TC Res. No. 2002-13RESOLUTION NO. 02-13
SERIES OF 2002
A RESOLUTION ADOPTING A RESTATED AND AMENDED' PLAN DOCUMENT FOR THE
TOWN OF AVON POLICE EMPLOYEES MONEY PURCHASE PENSION PLAN
WHEREAS, the Town of Avon maintains a defined contribution retirement plan for certain
eligible employees, called the Town of Avon Police Employees Money Purchase Pension Plan ("the
Plan"); and
WHEREAS, the Town of Avon wishes to restate the Plan to include various changes
required or permitted by applicable tax laws;
NOW, THEREFORE, -BE:IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF
AVON, COLORADO:
Section 1. That the Plan is restated in the form of the attached document.
Section 2. That the Finance Director, as Chairperson of the Board of. Retirement, is
hereby authorized to execute the Plan.
ADOPTED this 26th day of February, 2002.
TOWN OF AVON, COLORADO
c i Judy . o e Mayor
Kris Nash, Town Clerk
TOWN OF AVON POLICE OFFICERS
MONEY PURCHASE PENSION PLAN
Restated to Include Amendments
Through December 31, 2001
TOWN OF AVON. POLICE OFFICERS
MONEY PURCHASE PENSION PLAN
Table of Contents
Page
ARTICLE I
Definitions
1.1 General I-1
1.2 After-Tax Contribution I-1
1.3 Beneficiary
1.4 Board of Retirement ("Board") I-1
1.5 Break in Service I-1
1.6 Code ..........................................................................................................I-1
1.7 Compensation I-1
1.8 Defined Contribution Plan I-2
1.9 Disability I-2
1.10 Employee I-2
1.11 Employer I-2
1.12 Entry Date I-2
1.13 Forfeiture I-3
1.14 Fund ..........................................................................................................1-3
1.15 Hour of Service I-3
1.16 Life Expectancy I-4
1.17 Limitation Year I-4
1.18 Mandatory Employee Pre-Tax Contributions I-4
1.19 Normal Retirement Age I-5
1.20 Participant .................................................................................................I-5
1.21 Plan I-5
1.22 Plan Administrator I-5
1.23 Plan Year I-5
1.24 Qualified Deferred Compensation Plan I-5
1.25 Restatement Date I-5
1.26 Rollover Contribution I-5
1.27 Spouse (Surviving Spouse) I-5
1.28 Trustee I-6
1.29 Valuation Date I-6
1.30 Voluntary After-Tax Contribution I-6
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Page
1.31 Year of Service I-6
ARTICLE II
Eligibility Requirements
2.1 Participation .............................................................................................II=1
2.2 Employment Rights I1-1
23 Change in Classification of Employment ................................................II-1
ARTICLE III
Employer Contributions
3.1.
Matching Employer Contributions .........................................................III-1
3.2
rINTENTIONALLY LEFT BLANK]
....................................................III-1
3.3
Transfer Contributions ............................................................................III-1
3.4
Expenses and Fees ..................................................................................III-1
3.5
Responsibility for Contribution ..............................................................III-1
3.6
Return of Contributions ..........................................................................III-2
3.7
Military Service ......................................................................................III-2
ARTICLE IV
Employee Contributions
4.1 Mandatory Employee Pre-Tax Contributions IV-1
4.2 Voluntary Employee Contributions IV-1
4.3 Rollover Contribution IV-1
ARTICLE V
Participant Accounts
5.1 Separate Accounts V-1
5.2 Adjustments To Participant Accounts V-1
5.3 Participant Statements V-2
ARTICLE VI
Eligibility For Benefits
6.1 Retirement VI-1
6.2 Disability VI-1
6.3 Death VI-1
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Page
6.4 Termination of Employment Before Retirement,
Disability or Death VI-2
6.5 Claims Procedures VI-2
6.6 Disposition of Unclaimed Payments VI-3
ARTICLE VII
Payments
7.1
Commencement of Payments
VII-1
7.2
Method of Payment
VII-1
7.3
De minimis Accounts
VII-2
7.4
Minimum Distributions
VII-2
7.5
Direct Rollover
VII-2
7.6
In-Service Withdrawals
VII-4
ARTICLE VIII
Vesting
8.1
Employee Contributions
VIII-1
8.2
Employer Contributions
VIII-1
8.3 '
Years 'of Service Upon Rehire
VIII-2
8.4
Calculating Vested Interest
VIII-2
8.5
When Forfeiture Occurs
VIII-2
8.6
Reallocation of Forfeiture
VIII-2
8.7
Amendment of Vesting Schedule
VIII-3
ARTICLE IX
Limitations on Allocations
9.1 Maximum Limits on Allocations IX-1
9.2 Disposition of Excess Annual Additions IX-2
9.3 Participation in This Plan and a Defined.Benefit Plan (Not Effective
for Plan Years Beginning on or After January 1, 2000) IX-3
ARTICLE X
Administration
10.1 Employer .................................................................................................X-1
10.2 Plan Administrator ..........................................................................:........X-1
10.3 Trustee ............................................................................................:........X-2
10.4 Administrative Fees and Expenses ..........................................................X-3
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Page.
10.5 Governing Law ........................................................................................X-3
10.6 Election and/or Appointment of Employee Board Members ..................X-3
10.7 Written Communication ..........................................................................X-3
ARTICLE XI
Trust Fund
11.1 The Fund XI-1
11.2 Control of Plan Assets XI-1
11.3 Exclusive Benefit Rules XI-1
11.4 Assignment and Alienation of Benefits XI-1
11.5 Trust Agreement XI-1
ARTICLE XII
Participant Loans
12.1 Application .:.........................................................................................XII-1
12.2
Maximum Amount
XII-1
12.3
Application Forms
XII-1
12.4
Interest on Loans
XII-1
12.5
Security
XII-1
12.6
Terms of Repayment
XII-1
12.7
Principal and Interest Allocation
XII-2
12.8
Deemed Distribution of Loan Upon Default
XII-2
12.9
Approval of Application
XII-2
12.10
Loan Policy
XII-2
ARTICLE XIII
Insurance Policies
13.1 Limitations XIII-1
13.2. Administrative Requirements ..............................................................XIII-1
ARTICLE XIV
Amendment and Termination
14.1 Amendments XIV-1
14.2 Termination XIV-1
14.3 Qualification of Employer's Plan XIV-2
14.4 Mergers and Consolidations
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TOWN OF AVON POLICE OFFICERS
MONEY PURCHASE PENSION PLAN
The Town of Avon, hereby amends and restates in its entirety its
Police Officers Money Purchase Pension Plan for the exclusive benefit of certain
employees and their beneficiaries under the following terms and conditions:
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ARTICLE I
DEFINITIONS
1.1 General. The rights of a Participant who terminates
Employment shall be covered by the Plan as in effect at the time of such
termination of Employment.
1.2 After-Tax Contribution. An Employee contribution to the
Plan that is not made as a pre-tax "pick up" contribution under section 414(h)(2) of
the Code.
1.3 Beneficiary. The individual designated by the Participant,
according to section 63(c), to receive distribution of the Participant's Account
upon death.
