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TC Res. No. 1987-22~ a RESOLUTION NO. 87-22 SERIES OF 1987 A RESOLUTION OF THE TOWN OF AVON, COLORADO, AMENDING PENSION ARRANGEMENTS WITH ICMA AND ADOPTING PENSION PLANS FOR THE POLICE DEPARTMENT OF THE TOWN OF AVON WHEREAS, the Town of Avon ("employer") has police officers rendering valuable services; and WHEREAS, the Town of Avon, Colorado, and its police officers desire to restate its pension documents in order to terminate prior police pension administration arrangements which the Town has had with ICMA; and WHEREAS, the Town of Avon desires to adopt its own trust documents for the police department, as presented to the Town Council on September 22, 1987, in order to allow for increased flexibility in the selection of an administrator and of investments. NOW, THEREFORE, BE IT RESOLVED by the Town Council of the Town of Avon, Colorado, to wit: 1. The Town of Avon hereby restates its current plan with ICMA, terminating the pension administration and investment arrangements for its police department with ICMA, such termination to be effective on the date of the Resolution. 2. The Town of Avon hereby adopts new Pension Trust Documents, as presented September 22, 1987, for its police department, to be effective commencing on such date. 3. The Town of Avon adopts the following provision in its Public Safety Money Purchase Pension Plan: 1. Adoption of a trust with the committee comprised of the Public Safety Director and two elected members of the Public Safety Department, with the Town Finance Officer acting as an Ex-Officio member of the committee. • 4. The Town of Avon appoints Pension Management Associates, Inc. to furnish a restated plan document based on Colorado State Statutes applicable to Police and Fire Plans, and in accordance with present plan provisions as well as new provisions adopted by this resolution. ADOPTED THIS 22nd day of September , 1987. TOWN COUNCIL -2- TOWN OF AVON, COLORADO BY Allan R. Notting m, Mayor 0 0 TO William James, Avon Town Manager FROM Joe Olson, Assistant Avon Town Manager RE Police Department Pension Plan Change DATE September 16, 1987 The purpose of the attached Resolution, is to allow the Police Department to change the administration and investment opportunities within the current Pension Plan. ICMA is currently the administrator and consultant for investments for the Police Department Pension Plan. The Plan with ICMA allows for only one (1) type of investment opportunity for the Police Department. This investment opportunity is a fixed rate plan, that has paid approximately 7% interest over the last year and a half. While guaranteed interest situations such as this are attractive to some, the overwhelming majority of" the Police. Department employees would prefer to have a variety of investment- opportunities which are not provided by ICMA under the current plan, and which ICMA is unable to provide under ICMA guidlines to Police and Fire Plans. The Police Department has also, had a great deal,of difficulty receiving accurate and complete reports from ICMA, concerning the status of the Police Pension Plan. I will be happy to expound upon these-problems, if you so desire. As a result of the situations mentioned above, the Police Department took upon itself, to seek out other possible firms ,with which to contract the administration and investment of its pension monies. The Police Department was presented with alternatives to the current Pension Plan and, as a result, on August 20, 1987, the Police Department unanimously voted to withdraw from ICMA, and to consider other pension alternatives. The attached Resolution 85-21- Series 1985, will allow the Police Department to continue with a Money Purchase Pension Plan, and will 'allow the Police Department to consider other administrators and investment alternatives. • • TOWN OF AVON PUBLIC SAFETY DEPARTMENT MONEY PURCHASE PENSION TRUST EFFECTIVE DATE 0 TABLE OF CONTENTS I AGREEMENT ARTICLE I PURPOSE OF THE AGREEMENT ARTICLE II DUTIES AND POWERS-OF TRUSTEE 1 II.1 ESTABLISHMENT AND ACCEPTANCE OF TRUST 2, 11.2 INVESTMENT OF TRUST FUND 2 11.3 POWERS OF THE COMMITTEE 2 11.4 COMMITTEE EMPLOYMENT OF PROFESSIONALS 4 11.5 PAYMENT FROM TRUST FUND 4 II.6 PAYMENT OF TRUST EXPENSES. 4 11.7 COMMITTEE TO MAINTAIN ACCOUNTS 4 ii.