HomeMy WebLinkAboutResolution 1998-058 RESOLUTION NO. 1998-058
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF ATASCADERO
ADOPTING AMENDMENT
TO DEFERRED COMPENSATION PLAN
WITH GREAT WESTERN BANK FUNDSELECT
WHEREAS, the City of Atascadero, Deferred Compensation Board heretofore
established a Deferred Compensation Plan(the "Plan"); and
WHEREAS, the City of Atascadero, Deferred Compensation Board desires to amend the
Plan to conform with changes in the federal law brought about by the Small Business Job
Protection Act of 1996 (the "Act") requiring that, within the time prescribed by such Act,
eligible deferred compensation plans established and maintained by governmental employers be
amended to provide that all assets of the plan be held in trust, or under one or more appropriate
annuity contracts or custodial accounts, for the exclusive benefit of plan participants and their
beneficiaries; and
WHEREAS, it is also the desire of the City of Atascadero, Deferred Compensation Board
to amend the Plan in order to provide employees with certain other advantages brought about by
the Act, including indexed limitation of deferred amounts and certain elections with respect to
the commencement of distributions under the Plan.
NOW THEREFORE, BE IT RESOLVED, that, the following amendment to the Section
457 Plan of the City of Atascadero, is hereby adopted, effective December 8, 1998, to
incorporate the provisions of Small Business Job Protection Act of 1996.
Section 3.6 of the Plan is hereby amended to read:
"Custodian/Trustee" means a bank, trust company, financial institution, or other legally
authorized entity appointed by the Employer to have custody of assets in the Investment Fund.
Section 4.4 is hereby amended to read:
The City of Atascadero shall invest the Participant's deferrals in accordance with such
selection.
Section 5.3(a), "Annual limitation" is hereby amended to read:
Except as provided in Paragraph (b) below the maximum amount that a Participant may
defer during any Employment Period, when added to the amount of any Employer
Contribution for such Participant during the Employment Period, shall not exceed the
lesser of $7,500 (or as may be adjusted for cost-of-living by the Secretary of the
Treasury) or 33a%of the Participant's Includible Compensation.
City of Atascadero
Resolution No. 1998-058
Page 2 of 5
Section 6 "Investment Fund", shall be amended to read as follows:
6.1 Investment Fund. The Employer shall establish an Investment Fund for the
purpose of investing amounts of Deferred Compensation and Employer
Contributions, if any, credited to Participant Accounts. Such Participants
Accounts shall at all times be held by the Custodian/Trustee for the exclusive
benefit of the Participant or Beneficiary. The Employer may cause funds deferred
under this Plan to be commingled for investment only with funds deferred under
the City of Atascadero deferred compensation plan, so long as the investment
directives under such Plan are substantially similar to the investment directives
under this Plan and so long as adequate records are maintained to enable the
identification of the portion of such funds and earnings that pertain to each Plan.
6.2 Custodial Trust Provisions
(a) Custodian/Trustees. The Custodian/Trustees shall be, at any time, the duly
appointed and authorized City Manager. Resignation, removal and appointment
of such Custodian/Trustees, as well as compensation and expense reimbursement
of the Custodian/Trustees shall be in accordance with the guidelines for
resignation, removal, appointment, compensation and expenses of the City
Manager of the City of Atascadero.
(b) The Custodian/Trustees or the Employer shall adopt various investment options
for the investment of deferred amounts by Participants or their Beneficiaries, and
shall monitor and evaluate the appropriateness of continued offering by the Plan.
The Custodian/Trustees or the Employer may de-select options that are
determined to be no longer appropriate for offering. In adopting or de-selecting
such options, the Custodian/Trustees or the Employer shall be governed by
applicable State law. Following such adoption or de-selection of investment
options by the Custodian/Trustees or Employer, the Participants or their
Beneficiaries shall be entitled to select from among the available options for
investment of their deferred amounts. In the event options are de-selected, the
Custodian/Trustees or Employer may require Participants to move balances to an
alternative option offered by the Plan.