1.4 Board of Retirement ("Board"). The Board of Retirement
appointed,, in accordance with all applicable statutes or ordinances, to oversee the
Plan's operations. The Board consists of five in three employees elected
by the Participants, one appointee of the Town Manager, and the Finance Director
or his or her designee.
1.5 Break in Service. A Plan Year during which an Employee
fails to complete more than 500 Hours of Service.
1.6 Code. The Internal Revenue Code as amended from time to
time and the regulations and rulings in effect thereunder.
1.7 Compensation. The total wages or salary, and any other
taxable remuneration earned while a Participant from the Employer during the
Plan Year, as reported on Form W-2, plus employer contributions made through a
salary reduction agreement described in sections 125, 401, 403, 414(h) or 457 of
the Internal Revenue Code of 1986, but excluding overtime (hours in excess of 40.
per week paid at either straight-time or at time-and-one-half), compensatory time, .
bonuses, commissions, volunteer pay, pay for occasional and sporadic work,
allowances, on-call pay, shift differential pay, life insurance coverage over
$50,000, wellness benefits, and severance payments. Wages and salary shall
include lump-sum pay for merit increases, vacation sell-back, and regular pay for
compensated absences such as vacations, holidays, sick leave, personal leave and
paid-time-off. Effective for Plan Years beginning on or after January 1, 1996,
Compensation for any Plan Year will be limited to the first $150,000 of
Compensation, subject to adjustment as provided in Code section 401(a)(17)). The
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limits of Code section 401(a)(17) shall not apply to a Participant who first became
a Participant in the Plan before January 1, 1996.
Effective January 1, 1997, the family member aggregation
rules set forth in Code Section 414(q) shall not apply.
Effective for Plan Years beginning on or after January 1,
2002, Compensation shall not exceed $200,000, subject to adjustment as provided
in Code section 401(a)(17)(B).
1.8 Defined Contribution Plan. A Plan under which individual
accounts are maintained for each Participant to which all contributions, forfeitures,
investment income and gains or losses, and expenses are credited or deducted. A
Participant's benefit under such Plan is based solely on the fair market value of his
or her account balance.
1.9 Disability. Disability shall be determined according to
criteria established by the State of Colorado Fire and Police Pension Association
(hereinafter referred to as FPPA).
1.10 Employee. Employee shall mean any individual employed as
a regular full-time, paid, sworn police officer of the Town of Avon. Effective
September 22, 1987, included are "leased employees" as defined in this section
1.10. The term "leased employee" means any person (a) who is not an Employee
of the Employer, and (b) who pursuant to an agreement between the Employer and
any other person (a "leasing organization") has performed services for the
Employer on a substantially full-time basis for a period of at least one (1) year, as
such services are performed under primary direction or control by the Employer.
Notwithstanding the foregoing, if "leased employees" constitute less than twenty
percent (20%) of the Employer's nonhighly compensated workforce within the
meaning of Code Section 414(n)(5), a person who is covered by a money purchase
pension plan maintained by the leasing organization which provides a non-
integrated employer contribution rate of at least ten percent (10%) of
compensation, immediate participation, and full vesting shall not be, considered a
"leased employee."
1.11 Employer. The Town of Avon, Colorado and any entity that
succeeds the Employer and adopts this Plan.
1.12 Entry Date. The date on which an Employee begins
employment as an Employee and first performs an Hour of Service for the
Employer.
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1. 13 Forfeiture. The portion of a Participant's Account which,
according to Article VIII, the Participant is not entitled to receive.
1.14 Fund. All contributions received by the Trustee under this
Plan and Trust, investments thereof and earnings and appreciation thereon.
1.15 Hour of Service.
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These hours shall be
credited to the Employee for the computation period in which the duties are
performed; and
(b) Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during which no duties
are performed due to vacation, holiday, illness, paid time off (effective January 1,
2002), incapacity (including Disability), jury duty, military duty or leave of
absence, but excluding leave hours accrued by the Employee which are paid to the
Employee upon separation from employment. No more than 501 Hours of Service
shall be credited under this paragraph for any single continuous period (whether or
not such period occurs in a single computation period); and
(c) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the Employer. The same
Hours of Service shall not be credited both under paragraph (a) or paragraph (b),
as the case may be, and under this paragraph (c). These hours shall be credited to
the Employee for the computation period or periods to which the award or
agreement pertains rather than the computation period in which the award,
agreement or payment is made.
(d) Hours of Service shall be credited for employment
with the Employer and with other members of an affiliated service group (as
defined in section 414(m) of the Code) and any other entity required to be
aggregated with the Employer pursuant to section 414(0) and the regulations
thereunder. Hours of Service shall also be credited for any individual considered
an Employee for purposes of this Plan under section 414(n) or section 414(o) and
the regulations thereunder.
(e) Solely for purposes of determining whether a Break in
Service, as defined in paragraph 1.5, for participation and vesting purposes has
occurred in a computation period, an individual who is absent from work for
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maternity or paternity reasons shall receive credit for the Hours of Service which
would otherwise have been credited to such individual but for such absence, or in
any case in which such hours cannot be determined, eight Hours of Service per day
of such absence. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence by reason of the pregnancy of the
individual, by reason of a birth of a child of the individual, by reason of the
placement of a child with the individual in connection with the adoption of such
child by such,individual, or for purposes of caring for such child for a period .
beginning immediately following such birth or placement. The Hours of Service
credited under this paragraph shall be credited in the computation period in which
the absence begins if the crediting is necessary to prevent a Break in Service in
that period, or in all other cases, in the following computation period. No more
than 501 hours will be credited under this paragraph.
(f) Hours of Service shall be on the basis of actual hours
for which an Employee is paid or entitled to payment.
1.16 Life Expectancy. Life Expectancy and Joint and Last
Survivor Expectancy are computed by use of the expected return multiples in
Tables V and VI of section 1.72-9 of the Income Tax Regulations, using the
attained age of the Participant (or designated beneficiary) as of the Participant's (or
designated beneficiary's) birthday in the applicable calendar year reduced by one
for each calendar year which has elapsed since the date life expectancy was first
calculated. The applicable calendar year shall be the first distribution calendar
year, and if life expectancy is being recalculated such succeeding calendar year. If
distribution is in the form of an immediate annuity, purchased after the
Participant's death with the Participant's remaining interest, the applicable calendar
year is the year of purchase. If life expectancy is being recalculated, the applicable
life expectancy shall be the life expectancy as so recalculated. Unless otherwise
elected by the Participant by the time distributions are required to begin, Life
Expectancies shall be recalculated annually. Such election shall be irrevocable as
to the Participant and shall apply to all subsequent years. The Life Expectancy of
a nonspouse beneficiary may not be recalculated.
1.17 Limitation Year. The calendar year or such other 12
consecutive month period designated by the Employer for purposes of determining
the maximum annual addition to a Participant's account.
1.18 Mandatory Employee Pre-Tax Contributions. Required
Employee contributions made to the Plan on behalf of the Participant, which are
treated as Employer contributions pursuant to section 414(h)(2) of the Code in lieu
of cash compensation.
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1. 19 Normal Retirement Age. The date on which a Participant has
reached his 55th birthday.
