TC Res. No. 1997-54RESOLUTION NO. 97-54
SERIES OF 1997
A RESOLUTION ADOPTING A PART-TIME, TEMPORARY AND SEASONAL
(PTS) EMPLOYEES DEFERRED COMPENSATION PLAN
WHEREAS, the Town has part-time, temporary and seasonal employees rendering
valuable services; and
WHEREAS, the establishment of a PTS deferred compensation plan for such employees
serves the interests of the Town by enabling it to provide reasonable retirement security
for its employees, by providing increased flexibility in its personal management system,
and by assisting in the attraction and retention of competent personnel; and
WHEREAS, the Town has determined that the establishment of a PTS deferred
compensation plan to be administered by the ICMA Retirement Corporation serves the
above objectives; and
WHEREAS, the Town desires that its PTS deferred compensation plan be administered
by the ICMA Retirement Corporation, and that the funds held_under such plan be
invested in the ICMA Retirement Trust, a trust established by public employers for the
collective investment of funds held under their retirement and deferred compensation
plans;
NOW THEREFORE BE IT RESOLVED that the Town of Avon hereby adopts the
deferred compensation plan (the "Plan") in the form of the ICMA Retirement
Corporation Part-time, Temporary and Seasonal Employees (PTS) Deferred
Compensation Plan and Trust, referred to as Appendix A.
BE IT FURTHER RESOLVED that the Town hereby executes,the' Declaration of Trust
of the ICMA Retirement Trust, attached hereto as Appendix B, intending this execution
to be operative with respect.to any retirement or deferred compensation plan
subsequently established by the Town, if the assets are to be invested in the ICMA
Retirement Trust.
BE IT FURTHER RESOLVED that the assets of the Plan shall be held intrust, with the
Town serving as trustee,, for the exclusive benefit of the Plan participants and their .
beneficiaries, and the assets shall not be diverted to any other purpose. The Trustee's
beneficial ownership of Plan assets held in the ICMA Retirement Trust shall be held for
the further exclusive benefit of the Plan participants and their beneficiaries;
BE IT FURTHER RESOLVED that the Town hereby agrees to serve as trustee under the
plan.
BE IT FURTHER RESOLVED that the Director of Finance shall be the coordinator for
this program; shall receive necessary reports, notices, etc. from the.ICMA Retirement
Corporation or the ICMA Retirement Trust; shall cast, on behalf of the Town, any
required votes under the ICMA Retirement Trust; Administrative duties to carry out the
plan may be assigned to the appropriate departments, and is authorized to execute all
necessary agreements with the ICMA Retirement Corporation incidental to the
administration of the Plan.
ADOPTED this 14th day of October, 1997.
TOWN OF AVON, COLORADO
Jack 1wcett, Mayor
ICMA RETIREMENT CORPORATION
ILIN
USING THE 457 DEFERRED
COMPENSATION PLAN
RETAIN BOOKLET
This is one of two booklets containing information to
establish your 457 deferred compensation plan with the
ICMA Retirement Corporation.
This booklet includes:
• Plan Document and Trust
• Declaration of Trust of the ICMA Retirement Trust
Please read the information and retain it for your files.
This deferred compensation plan has been submitted to the
Internal Revenue Service by a public employer for a Private
Letter Ruling.
The IRS has not yet issued a Ruling on the plan and may
require changes to this document prior to -issuing a Ruling.
If changes are required in the document, you will be notified
of the changes.
For assistance
Please contact your 457 implementation analyst at 1-800-326-
7272.
4 5 7 P I a it A d o p t i o it P a c k a g e R e t a i it D o i it m e it t
Def erred Cotit peit e atioit Plait Document ait d Trust, November 1 996
DEFERRED COMPENSATION PLAN
& TRUST
Article 1. Purpose
The Employer hereby establishes the Employer's De-
ferred Compensation Plan and Trust, hereafter referred
to as the, "Plan." The Plan consists of the provisions set
forth in this document.
The primary purpose of this Plan is to provide retirement
'income and other deferred benefits to the Employees of the
Employer and the Employees' Beneficiaries in accordance
with the provisions of Section 457 of the Internal Rev-
enue Code of 1986, as amended (the "Code").