If Participants fail to act in response to the written notice, the Custodian/Trustee
or Employer shall transfer monies out of the de-selected option to an alternative
option chosen by the Custodian/Trustee or Employer. By exercising such right to
select investment options or by failing to respond to notice to transfer from a de-
selected option where the Custodian/Trustee or the Employer move the monies on
behalf of such Participants, the Participants and their Beneficiaries agree that none
of the Plan fiduciaries will be liable for any investment losses, or lost investment
opportunity in situations where monies are moved by Custodian/Trustees or the
Employer, which may be experienced by a Participant or Beneficiary in the
City of Atascadero
Resolution No. 1998-058
Page 3 of 5
investment option(s) they select or an alternative option selected for them if they
fail to take appropriate action in regard to the de-selected fund.
(c) Designation of Fiduciaries. The Employer and Custodian/Trustees and the
persons they designate to carry out or help carry out their duties or responsibilities
are fiduciaries under the Plan. Each fiduciary has only those duties or
responsibilities specifically assigned to him under the Plan or delegated to him by
another fiduciary. Each fiduciary may assume that any direction, information or
action of another fiduciary is proper and need not inquire into the propriety of any
such action, direction or information. Except as provided by law, no fiduciary
will be responsible for the malfeasance, misfeasance or nonfeasance of any other
fiduciary.
(d) Fiduciary Standards.
(i) The Custodian Trustees and all other fiduciaries shall discharge their
duties with respect to this Plan solely in the interest of the Participants and
Beneficiaries of the Plan. Such duties shall be discharged for the exclusive
purpose of providing benefits to the Participants and Beneficiaries and to defray
expenses of the Plan.
(ii) All fiduciaries shall discharge their duties with the care, skill, prudence
and diligence under the circumstances then prevailing that a prudent person acting
in a like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, and as defined by applicable
State law.
(e) Custodian/Trustees' Powers and Duties. The Custodian/Trustees' powers and
duties shall be those defined under applicable State law.
(f) This Plan and Investment Fund is intended to be exempt from taxation under
Section 501(a) of the Internal Revenue Code ("Code") and intended to comply
with Section 457(g) of such code.
6.3 Investment Options. Each participant may allocate his Deferred Compensation
and Employer Contributions, if any, among the investment options, if any,
provided under the Plan. A Participant may change his investment options in
accordance with rules established by the Employer. Such modification may effect
transfers of Compensation already deferred and any Employer Contributions that
may have already been made from one investment option to another and/or may
prospectively change the investments to which future deferrals of Compensation
and Employer Contributions, if any, shall be allocated, effective as soon as
practicable after the Participant makes the change.
6.4 Account. The Employer shall maintain an Account for each Participant to which
shall be credited any Employer Contributions made for such Participant and such
City of Atascadero
Resolution No. 1998-058
Page 4 of 5
Participant's Deferred Compensation at such times as it would have been payable
but for the terms of this Participation Agreement. Each Participant's Account
shall be revalued at least quarterly to reflect the earnings, gains and losses
creditable thereto or debitable therefrom in accordance with the performance of
the investment options selected by the Participant pursuant to Subsection 4.4, 6.2,
and 6.3. The earnings, gains and losses or charges creditable to or debitable from
an Account shall mean the actual earnings, gains and losses of each investment
option, on a pro rata basis among the Accounts of those Participants who selected
that investment option.
Section 7.1 "Payments on Separation from Service" is hereby amended to read:
Subject to the provision of Subsection 7.5, upon a Participant's separation from
service with the Employer for any reason (including Disability), the entire amount
credited to his Account (less any federal, state or local income tax required to be
withheld therefrom) shall be paid to him in a single lump sum immediately after
the expiration of the Election Period; provided, however, that during such
Election Period a Participant (including a Participant who has utilized the catch-
up deferral provisions of Subsection 5.3(b) with an Account balance in excess of
an amount specified by the City of Atascadero, which amount shall not exceed the
amount specified in Section 457(e)(9)(A) of the Code, as the same may be
adjusted from time-to-time, may irrevocable elect in writing (on a form acceptable
to the City of Atascadero) a specific later date for first receiving payment under
the Plan. In addition, a Participant may elect a different method of payment as
provided in Subsection 7.2 by filing the appropriate form with the Employer no
later than ninety days prior to the Participant's elected payment date. The
Account balance of a Participant with less than the amount specified by the City
of Atascadero in his Account at the time of his separation from service shall be
paid in a single lump sum to the Participant (less applicable taxes) as soon as
practicable following his separation from service.
A Participant who has elected a specific later date for first receiving a payment
under the Plan, as set forth above, may elect to further defer the date upon which
such payment(s) will begin. Such election to further defer payment may be made
only once, to a later date, as long as payments have not yet begun when such
election is made.