1.20 Participant. Any Employee who has met the eligibility
requirements and is participating in the Plan. Effective September 22, 1987,
excluded are "leased employees," as defined in Section 1. 10, Article I of the Plan.
Any individual who agrees with the Employer that the individual's services are to
be performed as a "leased employee" or an independent contractor will not be a
Participant regardless of any classification of such individual as a common-law
employee by the Internal Revenue Service, the Department of Labor or any court
of competent jurisdiction.
1.21 Plan. The Town of Avon Police Officers Money Purchase
Pension Plan described by the provisions in this document.
1.22 Plan Administrator. The Board of Retirement.
1.23 Plan Year. Each 12 consecutive month period commencing
on January 1, and ending on December 31.
1.24 Qualified Deferred Compensation Plan. Any pension, profit
sharing or other plan which meets the requirements of section 401 of the Code
which includes a trust exempt from tax under section 501(a) of the Code and any
annuity plan described in section 403(a) of the Code.
1.25 Restatement Date. September 22, 1987, except as otherwise
indicated in the document. The Plan was originally effective September 22, 1987,
amended and restated October 1, 1990, and was amended in its entirety, on
February 26, 2002, to include amendments through December 319 2001.
September 22, 1987, except as otherwise indicated in the document.
. 1.26 Rollover Contribution. A contribution made by a Participant
of an amount distributed to such Participant from another Qualified Deferred
Compensation Plan in accordance with section 4.3.
1.27 Souse (Surviving Spouse). The spouse or surviving spouse
of the Participant, provided that a former spouse will be treated as the spouse or
surviving spouse and a current spouse will not be treated as the spouse or surviving
spouse to the extent provided under a qualified domestic relations order as
permitted by Colorado Statutes.
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1.28 Trustee. Wells Fargo Bank .West, N.A.
1.29 Valuation Date. The last day of the Plan Year and the
following date(s) on which Participant accounts are revalued in accordance with
Article V: March 31, June 30, and September 30. Effective July 1, 1998,
Participant accounts are revalued in accordance with Article V on each business
day of the Plan Year during which Plan assets for which there is an established
market are valued and the Trustee is conducting business.
1.30 Voluntary After-Tax Contribution. An Employee After-Tax
Contribution which is not tax deductible and which is not required as a condition
for participation in the Plan.
1.31 Year of Service. A Plan Year during which an Employee has
not less than 1,000 Hours of Service, including periods prior to the September 22,
1987 original Plan effective date. Hours of Service as an employee with the
Eagle-Vail Metropolitan District from January 1, 1980 through October 1, 1987
shall also be included in determining a Participant's Years of Service.
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ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 Participation. An Employee shall become a Participant in the
Plan on the first day of employment as an Employee. Participants in the Plan that
was in effect on September 30, 1990 shall become Participants in this restated Plan
on October 1, .1990: An Employee who satisfied the eligibility requirements and
subsequently terminated employment shall become a Participant immediately upon
returning to the employ of the Employer.
2.2 Employment Rights. Participation in the Plan shall not confer
upon a Participant any employment rights, nor shall it interfere with the
Employer's right to terminate the employment of any Employee at any time.
2.3 Change in Classification of Employment. In the event a
Participant becomes ineligible to participate because he or she is no longer a
member of an eligible class of Employees, such Employee shall participate
immediately upon his or her return to an eligible class of Employees.
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ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 Matching Employer Contributions. The Employer shall
contribute to the Plan for each payroll period an amount equal to 100% of each
Participant's contribution to the Plan for that payroll period, reduced by any
Forfeitures used to replace such Matching Employer Contributions according to
section 8.6. However, the Employer's Contribution for any Plan Year shall be
subject to the limitations on allocations contained in Article IX.
3.2 rINTENTIONALLY LEFT BLANKI
3.3 Transfer Contributions. Subject to the direction of the
Employer, the Trustee is authorized to receive and add to the Trust Fund as a direct
transfer assets attributable to the vested interest of any Participant in a retirement
plan qualified under Code section 401(a) if such individual is a Participant in this
Plan. Transfers shall be credited to the particular Participant's .Transfer Account,
shall always be fully vested and nonforfeitable, and shall be distributed pursuant to
section 7.1 hereof.
3.4 Expenses and Fees. The Employer shall also be authorized to
reimburse the Fund for all expenses and fees incurred in the administration of the
Plan or Trust that were paid out of the assets of the Fund. Such expenses shall
include, but shall not be limited to, fees for professional services, printing, postage
and brokerage or other commissions, subject to the limits of Code section 415.
3.5 Responsibility for Contribution. The Trustee shall not be
required to determine if the Employer has made a contribution or if the amount
contributed is in accordance with the Plan or the Code. The Employer shall have
sole responsibility. in this regard.
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3.6 Return of Contributions. Contributions made to the Fund by
the Employer shall be irrevocable, except as follows:
(a) Any contribution made to the Employer because of a
mistake of fact must be returned to the Employer within one year of the
contribution.
(b) 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.
3.7 Military Service. Effective on and after December 12, 19941,
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 Code section 414(u).
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ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 Mandatory Employee Pre-Tax Contributions. A Participant
shall be required to contribute toward the cost of the Plan, from amounts the
Participant would otherwise receive as Compensation, an amount equal to 8% of
the Participant's Compensation for the period October 1, 1990 through December
315 1990, 10% of Participant's Compensation for the period January 1, 1991
through December 31, 1992 and 11% for periods after January 1, 1993. Such
contributions shall be designated as Mandatory Employee Contributions pursuant
to section 414(h)(2) of the Internal Revenue Code of 1986, contingent upon the
contributions being excluded from the Participant's gross income for federal
income tax purposes.
4.2 Voluntary Employee Contributions. A Participant may not
make Voluntary After-Tax Contributions to the Plan after September 30, 1990.
Participant Voluntary After-Tax Contributions made to the Plan before October 1,
1990 shall be held and administered according to the terms of this Plan governing
Voluntary After-Tax Contribution Accounts.
4.3 Rollover Contribution. A Participant may make a Rollover
Contribution to the Plan of all or any part of an amount distributed or distributable
to him or her from a Qualified Deferred Compensation Plan provided the Rollover
Contribution constitutes a direct transfer of eligible rollover distributions described
in section 401(a)(31) that are eligible to be rolled over and that would otherwise be
includible in gross income of the Code or a rollover described in section 402(c) of
the Code.
Such Rollover Contribution may also be made through an Individual Retirement
Account (IRA) qualified under section 408 of where the Code where the IRA was
used as a conduit from the Qualified Deferred Compensation Plan, the Rollover
Contribution is made in accordance with the rules of Code section 402(c) and the
Rollover Contribution does not include any regular IRA contributions, or earnings
thereon, that the Participant may have made to the IRA. The Trustee shall not be
held responsible for determining whether Rollover Contributions made hereunder
meet the requirements of this section 4.3.
Effective January 1, 2002, distributions from a retirement plan subject to section
403(b) of the Code, distributions from an eligible plan under section 457(b) of the
Code which is maintained by a state, political subdivision of a state, or any agency
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or instrumentality of a state or political subdivision of a state, and distributions
from IRAs and may also be rolled into this Plan, "subject to applicable law.
