTATED AGREEMENT FOR ADMINISTRATIVE SERVICES
This Amended and Restated Agreement for Administrative Services ( "Agreement ") is made this
09 ;' day of Novembgr2009, between Phase II Systems, a corporation organized and existing
under the laws of the State of California, doing business as Public Agency Retirement Services
(hereinafter "PARS ") and City of Seal Beach ( "Agency ").
WHEREAS, the Agency adopted the City of Seal Beach PARS Alternate Retirement System
(the "Plan") effective December 1, 1993 in conjunction with the PARS Trust Agreement
( "Trust "), with PARS, as Trust Administrator to the Trust to provide administrative services on
or about November 30, 1993 ( "Initial Date ");
WHEREAS, it is necessary to amend and restate the terms of the original agreement to provide
administrative services and clarify certain terms and conditions thereof, including but not limited
to Plan Distributions, Non - Contribution Reports and Escheatment of Unclaimed Accounts;
WHEREAS, pursuant to Sections 3.4 and 3.5 of the Trust, the Agency has designated the City
Manager to act on its behalf in all matters relating to the Plan pursuant to the PARS Trust
Program ( "Plan Administrator ");
WHEREAS, pursuant to Section 3.6 of the PARS Trust Agreement, the Agency has the power to
delegate certain duties related to the Plan, and PARS accepts those duties pursuant to the terms
contained in this Agreement, and that this Agreement represents the entire delegation of duties to
PARS from the Agency with regards to the Plan;
WHEREAS, PARS accepts the terms of this Agreement with the understanding by the Agency
and Plan Administrator that PARS does not hold custody of any assets of the Plan, and does not
have any independent authority or discretion for the investment, distribution or escheatment of
Plan assets without the express consent of, and direction from, the Plan Administrator.
NOW THEREFORE, the parties agree:
1. Services. PARS will provide the services pertaining to the Plan as described in the
exhibit attached hereto as "Exhibit 1A" ( "Services ") in a timely manner, subject to the
further provisions of this Agreement.
2. Fees for Services. PARS will be compensated for performance of the Services as
described in the exhibit attached hereto as "Exhibit 1 B ".
3. Payment Terms. Payment for the Services will be remitted directly from Plan assets
unless the Agency chooses to make payment directly to PARS. In the event that the
Agency chooses to make payment directly to PARS, it shall be the responsibility of the
Agency to remit payment directly to PARS based upon an invoice prepared by PARS and
delivered to the Agency. If payment is not received by PARS within thirty (30) days of
the invoice delivery date, the balance due shall bear interest at the rate of 1.5% per
month. If payment is not received from the Agency within sixty (60) days of the invoice
delivery date, payment plus accrued interest will be remitted directly from Plan assets,
Page 1
• • •
unless PARS has previously received written communication disputing the subject
invoice that is signed by a duly authorized representative of the Agency.
4. Fees for Services Beyond Scope. Fees for services beyond those specified in this
Agreement will be billed to the Agency at the rates indicated in the PARS standard fee
schedule in effect at the time the services are provided and shall be payable as described
in Section 3 of this Agreement. Before any such services are performed, PARS will
obtain Agency authorization and provide the Agency with written notice of the subject
services, terms, and an estimate of the fees therefore.
5. Information Furnished to PARS. PARS will provide the Services contingent upon the
Agency providing PARS the information specified in the exhibit attached hereto as
"Exhibit 1C" ( "Data "). It shall be the responsibility of the Agency to certify the
accuracy, content and completeness of the Data so that PARS may rely on such
information without further audit. It shall further be the responsibility of the Agency to
deliver the Data to PARS in such a manner that allows for a reasonable amount of time
for the Services to be performed. Unless specified in Exhibit 1A, PARS shall be under
no duty to question Data received from the Agency, to compute contributions made to the
Plan, to determine or inquire whether contributions are adequate to meet and discharge
liabilities under the Plan, or to determine or inquire whether contributions made to the
Plan are in compliance with the Plan or applicable law. In addition, PARS shall not be
liable for non performance of Services if such non performance is caused by or results
from erroneous and/or late delivery of Data from the Agency. In the event that the
Agency fails to provide Data in a complete, accurate and timely manner and pursuant to
the specifications in Exhibit 1C, PARS reserves the right, notwithstanding the further
provisions of this Agreement, to terminate this Agreement upon no less than ninety (90)
days written notice to the Agency.