New Section 7.7 is hereby added,to read as follows:
7.7 De Minimis Distributions. Notwithstanding any other provision of the
Plan, if the Participant has not deferred any amount for a 2-year period and
the total amount of the Participant's Account under the Plan does not
exceed $3500, a Participant may elect to receive, or the Plan may elect to
distribute without the Participant's consent, the entire value of the
City of Atascadero
Resolution No. 1998-058
Page 5 of 5
Participant's Account in a lump sum distribution. No subsequent
distribution under this provision to such Participant may be made, once
such distribution occurs.
Section 9.2 is hereby deleted.
On motion by Council Member Luna and seconded by Council Member Clay, the
foregoing resolution is hereby adopted in its entirety by the following roll-call vote:
AYES: Council Members Arrambide, Clay, Lerno, Luna and Mayor Johnson
NOES: None
ABSENT: None
ADOPTED: December 8, 1998
CITY OF CA O, CA
Ra Johns n, ayor
ATTEST:
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Marcia McClure Torgerson, CitV Clerk
APPROVED AS TO FORM:
&q,a, �"Z��-
Roy AUlanley, City A rney
I. Amended Exhibit A
The Administrative Agreement with Great Western Bank and any Exhibit A thereto is
hereby.amended effective the Th day of December , 1 698 as follows:
A. Exhibit A and/or any successor amendment(s) are hereby deleted and
replaced in their entirety by this Amended Exhibit A which incorporates by
reference those investment options contained on the FundSelect'"Core
List" attached hereto as Item II or any FundSelect®"Extended List", if so
applicable, as the Mly investment options available under the deferred
compensation plan as of the effective date listed above.
B. Employer agrees that FundSelect®Advisers, Inc., ("FundSelect®") may
unilaterally add new investment options to the plan quarterly and/or
replace existing investment options annually or on such other frequency
as agreed to in writing by Employer and FundSelect®.
C. Employer agrees to be bound by the terms of the "Procedures for
Removing Investment Options" attached hereto as Item III.
D. Employer agrees the effective date for offering the investment options
outlined on the FundSelect®"Core List"will be the first day of the month at
least one month subsequent to the month the Amended Exhibit A is
executed.
E. Employer agrees to restrict the total investment options of the plan to not
exceed those provided on the FundSelect®"Core List", or the total of
such other investment options which Employer and FundSelect® mutually
agree to substitute and/or add to those provided on the FundSelect®"Core
List".
Employer: city of Atascadero Great Western Bank:
By: L L By:
Employer#: 168 Date:
Date: 1/14/99
11. FundSelect® "Core List" of Investment Options
asst Cla—ss77 Cate o 0—b
jecdve/Stvie Fund Compiled from 1.3147 data
CORE OPTIONS Recommended Morningstar op 10%of 3 Y 30 Largest
"Core List" "500 Ust" pategory Rotor Funds
Fixed Income/Cash X FDIC Insured Liquid Savings Great Western Bank Liquid Savings
X FDIC Insured Certificates of Deposit Great Western Bank-3 Year CD
X FDIC Insured Certificates of Deposit Great Western Bank-5 Year CD
X Stable Value Stable Value Fund FundSelect(M Stable Value Fund
Bonds X Intermediate Corp High Quality Vanguard Bond Index Total Bond Morkei X X
X Intermediate Corp General Bond Fund of America X X
X Intermediate Corp High Yield Kemper High Yield A X X
Large Cap X Domestic Hybrid Asset Allocation Income Fund of America X X X
Stocks X Large Cap Value Equity Income Fidelity Equity Income X X X
X Large Cap Value Growth b Income Kemper-Dreman High Return Equity A X X
X Large Cap Value Growth b Income Washington Mutual Investors X X X X
X Large Cap/Blend Growth b Income Vanguard institutional Index(S&P 500) X X X
X Large Cap Blend Growth b Income Investment Company of America X X X
X Large Cap Blend Growth Fidelity Contrafund X X X
X Large Cap Blend Growth Janus X X
X Large Cap Growth Growth Growth Fund of America X X X
X Large Cap Growth Isocially Conscious Dreyfus Third Century X
X Large Cap Growth Aggressive Growth American Centur -20th Century Ultra X X X
Cap X Mid Cap Blend Growth Neuberger It Berman Partners Trust X X
ks X Mid Cap Value Growth b Income Franklin Mutual Beacon 1 X X
X Mid Cap Blend Growth PBHG Growth X X
Small Cap I X Ismail Cap Blend 'Small Company DFA US 9-10 Small Company X
Stocks F X ISmall Cap Growth Aggressive Growth Kaufmann X X
International X World Stock World Stock Janus Worldwida X X X
Stocks X foreign Stock Foreign Stock Templeton Foreign i X X X
X Foreign Stock Foreign Stock EuroPacific Growth X I X X X
Employer Name: City of Atascadero
Employer# 168
Accepted By Employer Dater
Accepted By FundSelect® Date:
n�aa ssi
Exhibit B
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Deferred Compensation Plan
Administration Agreement
Effective December 8 1998 this Exhibit becomes part of the Deferred Compensation
Plan Administration Agreement between Great Western Bank("Great Western Bank',and
the City of Atascadero ,(the"Agency")
and is designed to memorialize the following additional terms that will apply to the provision of
investment management and administrative services in connection with the Plan's investment in the
FundSelect®Stable Value Fund("The SVF").