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ARTICLE V
PARTICIPANT ACCOUNTS
5.1 Separate Accounts. The Plan Administrator shall establish a
separate bookkeeping account for each Participant showing the total value of his or
her interest in the Fund. Each Participant's Account shall be separated for
bookkeeping purposes into the following subaccounts:
(a) Matching Employer Contributions.
(b) Transfer Contributions, which shall include
subaccounts as necessary for Employer Contributions, after-tax employee
contributions and before-tax employee contributions.
(c) Mandatory Employee Before-Tax Contributions.
(d) Voluntary After-Tax Contributions, with separate
accounting for contributions made before January 1, 1987 and contributions made
after December 31, 1986.
(e) Rollover Contributions, with separate subaccounts for
different rollovers as required by law. ,
5.2 Adjustments To Participant Accounts. As of each Valuation
Date of the Plan, the Plan Administrator shall credit to or .deduct from each
Account:
(a) the Participant's share of the Employer's Contribution
and forfeitures,
(b) any Employee Contributions made by the Participant
since the last Valuation Date,
(c) withdrawals, and
(d) the Participant's proportionate share of any investment
earnings and increases or decreases in.the fair market value of the Fund since the
last Valuation Date.
All allocations made hereunder will be made in a nondiscriminatory manner.
Accounts with segregated investments shall receive only the income or loss on
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such, segregated investments. Terminated Participants' vested account balances
shall be credited with any investment earnings and increase or decrease in the fair
market value of the Fund until the Valuation Date preceding distribution.
Terminated Participants' nonvested account balances shall be credited with any
investment earnings and increase or decrease in the fair market value of the Fund
until forfeited pursuant to section 8.5.
5.3 Participant Statements. The Plan Administrator-shall at least
annually prepare or cause to have prepared a statement for each Participant
showing the additions to and subtractions from his or her account since the last
Valuation Date and the fair market value of his or her account as of the current
Valuation Date.
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ARTICLE VI
ELIGIBILITY FOR BENEFITS
6.1 - Retirement. If a Participant's Employment terminates for any
reason on or after his Normal Retirement Age, he shall be eligible to receive the
entire amount then credited to his account, which shall be fully vested and
nonforfeitable.
6.2 Disability. If a Participant's Employment terminates because
of his Disability at any time, he shall be eligible to. receive the entire amount then
credited to his account, which shall be fully vested and nonforfeitable.
6.3 Death.
(a) Before Termination of Employment. If a Participant's
Employment terminates because of his death, the entire amount then credited to his
account shall become vested and nonforfeitable and payable pursuant to
subsection 6.3(c).
(b) After Termination of Employment. If a Participant
(including a former Participant) dies after terminating Employment, the Plan shall
pay the then undistributed vested balance, if any, of the Participant's account
pursuant to subsection (c) below.
(c) Recipient of Payment After Death and Timing of
Payment. Each Employee, upon becoming a Participant and on a form provided
by the. Plan and filed with the Plan Administrator, may designate a Beneficiary and
may, in addition, name a contingent Beneficiary. Any Participant may at any time
revoke or change his designation of Beneficiary by filing a written notice of the
revocation or change with the Plan Administrator. The Plan shall distribute
benefits payable, pursuant to subsection (a) or (b) above to the deceased
Participant's Beneficiary identified pursuant to a Beneficiary designation in effect
at the time of his death or, if no such designation exists, to the Participant's
surviving spouse or, if none, to his estate. The method and duration of payment
shall be consistent with the limits imposed-in Article VII. If distribution had
commenced to the Participant prior to his death, it shall continue being paid after
the Participant's death at least as rapidly as under the method of distribution being
made as of the Participant's death. If distribution had not begun before the
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Participant's death, full distribution shall occur over period described in (i), (ii) or
(iii) below:
(i) Non-Spouse Beneficiary. If the distribution is
payable to a designated Beneficiary who is not the Participant's spouse, the
distribution shall occur over a period no longer than the Beneficiary's Life
Expectancy, commencing on or before December 31 of the calendar year
immediately following calendar year of the Participant's death.
(ii) Spouse Beneficiary. If the distribution is
payable to a designated Beneficiary who is the Participant's spouse, the
distribution shall occur over a period no longer than the spouse's Life Expectancy,
commencing no later, than the later of [a] December 31 of the calendar year,
immediately following the calendar year in which the Participant died, or
[b] December 31 of-the calendar year in which the Participant would have attained
age 70-1/2. The surviving spouse may elect to have the-distribution of the
Account commence within 90 days after Participant's death.
(iii) No Designated Beneficiary. In all other cases,
i.e., in the absence of a designated Beneficiary, the distribution shall occur over a
period ending no later than December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
(d) Proof of Death. The Plan Administrator may require
such proper proof of death and such evidence as to a person's right to receive
payment from a deceased Participant's account as the Plan Administrator
reasonably deems appropriate.
6.4 Termination of Employment Before Retirement, Disability or
Death. If a Participant's employment with the Employer terminates prior to his
Normal Retirement Date for any reason other than his death or Disability, the
Participant shall be eligible to receive the vested portion of his account,
determined according to Article VIII.
6.5 Claims Procedures. Upon retirement, death, or other
severance of employment, the Participant or representative of such Participant may
request of the Plan Administrator payment of benefits due and the manner of
payment. If a request for benefits is made, the.Plan Administrator shall accept,
reject, or modify such request and, in the case of a denial or modification, the Plan
Administrator shall:
(a) state the specific reason or reasons for the denial,
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(b) - provide specific reference to pertinent Plan provisions
on which the denial is based,
(c) provide a description of any.additional material or
information necessary for the Participant or his or her representative to perfect the
claim and an explanation of why such material or information is necessary, and
(d) explain the Plan's claim review procedure as contained
herein.
In the event the request is rejected or modified, the Participant or his or her
representative may within 60 days following receipt.by the Participant or
representative of such rejection or modification, submit a written request for
review by the Plan Administrator of its initial decision. Within 60 days following
such request for review, the Plan Administrator shall render its final decision in
writing to the Participant or representative stating specific reasons for such
decision. If the Participant or representative is not satisfied with the Plan
Administrator's final decision, the Participant or representative can institute an
action in a federal court of competent jurisdiction; for this purpose, process would
be served on the Plan Administrator.
. 6.6 Disposition of Unclaimed Payments. If the Trustee is unable
to make any payment due under the Plan to any person because it does not know
the identity or post office address of such person, the Trustee shall suspend all
further payment until it has received written direction from the Plan Administrator.
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ARTICLE VII
PAYMENTS
7.1 Commencement of Payments. The distribution of all or any
portion of a Participant's account shall commence in accordance with the
Participant's election, not earlier than termination of the Participant's employment
(unless specifically authorized elsewhere herein or in a "qualified domestic
relations order" as defined in Colorado Revised Statutes). Distribution of a
Participant's account shall commence no later than the April 1 of the calendar year
following the later of (a) the calendar year in which the Participant attains age
70-1/2 or (b) the calendar year in which the Participant's employment with the
Employer terminates. Distributions shall be made in accordance with Treasury
Regulations under Internal Revenue Code section 401(a)(9). Distribution may
commence less than 30 days after the notice required under section 402(f) of the
Code is given, provided that:
(a) the Board clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a distribution (and, if applicable, a
particular distribution option), and
(b) the Participant, after receiving the notice, affirmatively
elects a distribution.