6. Suspension of Contributions. In the event contributions are suspended, either
temporarily or permanently, prior to the complete discharge of PARS' obligations under
this Agreement, PARS reserves the right to bill the Agency for Services under this
Agreement at the rates indicated in PARS' standard fee schedule in effect at the time the
services are provided, subject to the terms established in Section 3 of this Agreement.
Before any such services are performed, PARS will provide the Agency with written
notice of the subject services, terms, and an estimate of the fees therefore.
7. Plan Distributions. The Plan Administrator is responsible for notifying PARS of any
Participant's eligibility for a distribution, and PARS accepts the Plan Administrator's
contractual delegation of distribution processing and certain escheatment responsibilities.
PARS is entitled to rely on, and is under no duty whatsoever to audit the efficacy of the
Agency's procedures for identifying an employee's change -in- status or eligibility for a
distribution.
8. Non - Contribution Reports. PARS prepares and submits a periodic Non - Contribution
report to the Plan Administrator which includes all Participants who have received no
new contributions for a period of time, as specified by the Plan Administrator. PARS is
not obligated by law or otherwise to provide a Non - Contribution report and this report in
Page 2
` . •
no way obligates PARS to generate distributions without specific instruction from the
Agency's Plan Administrator as outlined in Section 7.
9. Escheatment of Unclaimed Accounts. PARS will administer the escheatment of
Participant accounts which are deemed unclaimed pursuant to applicable state and federal
laws, under the conditions further described in the provisions of this Agreement. It is
acknowledged by the Agency and Plan Administrator that any escheatment duties that
PARS has arise only as a result of contractual, not statutory, obligations that PARS
accepts as a delegatee of the Plan Administrator, as contained in this Agreement. For the
purposes of determining the timing of distributability under any unclaimed property law,
a Participant account becomes "payable or distributable" as of the date on which the Plan
Administrator notifies PARS, in an acceptable form of notification, of a change -in- status
together with the proper authorization to commence the distribution process.
10. Records. Throughout the duration of this Agreement, and for a period of five (5) years
after termination of this Agreement, PARS shall provide duly authorized representatives
of Agency access to all records and material relating to calculation of PARS' fees under
this Agreement. Such access shall include the right to inspect, audit and reproduce such
records and material and to verify reports furnished in compliance with the provisions of
this Agreement. All information so obtained shall be accorded confidential treatment as
provided under applicable law.
11. Confidentiality. Without the Agency's consent, PARS shall not disclose any
information relating to the Plan except to duly authorized officials of the Agency, subject
to applicable law, and to parties retained by PARS to perform specific services within
this Agreement. The Agency shall not disclose any information relating to the Plan to
individuals not employed by the Agency without the prior written consent of PARS,
except as such disclosures may be required by applicable law.
12. Independent Contractor. PARS is and at all times hereunder shall be an independent
contractor. As such, neither the Agency nor any of its officers, employees or agents shall
have the power to control the conduct of PARS, its officers, employees or agents, except
as specifically set forth and provided for herein. PARS shall pay all wages, salaries and
other amounts due its employees in connection with this Agreement and shall be
responsible for all reports and obligations respecting them, such as social security,
income tax withholding, unemployment compensation, workers' compensation and
similar matters.
13. Indemnification. PARS and Agency hereby indemnify each other and hold the other
harmless, including their respective officers, directors, employees, agents and attorneys,
from any claim, loss, demand, liability, or expense, including reasonable attorneys' fees
and costs, incurred by the other as a consequence of PARS' or Agency's, as the case may
be, acts, errors or omissions with respect to the performance of their respective duties
hereunder.
14. Compliance with Applicable Law. The Agency shall observe and comply with federal,
state and local laws in effect when this Agreement is executed, or which may come into
effect during the term of this Agreement, regarding the administration of the Plan.