-8 REIMBURSEMENT OF INVESTMENT EXPENSES 4 11.9 TRUST ASSET PERFORMANCE MONITORING 5 ARTICLE III FIDUCIARY DUTIES AND RESPONSIBILITIES- III.1 COMMITTEE TO INVEST, APPOINTMENT OF INVESTMENT MANAGER 6 111.2 INVESTMENT MANAGER 6 111.3 BANK ACCOUNTS 6 111.4 DUTIES OF FIDUCIARY 6 111.5 ROLLOVER ACCOUNTS 7 111.6 WASTING TRUST ACCOUNTS 7 111.7 BENEFIT OF FUNDS, PLAN EXPENSES 7 111.8 ALIENATION, ANTICIPATION, ENCUMBRANCE BY BENEFICIARY 7 111.9 DESIGNATION AND ELECTION OF MEMBERS OF COMMITTEE 7 SIGNATURE PAGE ARTICLE I AGREEMENT AGREEMENT made as of the 22nd day of September, 1987, between the Town of Avon, Public Safety Department (hereinafter called the "Employer"), a District organized and existing under the laws of the State of Colorado and-the Town of Avon, Public Safety Department Pension Trustees (hereinafter called the "Committee"). WITNESSETH: WHEREAS the Employer wishes to establish a Money Purchase Pension Plan for its police employees who are employed as of January 1, 1987, and for such other employees as may be designated in the Plan; and, WHEREAS the Board of Trustees of the Employer has. heretofore authorized the adoption of the Town of Avon Public Safety Department Money Purchase Pension Plan and the Trust embodied herein (hereinafter called the "Trust"); and, NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, it is agreed by and between the Employer and the Committee as follows: 1 ARTICLE II DUTIES AND POWERS OF TRUSTEE II.1 ESTABLISHMENT AND ACCEPTANCE OF TRUST The Trust shall receive any contributions paid to the Committee for the purposes of the Trust. All contributions so received, together with the income therefrom (herein called the "Trust Fund") shall be held, managed, and administered in trust pursuant to the terms of this Agreement. The Committee hereby accepts the Trust created hereunder and agrees to perform the duties under this Agreement on its part to be performed. The Committee has no obligation to collect contribu- tions. 11.2 INVESTMENT OF TRUST FUND Investment of Trust funds hereunder are governed by the provisions of Section 31-30-701 et seq. and Section 31-30-1012, C.R.S., -and to the extent authorized and permitted by statute, the Committee shall invest and reinvest the principal and income'of the Trustee Fund and keep the Trust Fund invested, without instinction between principal and income, in obligations of the United States government and in obligations fully guaranteed as to principal and interest 'by the United States government, in state and municipal bonds, in corporate notes, bonds, or debentures, convertible or otherwise, in railroad equipment trust certificates, in real property and in loans secured by first mortgages or deeds of trust on real property, in participation guarantee agreements with life insurance companies, in real estate limited partnerships,, an in other types of investment agreements, and the foregoing investments may be made without limitation as to the percentage of the book value of the assets of the retirement fund so invested. Investments may also be made in either common or preferred corporate stocks, but the aggregate amount of monies invested in corporate stocks or corporate bonds, notes, or debentures which are convertible into corporate stock, or in investment trust shares, shall not exceed fifty percent of the then book value of the assets of the fund. In no event shall any investment be made in the common or preferred stock, or both, of any single corporation in an amount in excess of five percent of the then book value of the assets of the fund nor shall more than seven percent of the outstanding stock or bonds of any single corporation be acquired for the fund. As used in Section 11.2, "Real Estate Limited Partnership" means limited partner- ships, the majority of the assets of which are invested in real property or first mortgages or deed of trust on real property and none of the assets of which are invested in second or other junior mortgages. Any trust fund investment not in compliance with Section 31-30-701 et seq. of the Colorado Revised Statutes shall meet or exceed any earning performance standards established by the FPPA and shall be audited at least bi-annually. 111.3 POWERS OF THE COMMITTEE The powers of the Committee shall include the following: 2 0 0 (a) To purchase, or subscribe for, any securities or other property, and to retain the same in Trust. (b) To sell, exchange, convey, transfer, or otherwise dispose of any securities or other property held by it, by private contract or at public auction. No person dealing with the Committee shall be bound to see to the application of the purchase money or to inquire into the validity, expediency, or propriety of any such sale or other dispositions. (c) To vote upon any stock, bonds or other securities; to give general or special proxies or powers of attorney with or without powers of substitution; to exercise any conversion privileges, subscription rights, or other options, and to make any payments incidental thereto; to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, and to delegate discretionary powers, and to pay any assessments or charges in connection therewith; and generally, to exercise any of the powers of an owner with respect to stocks, bonds, securities, options, real estate, including residential and commercial mortgages, syndi- cation partnerships both general and limited, or other property held as part of the Trust Fund. (d) To cause any securities or other property held as part of the Trust Fund to be registered in its own name or in the name of one or more of