7.2 Method of Payment. Distribution of a Participant's account
shall occur in cash, in one of the following methods as chosen by the Participant
(or, if applicable, the Beneficiary):
(a) Single Lump Sum. A single, lump sum distribution of
the entire vested amount in the Participant's account. Payment shall be in a single
lump sum if the Participant's account is less than 100% vested or if the value of the
Participant's vested account (before payments begin) is not greater than $5,000
($3,500 prior to January 1, 2000). To the extent required by law, the distribution
shall be paid to an IRA.
(b) Partial Lump Sum. A lump sum distribution of a
portion of the Participant's account, which the Participant may choose to receive
separately from other Plan distribution(s).
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(c) Installment Payments. Distribution in substantially
equal monthly, quarterly, semiannual or annual payments. Such installments,
whether paid from the Plan assets or an annuity contract, shall be of such amount
and on such a schedule that the distribution is consistent with section 401(a)(9) of
the Code and applicable regulation, which the Plan hereby incorporates by
reference. Subject to such requirements, installment payments may be accelerated,
delayed or paid in a lump sum at the direction of the Participant.
7.3 De minimis Accounts. Notwithstanding the foregoing in this
article, an employee who separates from service for any reason other than death
and who has a combined nonforfeitable interest of $5,000 or less (effective
January 1, 2002, this amount can be determined without regard to any rollover
contributions made to the plan) in the Plan, shall be paid at the discretion of the
Plan Administrator, without the prior written consent of the Participant, his or her
lump sum value. To the extent required by law, payment shall be made to an IRA.
7.4 Minimum Distributions. The Board shall not direct the
Trustee to distribute the Participant's Account, nor shall the Participant elect to
have the Trustee distribute his Account, under a method of payment which does
not satisfy the minimum distribution requirements of this section 7.4 for the
calendar year in which the Trustee must commence distribution of the Participant's
Account under section 7.1 and for each succeeding calendar year. The minimum
distribution is the value of the Participant's vested Account at the beginning of the
calendar year divided by the Participant's remaining life expectancy or divided by
the remaining joint life expectancy of the Participant and his spouse, if applicable.
With respect to distributions under the Plan made for calendar years beginning on
or after January 1, 2001, the Plan will apply the minimum distribution
requirements under section 401(a)(9) that were proposed on January 17, 2001,
notwithstanding any provision of the Plan to the contrary. This shall continue in
effect until the end of the last calendar year beginning before the effective date of
final regulations under section 401(a)(9) or such other date specified in guidance
published by the Internal Revenue Service.
7.5 Direct Rollover. This section applies to 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 section, a distributee
may elect, at the time and in the manner prescribed by the Board, to have any
portion of an eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.
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(a) 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 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
and the distributee's designated beneficiary, or for a specified period of ten years
or more; any distribution to the extent such distribution is required under section
401(a)(9) of the Code; 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).
(b) 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, an annuity
plan described in section 403(a) 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 account or
individual retirement annuity. For distributions made after December 31, 2001, 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 relations order, as defined in section 414(p) of the
Code.
(c) Distributee: 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.
(d) Direct rollover: A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
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7.6 In-Service Withdrawals.
(a) Voluntary After-Tax. Contributions and Rollover
Contributions. A Participant who is employed by the Employer may withdraw all
or any part of his or her account attributable to Voluntary After-Tax Contributions
or Rollover Contributions upon written request to the Plan Administrator.
(b) Other. Requirements. Such request shall include the
Participant's address, social security number, birth date, and amount of the
withdrawal.' A Participant who elects an in-service withdrawal of his or her
Voluntary Contributions shall not be permitted to make a further Voluntary
Contribution for a period of one year from the date of the withdrawal.
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ARTICLE VIII
VESTING
8.1 Employee Contributions. A Participant shall always have a
100% vested and nonforfeitable interest in his or her Mandatory Employee
-Pre-Tax Contributions, Transfer Contributions, After-Tax Contributions, and
Rollover Contributions plus the earnings thereon. No forfeiture of Employer
related contributions will occur solely as a result of an Employee's withdrawal of
any Employee Contributions.
8.2 Employer Contributions. A Participant shall vest in his or her
account attributable to Employer Contributions in accordance with the table stated
below, provided that if a Participant is not already fully vested, he or she shall
become so upon attaining Normal Retirement Age, upon death prior to Normal
Retirement Age, or upon termination due to Disability, or upon termination of the
Plan.
(a) Employees hired on or prior to September 30, 1990:
Years of Service
Percentage Vested and
Nonforfeitable
Less than 2 years
2 years
3 years
4 years
5 years
0%
20%
30%
40%
100%
(b) Employees hired October 1, 1990 through December
31111997:
Percentage Vested and
Years of Service Nonforfeitable
Less than 2 years
0%
2 years
20%
3 years
30%
4 years
40%
5 years
60%
6 years
80%
7 years
100%
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(c) Employees employed on or hired on or after January 1,
1998:
Years of Service
Percentage Vested and
Nonforfeitable
Less than 2 years
2 years
3 years
4 years
5 years
0%
40%
60%
80%
100%
8.3 Years of Service Upon Rehire. In the event a former
Employee is rehired, such Employee shall be credited for vesting with all Years of
Service, except that Years of Service before a Break in Service shall.be canceled if
the Participant's Break in Service lasts at least one year and the Participant has
experienced a Forfeiture.
8.4 Calculating Vested Interest. A Participant's vested and
nonforfeitable interest shall be calculated by multiplying the fair market value of
his or her account attributable to Employer Contributions on the Valuation Date
preceding payment by the vested percentage as of his or her termination date. A
Participant's vested percentage shall be determined according to the Participant's
Years of Service and the vesting schedule stated in section 8.2.
8.5 When Forfeiture Occurs. A Participant's forfeiture if any, of
his or her nonvested account balance derived from Employer Contributions shall
occur:
(a) As of the last day of the Plan Year in which the
Participant incurs a one-year Break in Service; or if earlier and if applicable,
(b) On the date the Participant receives a lump sum
distribution of his or her entire vested account balance as a result of his or her
termination of employment with the Employer.
8.6 Reallocation of Forfeiture. Forfeitures shall be applied, first,
to offset administrative expenses of the Plan and, second, to reduce Matching
Employer Contributions.
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8.7 Amendment of Vesting Schedule. No amendment to the Plan
shall be effective to the extent that it has the effect of decreasing a Participant's
accrued benefit. For purposes of this paragraph, a Plan amendment which has the
effect of decreasing-a Participant's account balance, with respect to benefits
attributable to service before the amendment shall be treated as reducing an
accrued benefit. Furthermore, if the vesting schedule of a Plan is amended, in the
case of an Employee who is a Participant as of the later of the date such
amendment is adopted or the date it becomes effective, the nonforfeitable
percentage (determined as of such date) of such Employee's right to his
Employer-derived accrued benefit will not be less than his percentage computed
under the Plan without regard to such amendment.