Page 3
• •
PARS shall observe and comply with federal, state and local laws in effect when this
Agreement is executed, or which may come into effect during the term of this
Agreement, regarding Plan administrative services provided under this Agreement.
15. Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California. In the event any party institutes legal
proceedings to enforce or interpret this Agreement, venue and jurisdiction shall be in any
state court of competent jurisdiction.
16. Force Majeure. When a party's nonperformance hereunder was beyond the control and
not due to the fault of the party not performing, a party shall be excused from performing
its obligations under this Agreement during the time and to the extent that it is prevented
from performing by such cause, including but not limited to: any incidence of fire, flood,
acts of God, acts of terrorism or war, commandeering of material, products, plants or
facilities by the federal, state or local government, or a material act or omission by the
other party.
17. Ownership of Reports and Documents. The originals of all letters, documents, reports,
and data produced for the purposes of this Agreement shall be delivered to, and become
the property of the Agency. Copies may be made for PARS but shall not be furnished to
others without written authorization from Agency.
18. Designees. The Plan Administrator of the Agency, or their designee, shall have the
authority to act for and exercise any of the rights of the Agency as set forth in this
Agreement, subsequent to and in accordance with the written authority granted by the
Governing Body of the Agency, a copy of which writing shall be delivered to PARS.
Any officer of PARS, or his or her designees, shall have the authority to act for and
exercise any of the rights of PARS as set forth in this Agreement.
19. Notices. All notices hereunder and communications regarding the interpretation of the
terms of this Agreement, or changes thereto, shall be effected by delivery of the notices
in person or by depositing the notices in the U.S. mail, registered or certified mail, return
receipt requested, postage prepaid and addressed as follows:
(A) To PARS: PARS; 5141 California Avenue, Ste. 150; Irvine, CA 92617; Attention:
President
(B) To Agency: City of Seal Beach; 211 Eighth Street, Seal Beach, CA 90740;
Attention: City Manager
Notices shall be deemed given on the date received by the addressee.
20. Term of Agreement. This Agreement will continue unchanged for successive twelve
month periods from the date first above written, unless either party gives written notice to
the other party of the intent to terminate upon ninety (90) days written notice.
21. Amendment. This Agreement may not be amended orally, but only by a written
instrument executed by the parties hereto.
22. Entire Agreement. This Agreement, including exhibits, contains the entire
understanding of the parties with respect to the subject matter set forth in this Agreement.
Page 4
. •
In the event a conflict arises between the parties with respect to any term, condition or
provision of this Agreement, the remaining terms, conditions and provisions shall remain
in full force and legal effect. No waiver of any term or condition of this Agreement by
any party shall be construed by the other as a continuing waiver of such term or
condition.
23. Attorneys Fees. In the event any action is taken by a party hereto to enforce the terms of
this Agreement the prevailing party herein shall be entitled to receive its reasonable
attorney's fees.
24. Counterparts. This Agreement may be executed in any number of counterparts, and in
that event, each counterpart shall be deemed a complete original and be enforceable
without reference to any other counterpart.
25. Headings. Headings in this Agreement are for convenience only and shall not be used to
interpret or construe its provisions.
26. Effective Date. This Agreement shall be effective and control the obligations and duties
of the parties hereto as of the Initial Date.
AGENCY:
BY: def,2Q "®'
TITLE: City Manager
DATE: fl./0.0
PARS:
BY: .41.!
TITLE: Chief • erating Officer
DATE: Dy
Page 5
•
EXHIBIT 1A
SERVICES
PARS will provide the following services for the City of Seal Beach Plan:
1. Plan Installation Services:
(A) Meeting with appropriate Agency personnel to discuss plan provisions, implementation
timelines, benefit communication strategies, data reporting and contribution submission
requirements;
(B) Providing the necessary analysis and advisory services to finalize these elements of the
Plan;
(C) Providing the documentation needed to establish the Plan for review by Agency legal
counsel, which must be reviewed and approved by the Agency, as demonstrated by the
execution of this Agreement prior to the commencement of PARS services;
(D) Upon Agency authorization, preparing and submitting application to the Internal
Revenue Service for a determination that the Plan is qualified (the application fee for
which shall be paid by the Agency).