its nominees, and to hold any investments in bearer form; but the books and records of the Committee shall at all times show that all such investments are part of the Trust Fund. (e) To keep such portion of the Trust Fund in-cash or cash balance as the Committee may, from time to time, deem to be in the best interests of the Trust created thereby, without liability for interest thereon. (f) To accept and retain for such time as-it may deem advisable, any securities or other property received or acquired by it hereunder, whether or not such securities or other property would normally be purchased as investments hereunder. (g) Any instrument to be executed by the Committee. may be made, executed, acknowledged, and delivered by any two members of the Committee, and any person, firm or corporation, including any insurance company or bank, may rely upon, and shall be protected in relying upon such action with the same force and effect as though all had signed. (h) To settle, compromise, or submit to arbitration, any claims, debts, or damages due or owning to or from the Trust Fund, to or from the Trust Fund, to commence or defend suits or legal or administrative proceedings. 3 (i) To do all such acts, take all such proceedings, and exercise all such rights and-privileges, although not specifically mentioned herein, as the Committee may deem necessary to administer the Trust Fund, and to carry out the purpose of this Trust. (j) To acquire real estate by purchase, exchange, or as the result of any foreclosure, liquidation, or other salvage of any investment previously made hereunder; to hold such real estate in such manner and upon such terms as the Committee may.deem advisable; and to manage, operate, repair, develop, improve, partition, mortgage, or lease for any term or terms of years, and such real estate or any other real estate constituting a part of the Trust Fund, upon such terms and conditions as the Committee- deems proper, using other Trust assets .fo"r any of such purposes if deemed advisable. Leverage may be used when purchasing real estate. 11.4 COMMITTEE EMPLOYMENT OF PROFESSIONALS The Committee may, at the expense of the Trust fund, employ auditors, accountants, and legal and other counsel. Any such auditors, accountants, and counsel may be persons acting in a similar capacity for the Employer and may be employees of the Employer. 11.5 PAYMENT FROM TRUST FUND The Committee may, from time to time, make payments out of the Trust Fund to such persons, in such manner, in such amounts, and for such purposes as may be specified by the Committee, and upon any such payment being made, the amount thereof shall no longer constitute a part of the Trust Fund. Each such payment shall be accompanied by a certificate of the Committee that the payment is in accordance with the Plan. 11.6 PAYMENT OF TRUST EXPENSES The Committee shall be reimbursed for any reasonable expenses, including reasonable counsel fees, incurred by it in the administra- tion of the Trust Fund. Such expenses shall be paid from the Trust Fund, but until paid, shall constitute a charge upon the Trust Fund. 11.7 COMMITTEE TO MAINTAIN ACCOUNTS The Committee shall keep accurate and detailed accounts of all investments, receipts, disbursements, and other transactions here- under. All accounts, books and records relating to such transactions shall be open to inspection and audit at all reasonable times by the Employer, and any person authorized by law or by the Committee. 11.8 REIMBURSEMENT OF INVESTMENT EXPENSES At the option of the Employer, the Employer shall reimburse the Trust for any expenses paid by the Trust, including, but not limited. to, 4 management fees, administration fees, sales commission expenses, and brokerage commission expenses. 11.9 TRUST ASSET PERFORMANCE MONITORING The Committee may retain an outside firm or Plan Administrator to monitor the performance of the Trust on an, annual basis. This Performance Monitoring shall be included in the Plan Administrators Annual Report to the Committee and include at least two other comparative indexes. 5 0 0 ARTICLE III FIDUCIARY DUTIES AND RESPONSIBILITIES 111. 1 COMMITTEE TO INVEST, APPOINTMENT OF INVESTMENT MANAGER Except as provided below, the Committee respect to the investment, management an with full discretion in the exercise of and control. The Committee shall have Investment Manager with the delegated Committee to direct the investment an( assets. shall be the Fiduciary with i control of the Trust assets such investments, management the authority to appoint an duty and authority of the management of the Trustee 111.2 111.3 INVESTMENT MANAGER The term "Investment Manager" as used herein shall be construed as meaning a Fiduciary as defined in §3(38) of ERISA, which Fiduciary has fully complied with the provisions of said §3(38) of ERISA which herein is used as a guideline and has provided the Committee with written acknowledgement that it has done so and is a Fiduciary with respect to the Plan. BANK ACCOUNTS Whether or not the Committee, or an investment Manager has the responsibility for the investment and management of Trust assets the following types of investments are hereby specifically authorized: (a) The assets of the Trust Fund may consist, in whole or in part,'of deposits in a.bank or similar financial institution which is a fiduciary of the Plan, as defined in §3(21) of ERISA, if (i) such bank or financial institution is supervised by the United States of America or a State, and,_ (ii) such deposits bear a reasonable rate of interest. 