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ARTICLE IX
LIMITATIONS ON ALLOCATIONS
9.1 Maximum Limits on Allocations.
(a) Maximum Annual Additions. The maximum
contributions and other additions for a Participant under this Plan for any
Limitation Year shall not exceed, when expressed as an annual addition to the
Participant's account, and when added to the annual additions to the Participant's
account for the Limitation Year under all other defined contribution plans and all
welfare benefit funds, as defined in Internal Revenue Code section 419(e), and any
individual medical account, as defined in Internal Revenue Code section 415(1),
maintained by the Employer, the lesser of:
(i) $30,000 ($40,000 effective January 1, 2002), as
adjusted under Internal Revenue Code section 415(d); or
(ii) 25% (100% effective January 1, 2002) of the
Compensation paid to the Participant by the Employer in such year.
The Compensation limitation referred to in (ii) shall not apply to. any contribution
for medical benefits (within the meaning of section 401(h) or section 419A(f)(2) of
the Code) which is otherwise treated as an annual addition under section 415(1)(1)
or 419A(d)(2) of the Code.
(b) Definition of Compensation. For purposes of this
Article IX; Compensation shall mean wages within the meaning of Internal
Revenue Code section 3401(a) (for purposes of income tax withholding at the
source) but determined without regard to any rules that limit the remuneration
included in wages based on the nature or location of the employment or the
services performed.. Effective with the first Plan Year beginning after 1997,
Compensation for purposes of this Article IX shall include any elective deferral as
defined in Code section 402(g)(3) and any amount which is contributed or deferred
by the Employer at the election of the Employee and which is not includible in the
gross income of the Employee by reason 'of Code section 125 or 457.
For purposes of applying the limitations of this Article, Compensation for a
Limitation Year is the Compensation actually paid or includable in gross income
during such year.
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(c) Definition of Annual Addition. For the purposes of
this Article IX, "annual, addition shall mean the sum allocated to a Participant's
account for any Limitation Year of
(i) Employer Contributions;
(ii) Employee Contributions;
(iii) Forfeitures;
(iv) Amounts derived. from contributions paid or
accrued after December 31, 1985, in taxable years ending after such date, which
are attributable to post-retirement medical benefits allocated to the separate
account of a Key Employee, as defined in Internal Revenue Code
section 419A(d)(3), under a welfare benefit fund, as defined in Code
section 419(e) maintained by the Employer; and
(v) Amounts allocated after March 31, 1984'to an
individual medical account (as defined in. Internal Revenue Code
section 415(1)(1)) which is part of a pension or annuity plan maintained by the
Employer.
The term "annual addition" shall not include the allocation to
a Participant's account of income, transfers according to section 3.2, or rollovers
according to section 4.3.
(d) For purposes of this Article IX, "Employer" means the
Employer that adopts this Plan.
9.2 Disposition of Excess Annual Additions. If, due to a
reasonable error in estimating a Participant's Compensation or other reasons
acceptable to the Commissioner of Internal Revenue, or as a result of the allocation
of forfeitures, an amount in excess of the limit, described in section 9.1 is allocated
to a Participant's account, the excess will be disposed of as follows (attributing all
excess amounts to this Plan first, if multiple plans are involved):
(a) One-half (Note: this assumes equal employee and
employer contributions) of the excess amount will be returned to the Participant as
a return of employee contributions, to the extent that the return would reduce the
excess amounts in the Participant's account.
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(b) If after the application of paragraph (a) an excess
amount still exists, and the Participant is covered by the Plan at the end of the
Limitation Year, the excess amount in the Participant's account will be used to
reduce Employer Contributions (including any allocation of forfeitures) for such
Participant in the next Limitation Year, and each succeeding Limitation Year if
necessary.
(c) If after the application of paragraph (a) an excess
amount still exists, and the Participant is not covered by the Plan at the end of the
Limitation Year, the excess amount will be held unallocated in a suspense account.
The suspense account will be applied to reduce future Employer Contributions
(including allocation of any forfeitures) for all remaining Participants in the next
Limitation Year, and each succeeding Limitation Year if necessary. If a suspense
account is in existence at any time during a Limitation Year pursuant to this
section, it will not participate in the allocation of the Trust's investment gains and
losses. If a suspense account is in existence at any time during a particular
Limitation Year, all amounts in the suspense account must be allocated and
reallocated to Participants accounts before any Employer or any Employee
contributions may be made to the Plan for that Limitation Year. Excess amounts
may not be distributed to Participants or former Participants, except as provided in
section 9.2(a) above.
(d) If a suspense account is in existence at any time during
the Limitation Year pursuant to this paragraph, it will not participate in the
allocation of investment gains and losses.
9.3 Participation in This Plan and a Defined Benefit Plan
of
Effective for Plan Years Beginning on or After January 1, 2000). If the Employer
maintains, or at any time maintained, a qualified defined benefit plan covering any
Participant in this Plan, the sum of the defined benefit plan fraction and the defined
contribution plan fraction for each Limitation Year may not exceed 1.0, as
described in section 415(e) of the Code, to the extent applicable to government
plans.
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ARTICLE X
ADMINISTRATION
10.1 Employer. The Employer shall be a named fiduciary. The
Employer's duties shall include but are not limited to appointing the Plan's
attorney, accountant, actuary, and any other party needed to administer the Plan,
and reviewing and approving any financial reports, investment review, or other
reports prepared by any party appointed by the Employer. The Employer shall
provide indemnification or insurance for breach of fiduciary duty or errors and
omissions insurance for all Board members on the same terms and conditions as
the Employer does for other Town boards and commissions.
10.2 Plan Administrator.
(a) Powers and Duties of Plan Administrator. The Plan
Administrator shall be a named fiduciary. The Plan Administrator shall administer
the Plan and shall have all powers necessary for that purpose, including, but not by
way of limitation, power to interpret the Plan, to communicate with Employees
regarding their participation and benefits under the Plan, including the
administration of claims procedures, to determine the eligibility, status and rights
of all persons under the Plan and in general to decide any dispute. The Plan
Administrator shall have full authority to determine eligibility for benefits and to
construe the terms of the Plan. The Plan Administrator shall direct the Trustee
concerning all distributions from the Fund, in accordance with the provisions of
the Plan, and. shall have such other powers in the administration of the Fund as
may be conferred upon it by the Trust Agreement. The Plan Administrator shall
file any returns and reports with the Internal Revenue Service, Department of
Labor, or any other governmental agency, establish a funding policy and
investment objective consistent with the purposes of the Plan and shall maintain all
Plan records. The Plan Administrator shall be agent of the Plan for service of all
process.
(b) Meetings. The Board shall meet whenever required for
the orderly and timely administration of the business of the Plan at such location as
may be acceptable to the Board.
(c) Quorum. A quorum for the transaction of business at a
duly called meeting shall consist of three (3) members.
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(d) Voting. All actions by and decisions of the Board shall
be by the vote of at least three (3) members. Each Board member shall have one
vote.