2. Plan Administration Services:
(A) Monitoring the receipt of Plan contributions made by the Agency to the trustee of the
PARS Trust Program ( "Trustee "), based upon information received from the Agency and
the Trustee;
(B) Performing periodic accounting of Plan assets, including the allocation of employer and
employee contributions, distributions, investment activity and expenses (if applicable) to
individual Participant ( "Participant ") accounts, based upon information received from the
Agency and/or Trustee;
(C) Acting as ongoing liaison between the Participant and the Agency in regard to
distribution payments, which shall include use by the Participants of toll -free telephone
communication to PARS;
(D) Coordinating the processing of Participant distribution payments pursuant to authorized
written Agency certification of distribution eligibility, authorized direction by the
Agency, the provisions further contained in this Agreement, and the provisions of the
Plan;
(E) Directing Trustee to make Participant distribution payments, pursuant to the Agency
authorization provisions in this Agreement, and producing required tax filings regarding
said distribution payments;
(F) Notifying the Trustee of the amount of Plan assets available for further investment and
management, or, the amount of Plan assets necessary to be liquidated in order to fund
Participant distribution payments;
(G) Coordinating actions with the Trustee as directed by the Plan Administrator within the
scope this Agreement;
Page 6
•
(H) Preparing and submitting a periodic Non - Contribution report which includes all
Participants who have received no new contributions for a period of time as specified by
the Plan Administrator, unless directed by the Agency otherwise. PARS is not obligated
by law or otherwise to provide a Non - Contribution report and this report in no way
obligates PARS to generate distributions without specific instruction from the Agency
Plan Administrator as outlined in Section 7 of this Agreement;
(I) Preparing and submitting a monthly report of Plan activity to the Agency, unless directed
by the Agency otherwise;
(J) Preparing and submitting an annual report of Plan activity to the Agency;
(K) Preparing individual annual statements and mailing in bulk to the Agency, unless directed
by the Agency otherwise;
(L) Preparing and submitting the Annual Report of Financial Transactions to the California
State Controller, as required by law, for the PARS Trust Program, including the required
certified audit of the PARS Trust.
3. Plan Compliance Services: Coordinating and preparing changes to the Trust, Plan and other
associated legal documents required by federal and state agencies to keep the plan in
compliance.
4. PARS is not licensed to provide and does not offer tax, accounting, legal, investment or
actuarial advice.
Page 7
•
• • •
EXHIBIT 1B
FEES FOR SERVICES
1. PARS will be compensated for performance of Services, as described in Exhibit 1 A based
upon the following schedule:
(A) A fee equal to the stated IRS application fees and legal fees related to any ongoing
federal and/or state required Plan compliance changes. Such fees will not be charged to
the Agency without prior authorization by the Plan Administrator.
(B) A distribution fee equal to $20.00 per terminated Participant ( "Distribution Fee "), which
shall be deducted solely from the terminating Participant's account or paid by the
Agency. Such fee will be effective January 1, 2010.
Distribution Fee Payment Option (Please select one option below):
❑ Distribution Fee shall be paid solely from the terminating Participant's account.
El Distribution Fee shall be paid by the Agency.
(C) An annual asset fee paid from Plan Assets �r paid by the Agency based on the following
schedule ( "Asset Fee "):
For Plan Assets from: Annual Rate:
$1 to $2,500,000 1.50%
$2,500,001 to $5,000,000 1.25%
$5,000,001 to $10,000,000 1.00%
$10,000,001 to $15,000,000 0.75%
$15,000,001 to $20,000,000 0.50%
$20,000,001 and above 0.30%
Annual rates are prorated and paid monthly. The annual Asset Fee shall be calculated
by the following formula [Annual Rate divided by 12 (months of the year) multiplied by
the Plan asset balance at the end of the month within each asset range]. Asset based fees
are subject to a $300.00 monthly minimum. If the Asset Fee is taken from Plan Assets,
the total Asset Fees due in a given month shall be allocated proportionately among
Participants of the Agency's Plan in that month, based on account balance. Trustee and
Investment Management Fees are not included. The monthly minimum is subject to an
automatic cost -of- living increase of 2% per year effective July 1, 2010.