1. Great Western(through its subcontractor,National Deferred Compensation,Inc.,
("NDC")and its affiliate broker-dealer,FundSelect®Advisers,Inc.,("FSA"),as appropriate),will
provide the Basic Services described in such Deferred Compensation Plan Administration Agreement
("the Agreement') in connection with the Plan's investment in the SVF for the fees described in
Paragraph 2 below.
2. For performing Basic Services in connection with the Plan's overall Administration,
NDC will assess the fees described as follows. Pursuant to a separate agreement,Norwest Bank
Minnesota,N.A. ("Norwest")provides investment management, custody,and other ancillary services to
the SVF and charges a fee therefor(the"Norwest Management and Services Fee"),and NDC provides
valuation of participant investments in the SVF for which it charges a separate SVF Valuation Fee.
These SVF fees are described in Paragraph 3 herein. The aggregate of the Norwest Management and
Services Fee,the NDC SVF Valuation Fee,and the Great Western Plan Administration Fee paid each
month is referred to herein as the"Total Monthly Fee". Such Total Monthly Fee will be included daily
in the unit value calculation of the participant's value in the SVF, and will not be reflected as a charge
against the account.
3. The Total Monthly Fee will be the Norwest Management and Services Fee and the NDC
SVF Valuation Fee and the Great Western Plan Administration Fee which will be calculated as set out
below:
a.. Norwest's Management and Services Fee will be
L .15%annually,based upon the first$100 Million of average monthly net
assets invested in the SVF and,
ii. .10%annually based upon the next$300 Million of average monthly net
assets invested in the SVF,
iii. .05%annually,based upon the balance of the average monthly net assets
invested in the SVF.
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b. NDC's SVF Valuation Fee and Great Western Plan Administration Fee when
combined, shall be the difference between the Norwest Management and Services Fee set forth in
Paragraph 3.a. above and 0.59%which represents the total fee on an annualized basis.
4. If the Agency directs Great Western to make a complete lump sum liquidation of all such
Agency's Plan assets invested in the SVF,Norwest shall make such lump sum liquidation within 30
days after written notice from Great Western,through NDC,as long as the assets of such Plan do not
exceed$15 Million,and Norwest is not delaying payments to all fund holders as provided under
regulations of the U.S. Office of the Comptroller of the Currency. In the event such liquidation request
exceeds$15 Million,Norwest retains the right to delay, for up to 12 months following such notice,the
lump sum liquidation.
5. As named fiduciary of the Plan,the Agency hereby appoints Norwest as a trustee with respect to
assets invested in the SVF. The Agency hereby amends the plan to incorporate by reference the
Declaration of Trust establishing Norwest Bank Collective Investment Funds for the Agency's
Employee Benefit Plans,if such incorporation language does not currently exist allowing bank collective
investment funds generally.
6. So long as Plan assets are invested in the SVF,the Employer represents that the Plan is qualified
under Section 401(a)or 457 of the Internal Revenue Code of 1986, as amended.
Agency: Great Western Bank:
Signature: C � `4w Signature:
Print Name: Wade G. McKinn y Title:
Title: City Manager Date:
Agency#: 168
Agency Address:
6500 Palma Avenue
Atascadero, CA 93422
Phone#: (805) 461-5010
Date: 1/14/99
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