(e) Organization and Operation of the Board. The Town
Finance Director or his or her designee shall serve as Chair. At the
commencement of each year, the Board members shall select from among them a
Secretary who shall each serve for a period of one (1) year. The Secretary shall be
responsible for maintaining an accurate record of all actions of the Board,
including minutes from all Board meetings. A copy of such minutes shall be
retained as a record of the Plan and one copy thereof shall. be distributed to each
Board member. Documents requiring execution by the Board shall be signed by
the Chair and attested by the Secretary. The Board may adopt rules and
regulations necessary for the orderly election of Employee members of the Board
and for the proper and efficient administration of the Plan, provided such rules and
regulations are not inconsistent with the terms of the Plan or the provisions of
applicable law.
10.3 Trustee. The Trustee shall be responsible for the
administration of investments held in the Fund. These duties shall include:
(a) implementing an investment program based on the
Employer's investment objectives,
(b) receiving contributions under the terms of the Plan,
(c) making distributions from the Fund in accordance with
written instructions received from an authorized representative of the Plan
Administrator, and
(d) keeping accurate records reflecting its administration
of the Fund and making such, records available to the Employer for review and
audit. Within 90 days after each Plan Year, and within 90 days after its removal or
resignation, the Trustee shall provide to the Employer an accounting of its
administration of the Fund during such year or from the end of the preceding Plan
Year to the date of femoval or resignation. Such accounting shall include a
statement of cash receipts and disbursements since the date of its last accounting
and shall contain an asset list showing the fair market value of investments held in
the Fund as of the end of the Plan Year. The value of marketable investments shall
be determined using the most recent price quoted on a national securities exchange
or over-the-counter market. The value of non-marketable investments shall be
determined in the sole judgment of the Trustee. The value of investments in
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securities or obligations of the Employer in which there is no market shall be
determined by an independent qualified party selected by the Employer using a
method acceptable to the Trustee. The Employer shall review the Trustee's
accounting and notify the Trustee in the event of its disapproval of the report
within 90 days, providing the Trustee with a written description of the items in
question. The Trustee's duties shall be limited to those described above. The
Employer shall be responsible for any other administrative duties required under
the Plan or by applicable law.
10.4 Administrative Fees and Expenses. All reasonable costs,
charges and expenses incurred by the Trustee in connection with the
administration of the Fund and all reasonable costs, charges and expenses incurred
by the Plan Administrator in connection with the administration of the Plan
(including fees for legal services rendered to the Trustee or Plan Administrator)
may be paid by the Employer, but if not paid by the Employer when due, shall be
paid from the Fund. Such reasonable compensation to the Trustee as may be
agreed upon from time to time between the Employer and the Trustee and such
reasonable compensation to the Plan Administrator as may be agreed upon from
time to time between the Employer and Plan Administrator may be paid by the
Employer, but if not paid by the Employer when due shall be paid by the Fund.
Notwithstanding the foregoing, no compensation other than reimbursement for
expenses shall be paid to a Plan Administrator who is the Employer or a full-time
Employee of the Employer.
10.5 Governing Law. Construction, validity and administration of
the Plan and Trust shall be governed by Federal law to the extent applicable and to
the extent not applicable by the laws of the State of Colorado.
10.6 Election and/or Appointment of Employee Board Members.
The three (3) Employees who are to be elected to the Board by Participants shall
be elected to serve a term of three (3) years. If otherwise qualified, Employee
members of the Board may be reelected to the Board without limitation on the
number of terms they may serve. If an elected Board member separates from
service of the Employer, the Board shall appoint a new member to fulfill the
remaining term.
10.7 Written Communication. To the extent permitted by
applicable Treasury Regulations and accepted by the Plan Administrator, all
provisions of the Plan and Trust Agreement that require written notices and
elections shall be interpreted to mean authorized electronic or telephonic notices
and elections.
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ARTICLE XI
TRUST FUND
11.1 The Fund. The Fund shall consist of all contributions made
under Article III and Article IV of the Plan and the investment thereof and
earnings thereon. All contributions and the earnings thereon less payments made
under the terms of the Plan, shall constitute the Fund. The Fund shall be
administered as provided herein.
11.2 Control of Plan Assets. The assets of the Fund or evidence of
ownership shall be held by the Trustee under the terms of the Plan and Trust.
11.3 Exclusive Benefit Rules. No part of the Fund shall be used
for, or diverted to, purposes other than for the exclusive benefit of Participants,
former Participants with a vested interest, and the beneficiary or beneficiaries of
deceased Participants having a vested interest in the Fund at death.
11.4 . Assignment and Alienation of Benefits. No right or claim to,
or interest in, any part of the Fund, or any payment therefrom, shall be assignable,
transferable, or subject to sale, mortgage, pledge, hypothecation, communication,
anticipation, garnishment, attachment, execution, or levy of any kind, and the
Trustee shall not recognize any attempt to assign, transfer, sell, mortgage, pledge,
hypothecate, or anticipate the same, except to the extent required by law. The
preceding sentence shall also apply to the creation, assignment, or recognition of a
right to any benefit payable with respect to a Participant pursuant to a domestic
relations order, except to the extent that Colorado statutes and rules adopted by the
Plan Administration for enforcement of such order. The Plan Administrator may
adopt rules regarding payments pursuant to a domestic relations order.
11.5 Trust Agreement. The Employer has entered into a Trust
Agreement with the Trustee Wells Fargo Bank West, N.A., formerly United Bank
of Denver, N.A, to provide for the holding, investment and administration of the
funds of the Plan. The Trust Agreement shall be part of the Plan, and the right and
duties of an y person under the Plan shall be subject to all terms and provisions of
the Trust Agreement.
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ARTICLE XII
PARTICIPANT LOANS
12.1 Application. A Plan Participant may make application to the
Plan Administrator requesting a loan from the Fund. The Plan Administrator shall
have the sole right to approve or disapprove a Participant's application provided
that loans shall be made available to all Participants and Beneficiaries on a
reasonably equivalent basis. Loans shall not be made available to highly
Compensated Employees in an amount greater than the amount made available to
other Employees.
12.2 Maximum Amount. No loan granted hereunder shall exceed
the lesser of (a) $50,000 reduced by the excess (if any) of the highest outstanding
balance of.loans during the one year period ending on the day before the loan is
made, over the outstanding balance of loans from the Plan on the date the loan is
made, or (b) one-half of the fair market value of a Participant's vested account
balance derived from Employer Contributions, VoluntaryAfter-Tax Contributions,
Mandatory Employee Contributions, and Rollover Contributions. An assignment
or pledge of any portion of the Participant's interest in the Plan and a loan,. pledge,
or assignment with respect to any insurance contract purchased under the Plan,
will be treated as a loan under this Article XII.
12.3 Application Forms. All applications must be made on forms
provided by the Plan Administrator and must be signed by the Participant.
12.4 Interest on Loans. Any loan granted hereunder shall bear
interest at a rate determined by the Plan Administrator to be reasonable at the time
of application, and subject to the approval of the Trustee.
12.5 Securi . All loans made hereunder shall be secured by the
Participant's vested account balance and by such additional collateral as may be
required by the Plan Administrator.