Annual Asset Fee Payment Option (Please select one option below):
Q Annual Asset Fee shall be paid by the Agency.
❑ Annual Asset Fee shall be paid from Plan Assets.
(D) A fee equal to the out of pocket costs charged to PARS by an outside contractor for
formatting contribution data on to a suitable magnetic media, charged only if the
contribution data received by PARS from the Agency is not on readable magnetic
media ( "Data Processing Fee ").
•
Page 8
•
EXHIBIT 1C
DATA REQUIREMENTS
PARS will provide the Services under this Agreement contingent upon receiving the following
information:
1. Contribution Data — readable magnetic media containing the following items of employee
information related to the covered payroll period:
(A) Agency name
(B) Employee's legal name
(C) Employee's social security number
(D) Payroll date
(E) Employer contribution amount
(F) Employee contribution amount
2. Distribution Data — written Plan Administrator's (or authorized Designee's) direction to
commence distribution .processing, which contains the following items of Participant
information:
(A) Agency name
(B) Participant's legal name
(C) Participant's social security number
(D) Participant's address
(E) Participant's phone number
(F) Participant's birth date
(G) Participant's condition of eligibility
(H) Participant's effective date of eligibility
(I) Signed certification of distribution eligibility from the Plan Administrator, or authorized
• Designee
3. Executed Legal Documents:
(A) Certified Resolution
(B) Adoption Agreement
(C) Plan Document
(D) Trustee Investment Forms
4. Other information requested by PARS
Page 9
n r • •
AMENDMENT TO THE
CITY OF SEAL BEACH
PARS ALTERNATE RETIREMENT SYSTEM
WHEREAS, the City of Seal Beach (the "Employer") has previously adopted the City of
Seal Beach PARS Alternate Retirement System (the "Plan"); and
WHEREAS, the Employer has the right to amend said Plan in accordance with Section
8.3 of the Plan; and
WHEREAS, the Employer desires to amend the Plan to comply with recent legislation
and regulations applicable to the Plan.
NOW, THEREFORE, the Plan is hereby amended as follows:
1. Effective January 1, 2007, Section 6.7, "Direct Rollovers," is hereby amended in its entirety
to read as follows:
"(a) This section applies to all distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise limit a
distributee's election under this Plan, a distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct rollover. A
distributee includes an Employee or former Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are distributees with regard to the interest of the spouse or former spouse.
(b) A Beneficiary who is not the spouse of the Participant may elect a direct trustee to
trustee transfer that qualifies as an eligible rollover distribution under this Section 6.7. Such
transfer shall be made to an individual retirement plan described in Section 408(a) of the Code or
an individual retirement account that is established for the purpose of receiving the distribution
on behalf of such Beneficiary. Such individual retirement account shall be deemed an inherited
IRA pursuant to the provisions of Section 402(c)(l I) of the Code. Also, in this case, the
determination of any required minimum distribution under Section 401(a)(9) that is ineligible for
rollover shall be made in accordance with Notice 2007-7, Q&A 17 and 18, 2007-5 I.R.B. 395.
(c) Definitions
(i) Eligible Rollover Distribution
An eligible rollover distribution is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution does not include: (i) any
Page 1 of 3
distribution that is one of a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint
life expectancies) of the distributee and the distributee's designated Beneficiary, or for a specified
period of ten (10) years or more; (ii) any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code, (iii) any hardship distribution; and (iv) the portion of any
distribution that is not includible in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities). A portion of a distribution shall
not fail to be an eligible rollover distribution merely because the portion consists of after-tax
employee contributions which are not includible in gross income. However, such portion may be
transferred only to (A) an individual retirement account or annuity described in Section 408(a) or
(b) of the Code (or, on or after January 1, 2008, to a Roth IRA described in Section 408A of the
Code) or a qualified defined contribution plan described in Section 401(a) of the Code; or (B) on
or after January I, 2007, to a qualified defined benefit plan described in Section 40I(a) of the Code
or to an annuity contract described in Section 403(b) of the Code, that agrees to separately account
for amounts so transferred (and earnings thereon), including separately accounting for the portion of
the distribution that is includible in gross income and the portion of the distribution that is not so
includible.