This Plan shall be an agreement solely between the
Employer and participating Employees. The Plan and
Trust forming a part hereof are established and shall be
maintained for the exclusive benefit of eligible Employ-
ees and their Beneficiaries. No part of the corpus or
"income of the Trust shall revert to the Employer or be
used for or diverted to purposed other than the exclu-
sive benefit of Participants and their Beneficiaries.
Article 11. Definitions
2.04 Beneficiary: The person or persons designated by
the Participant in his joinder Agreement who shall
receive any benefits payable hereunder in the event of
the Participant's death. In the event that the Participant
names two or more Beneficiaries, each Beneficiary shall
be entitled to equal shares of the benefits payable at the
Participant's death, unless otherwise provided in the
Participant's Joinder Agreement. If no beneficiary is
designated in the joinder Agreement, if the Designated
Beneficiary predeceases the Participant, or if the desig-
nated Beneficiary does not survive the Participant for a
period of fifteen (15) days, then the estate of the Par-
ticipant shall be the Beneficiary.
2.05 Deferred Compensation: The amount of Nor-
mal Compensation otherwise payable to the Participant
which the Participant and the Employer mutually agree
to defer hereunder, any amount credited to a
Participant's Account by reason of a transfer under
section 6.09, or any other amount which the Employer
agrees to credit to a Participant's Account.
2.06 Employee: Any individual who provides services
for the Employer, whether as an employee of the
Employer or as an independent contractor, and who has
been designated by the Employer as eligible to partici-
pate in the Plan.
2.01 Account: The bookkeeping account maintained
for each Participant reflecting the cumulative amount of
the Participant's Deferred Compensation,, including any
income, gains, losses, or increases or decreases in market
value attributable to the Employer's investment of the
Participant's Deferred Compensation, and further
reflecting any distributions to the Participant or the
Participant's Beneficiary and any fees or expenses
charged against such Participant's Deferred Compensation.
2.02 Accounting Date: Each business day that the
New York Stock Exchange is open for trading, as
provided in Section 6.06 for valuing the Trust's assets
2.03 Administrator: The person or persons named to
carry out certain nondiscretio nary administrative func-
tions under the Plan, as hereinafter described. The
Employer may remove any person as Administrator
upon 60 days' advance notice in writing to such person,
in which case the Employer shall name another person
or persons to act as Administrator. The Administrator
may resign upon 60 days' advance notice in writing to
the Employer, in which case the Employer shall name
another person or persons to act as Administrator.
2.07 Includible Compensation: The amount of an
Employee's compensation from the Employer for a
taxable year that is attributable to services performed for
the Employer and that is includible in the Employee's
gross income for the taxable year for federal income tax
purposes; such term does not include any, amount
excludable from gross income under this Plan or any
other plan described in Section 457(b) of the Code or
any other amount excludable from gross income for
federal income tax purposes. Includible Compensation
shall be determined without regard to any community
property laws.
2.08 Joinder Agreement: An agreement entered into
between an Employee and the Employer, including any
amendments or modifications thereof. Such agreement
shall fix the amount of Deferred Compensation, specify
a preference among the investment alternatives desig-
nated by the Employer, designate the Employee's
Beneficiary or Beneficiaries, and incorporate the terms,
conditions, and provisions of the Plan by reference.
ICMA RETIREMENT CORPORATION.
2.09 Normal Compensation: The amount of com-
pensation which would be payable to a Participant by
the Employer for a taxable year if no joinder Agreement
were in effect to defer compensation under this Plan.
2.10 Normal Retirement Age: Age 70-1/2, unless the
Participant has elected an alternate Normal Retirement Age
by written instrument delivered to the Administrator prior
to Separation from Service. A Participant's Normal Retire-
ment Age determines the period during which a Participant
may utilize the catch-up limitation of Section 5.02 hereun-
der. Once a Participant has to any extent utilized the catch-
up limitation of Section 5.02, his Normal Retirement Age -
may not be changed.