12.6 Terms of Repayment. Any loan shall by its terms require that
repayment (principal and interest) be bi-weekly, over a period not extending
beyond five years from the date of the loan. A loan that is used to acquire or
construct a dwelling unit which is used within a reasonable time (determined at the
time the loan is made) as the principal residence of the Participant, may allow for
the repayment (principal and interest) over a period not exceeding beyond 30
years. The Plan Administrator may require the payment of principal and interest
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by means of payroll withholding. The Plan Administrator may allow loans to be
suspended during periods of leave of absence as permitted by tax laws.
12.7 Principal and Interest Allocation. The principal and interest
paid by a Participant on his or her loan shall be credited as.a segregated
investment.
12.8 Deemed Distribution of Loan Upon Default. A Participant's
loan shall immediately become due and payable according to the rules prescribed
by the Plan Administrator if such Participant fails to make a principal or interest
payment when due. The defaulted loan shall be a deemed distribution in
accordance with applicable Treasury Regulations.
12.9 Approval of Application. If a Participant's loan application is
approved by the Plan Administrator, such Participant shall be required to sign a
note, loan agreement and assignment of his or her entire interest in the Fund as
collateral for the loan.
12.10 Loan Policy. The Employer will adopt a loan policy
establishing the rules and procedures that the Board of Retirement will use to
administer the Participant loan program.
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ARTICLE XIII
INSURANCE POLICIES
13.1 Limitations. If agreed upon by the Plan Administrator and the
Employer, Employees may elect the purchase of life insurance policies under the
Plan. If elected, the aggregate premiums for all ordinary life policies (contracts
with decreasing death benefits and non-decreasing premiums) shall-not exceed
50% of the aggregate Employer Contributions allocated to the account of a
Participant. The aggregate premiums for term contracts or universal life contracts
shall not exceed 25% of aggregate Employer Contributions allocated to the
account of a Participant. The aggregate premiums for a Participant with both a
whole life and a term contract shall not exceed 25% of the aggregate Employer
Contributions allocated to the account of a Participant. Premium payments shall
be deducted from the Participant's Employer Contributions account, or if so
directed by the Participant, from the Participant's nondeductible Voluntary
Contributions account.
- 13.2 Administrative Requirements. Any policies purchased
hereunder shall be held subject to the following rules:
(a) The Trustee shall be applicant, owner and beneficiary
of any policies issued hereunder. The insurance contract (s) must provide that
proceeds will be payable to the Trustee, however the Trustee shall be required to
pay over all proceeds of the contract(s) to the Participant's designated Beneficiary
in accordance with the distribution provisions of this Plan. Under no
circumstances shall the Trust retain any part of the proceeds.
(b) Except as provided in subsection (f), all policies or
contracts purchased hereunder shall be endorsed as nontransferable.
(c) A Participant who is uninsurable or insurable at
substandard rates, may elect to receive a reduced amount of insurance, if available,
or may waive the purchase of any insurance.
(d) All dividends or other returns received on any policy
purchased hereunder, shall be applied as directed by the Trustee to reduce the next
premium due on such policy, to purchase paid-up additions, to accumulate under
the contract; or if no further premium is due, such amount shall be credited to the
Fund as part of the account of the Participant for whom the policy is held.
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(e) If Employer Contributions are inadequate to pay all
premiums on all' insurance policies, the Trustee may, at the option of the Plan
Administrator, utilize other amounts remaining in each Participant's account to pay
the premiums on his respective policy or policies, allow the policies to lapse,
reduce the policies to a level at which they may be maintained, or borrow against
the policies on a prorated basis, provided that the borrowing does not discriminate
in favor of the policies on the lives of officers, shareholders, and highly
compensated employees.
(f) On retirement or termination of employment of a
Participant, the Plan Administrator shall direct the Trustee to cash surrender the
Participant's policy and credit the proceeds to his or her account for distribution
under the terms of the Plan. However, before so doing, the Plan Administrator
shall first offer to transfer ownership of the policy to the Participant in exchange
for payment by the Participant of the cash value of the policy at the time of
transfer. Such payment shall be credited to the Participant's account for
distribution under the terms of the Plan (including the applicable vesting schedule).
(g) The Plan Administrator shall be solely responsible to
see that these insurance' provisions are administered properly and that if there is
any conflict between the provisions of this Plan and any insurance contracts issued
hereunder that the terms of this Plan will control.
(h) The Employer shall direct the Trustee as to the
insurance company and insurance agent through which the Trustee is to purchase
the insurance contracts, and the amount of the coverage.
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ARTICLE XIV
AMENDMENT AND TERMINATION
14.1 Amendments. The Employer shall have the right at any time,
and from time to time, to:
(a) Amend this Plan in such manner as it may deem
necessary or advisable in order to qualify this Plan and the Trust created in relation
hereto pursuant to sections 401(a) and 501(a) of the Internal Revenue Code of
1986 and any such amendment may, by its terms, be retroactive; and
(b) Amend this Plan in any other manner.
• No amendment shall take effect unless approved at the time of
adoption by 65% of all Participants employed at the time of adoption.
No amendment shall authorize any part of the Trust Fund to
be used for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates or to defray the reasonable expenses of
administering the Plan; no such amendment shall cause any reduction in the vested
portion of any Participant's interest in the Trust Fund or cause or permit any
portion of the Trust Fund to revert to, or become property of, the Employer and no
such amendment which affects the rights, duties or responsibilities of the Trustee
shall be effective without the Trustee's written consent. Any such amendment
shall become effective as of the effective date stated therein upon delivery of a
written instrument, executed on behalf of the Employer by its proper officers duly
authorized,, to the Trustee and the written consent of the Trustee thereto, if such
consent is required. The Board of Trustees may amend this Plan by adopting the
amendment or amendments or may authorize, by standing resolution or otherwise,
a certain individual or individuals to adopt an amendment or amendments hereto,
which amendments shall bear the same effect as if adopted by the Board of
Trustees.
14.2 Termination. The Employer shall have the right to terminate
the Plan upon 60 days notice in writing to the Trustee. If the Plan is terminated,
partially terminated, or if there is a complete discontinuance of contributions under
the Plan by the Employer, all amounts credited to the accounts of Participants shall
vest and become nonforfeitable. In the event of termination, the Plan
Administrator shall direct the Trustees with respect to the distribution of.accounts
to or for the exclusive benefit of Participants or their beneficiaries.
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14.3 Qualification of Employer's Plan. If the Employer fails to
attain or retain Internal Revenue Service qualification, such Plan shall no longer be
considered a Plan.
14.4 Mergers and Consolidations. In the case of any merger or
consolidation of the Employer's Plan with, or transfer of assets or liabilities of the
Employer's Plan to, any other plan, immediately after the merger, consolidation, or
-transfer Participants in the Employer's Plan shall be credited with benefits which
are equal to or greater than the benefits they would have been credited with
immediately before the merger, consolidation, or transfer if the Plan had then
terminated.
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IN WITNESS WHEREOF, the parties hereto have executed this Plan
this day of ,
EMPLOYER:
Signed for the Employer By:
Title:
Signature:
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