(ii) Eligible Retirement Plan
An eligible retirement plan is an individual retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in Section 408(6) of the Code, a qualified trust
described in Section 401(a) of the Code that accepts the distributee's eligible rollover
distribution, an annuity contract described in Section 403(b) of the Code, a Roth IRA described
in Code Section 408A (but only if the distributee satisfies the requirements of Code Section
408A(c)(3)(B)), and an eligible plan under Section 457(b) of the Code which is maintained by a
state, political subdivision of a state, or any agency or instrumentality of a state or political
subdivision of a state and which agrees to separately account for amounts transferred into such
plan from this Plan. The definition of eligible retirement plan shall also apply in the case of a
distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee
under a qualified domestic relation order, as defined in Section 414(p) of the Code. With respect
to eligible rollover distributions made on or after January 1, 2008, an eligible retirement plan
shall also include a Roth IRA as described in Section 408A of the Code, provided that the
distributee is not restricted from making such a rollover from this Plan to a Roth IRA pursuant to
Section 408A(c) of the Code.
(iii) Direct Rollover
A direct rollover is a payment by the Plan to the eligible retirement plan specified by the
distributee."
Page 2 of 3
2. Effective January 1, 2010, Section 6.8, "Military Service," is hereby amended by adding the
following to the end of the section:
"In the case of a Participant who dies while performing qualified military service, the survivors
of the Participant are entitled to any additional benefits (other than benefit accruals relating to the
period of qualified military service) provided under the Plan had the Participant resumed and
then terminated employment on account of death. A Participant receiving a "differential wage
payment," as defined in Code Section 3401(h)g) shall be treated as an Employee of the
Employer, and the differential wage payment shall be treated as Section 415 Compensation."
This Amendment is hereby adopted this 15 day of. , 2011 effective as of the
dates set forth above.
CITY OF SEAL BEACH
By: `. A 2
Its: City Manager
Page 3 of 3
AMENDMENT TO THE
CITY OF SEAL BEACH
AGREEMENT FOR ADMINISTRATIVE SERVICES
PARS ALTERNATE RETIREMENT SYSTEM
The Amended and Restated Agreement for Administrative Services ("Agreement") made
the 9th day of November, 2009, between Phase II Systems, a California corporation, doing
business as Public Agency Retirement Services ("PARS") and the City of Seal Beach ("City"), is
hereby amended effective July 1, 2013, to reflect that the ongoing administration fees, currently
paid by the Agency shall be paid from Plan Assets, as follows:
1. Exhibit 1B, Fees for Services, paragraphs (B) and (C) of the Agreement for Administrative
Services, are hereby amended effective July 1, 2013, to read as follows:
(B) A distribution fee equal to $20.00 per terminated Participant ("Distribution Fee"), which
shall be deducted solely from the terminating Participant's account.
(C) An annual asset fee paid from Plan Assets based on the following schedule ("Asset
Fee"):
For Plan Assets from: Annual Rate:
$1 to $2,500,000 1.50%
$2,500,001 to $5,000,000 1.25%
$5,000,001 to $10,000,000 1.00%
$10,000,001 to $15,000,000 0.75%
$15,000,001 to $20,000,000 0.50%
$20,000,001 and above 0.30%
Annual rates are prorated and paid monthly. The annual Asset Fee shall be calculated by
the following formula [Annual Rate divided by 12 (months of the year) multiplied by the
Plan asset balance at the end of the month within each asset range]. Asset based fees are
subject to a $300.00 monthly minimum. The total Asset Fees due in a given month shall
be allocated proportionately among Participants of the Agency's Plan in that month,
based on account balance. Trustee and Investment Management Fees are not included.
The monthly minimum is subject to an automatic cost-of-living increase of 2% per year
effective July 1, 2010.
IN WITNESS WHEREOF, this Amendment is hereby adopted effective as of July 1,
2013.
CITY OF SEAL BEACH PUBLIC AGENCY RETIREMENT SERVICES
By:%l By:
Jil�_*ram,CitMa9ager fl Tod Hammeras, Chief Financial Officer
6
Dated: /f/3 Dated: /7 12 0/ 3