111.4 b) The Committee or Investment Manager may invest in any other or future common or collective trust fund for which an Employee Benefit Trust is an eligible participant, which trust is established and maintained pursuant to the provisions of future Declarations of Trust or Trusts, as thereafter amended from time to time, and any such Declaration of Trust shall upon its establishment be deemed to be a part hereof to the same extent as if fully set forth at length herein at the time of execution. DUTIES OF FIDUCIARY It is the intent of this Document that each of the Fiduciaries under the Plan and Trust shall be solely responsible for his own acts or omissions. No Fiduciary shall have the duty to question whether any other Fiduciary is fulfilling all of the responsibilities imposed upon such other Fiduciary. No Fiduciary shall be responsible for the 6 i 0 actions of another Fiduciary with respect to this Plan and Trust unless he participates knowingly in such breach, knowingly undertakes to conceal such breach, has actual knowledge of such breach and fails to take reasonable remedial action to remedy said breach, or through his negligence in performing his own specific Fiduciary responsi- bilities which gave rise to his status-as a Fiduciary, he has enabled such other Fiduciary to committ a breach of the latter's Fiduciary responsibilities. The Fiduciary shall be'subject to the standard for investments prescribed in 15-1-304, Colorado Revised Statutes 1973, as amended. 111.5 ROLLOVER ACCOUNTS The Committee shall allow for the acceptance of rolled over distribu- tions from other retirement plans. These funds are to be fully vested and comingled with the other pooled plan assets, unless- otherwise earmarked. 111.6 WASTING TRUST ACCOUNTS The Committee shall allow a terminated or retired participant to main- tain his vested account balance in a separate segregated trust account for a period of not to exceed ten (10) years. Distributions may be made on a monthly, quarterly, annually or one lump sum basis, on or before the end of- ten (10) years. This Wasting Trust will be applicable to individual participants or the Trust in its entirety, should the Plan be terminated. 111.7 BENEFIT OF FUNDS, PLAN EXPENSES Except as provided in this section, no part of the Trust Fund shall be used for or diverted to purposes other than for the exclusive benefit of Participants, their' spouses or their Beneficiaries covered under this Plan prior to the satisfaction of all liabilities hereunder with respect to them, provided that any funds under this Plan may be used to pay reasonable Plan administrative expenses. 111.8 ALIENATION, ANTICIPATION, ENCUMBRANCE BY BENEFICIARY The rights of a Participant or Beneficiary to receive payments or benefits from the Trust Fund shall not be subject to alienation or assignment, and shall not be subject to anticipation or encumbrance or claims of creditors. A distribution to the estate of a deceased Participant or Beneficiary to an heir or legatee of a right to receive benefit or payment shall not be deemed _an alienation, assignment or anticipation for the purposes hereof. In purchasing any annuity contract for a Participant or Beneficiary, the Committee of Investment Advisor may cause to be included in such contract such form of spendthrift provision as the Committee or Investment Advisor may deem appropriate. 7 0 • 111.9 DESIGNATION AND ELECTION OF MEMBERS OF COMMITTEE The Committee shall consist of three members, two of whom are elected by a majority vote of the employees who are Trust Beneficiaries and Plan Participants. ,The third member shall be the Public Safety Director, and the Finance Director of the Employer shall serve ex-officio. Any vacancy occurring-in the elected Committee shall be filled by appointment by the Committee, and the Committee person so appointed will serve the remaining term of the Committee person replaced. The committee chairperson shall be the Public Safety Director. 8 0 • IN WITNESS WHEREOF, the Employer and the Town of Avon Public Safety Department Pension Commission (acting also as Trustees) have executed this Agreement as of the day and year first above written. TOWN OF AVON PUBLIC SAFETY DEPARTMENT By: Date: By: - Date: TTEST: Se tember 22, 1987 ' Date (SEAL) By: Date: By: Ex Officio, Date: MAYOR, TOWN OF AVON By Date: September 22./1987 9