A Participant's alternate Normal Retirement Age may
not be earlier than the earliest date that the Participant
will become eligible to retire and receive unreduced
retirement benefits under the Employer's basic retire-
ment plan covering the Participant and may not be later
than the date the Participant will attain age 70-1/2. If a
Participant continues employment after attaining age
70-1/2, not having previously elected alternate Normal
Retirement Age, the Participant's alternate Normal -
Retirement Age shall not be later than the mandatory
retirement age, if any, established by the Employer, or
the age at which the Participant actually separates from
service if the Employer has no mandatory retirement
age. If the Participant will not become eligible to
receive benefits under a basic retirement plan main-
tained by the Employer, the Participant's alternate
Normal Retirement Age may not be earlier than age 55
and may not be later than age 70-1/2.
2.11 Participant: Any Employee who has joined the
Plan pursuant to the requirements of Article IV.
2.12 Plan Year: The calendar year.
2.13 Retirement: The first date -upon which both of the
following shall have occurred with respect to a participant:
Separation from Service and attainment of age 65.
2.14 Separation From Service: Severance of the
Participant's employment with the Employer which
constitutes a "separation from service" within the
meaning of Section 402(d)(4)(A)(iii) of the Code. In
general, a Participant shall be deemed to have severed
his employment with the Employer for purposes of this
Plan when, in accordance with the established practices of
the Employer, the employment relationship is considered
to have actually terminated. In the case of a Participant
who is an independent contractor of the Employer,
Separation from Service shall be deemed to have oc-
curred when the Participant's contract under which
services are performed has completely expired and
terminated, there is no foreseeable possibility that the
Employer will renew the contract of enter into a--new
contract for the Participant's services, and is not antici-
pated that the Participant will become an Employee-of
the Employer.
2.15 Trust: The Trust created under Article VI of the
Plan which shall consist of all compensation deferred
under the Plan, plus any income and gains thereon, less
any losses, expenses and distributions to Participants and
Beneficiaries.
Article 111. Administration
3.01 Duties of the Employer: The Employer shall
have the authority to make all discretionary decisions
affecting the rights or benefits of Participants-which may
be required in the administration of this Plan. The
Employer's decisions shall be afforded the maximum ,
deference permitted by applicable law.
3.02 Duties of Administrator: The Administrator, as
agent for the Employer, shall perform nondiscretionary
administrative functions in-connection with-the Plan,
including the maintenance of Participants' Accounts,
the provision of periodic reports of the status of each
Account, and the disbursement of benefits on behalf
of the Employer in accordance -with the provisions of
this Plan.
Article IV. Participation in the Plan
4.01 Initial Participation: An Employee may become
a Participant by entering into a joinder Agreement prior
to the beginning.of the-calendar month in which the
joinder Agreement is to become effective to defer
compensation not yet earned.
4.02 Amendment of Joinder Agreement: A Partici-
pant may amend an executed joinder Agreement to
change the amount of compensation not yet earned
which is to be deferred (including the reduction of such
future deferrals to zero) or to change his investment
preference (subject-to such restrictions as may-result
from the nature of terms of any investment made by the
Employer). Such amendment shall become effective as
Two
4 5 7 Plan Adoption Package Retain Docit in eit r
Deferred Co in peit sarioit Plan Do cit in eit t and Trust, Novcin bcr 1996
of the beginning of the calendar month commencing
after the date the amendment is executed. A Participant
may at any time amend his joinder Agreement to
change the designated Beneficiary, and such amendment
shall become effective immediately.
Article V. Limitations on Deferrals
5.01 Normal Limitation: Except as provided in section
5.02, the maximum amount of Deferred Compensation for
any Participant for any taxable year shall not exceed the
lesser of $7,500.00, as adjusted for the cost-of-living in
accordance with Code section 457(e)(15) for taxable years
beginning after December 31, 1996 (the "dollar limita-
tion"), or 33-1/3 percent of the Participant's Includible
Compensation for the taxable year. This limitation will
ordinarily be equivalent to the lesser of the dollar limitation
in effect for the taxable year or 25 percent of the
Participant's Normal Compensation.
5.02 Catch-Up Limitation: For each of the last three
(3) taxable years of a Participant ending before his
attainment of Normal Retirement Age, the maximum
amount of Deferred Compensation shall be the lesser of
(1) $15,000 or (2) the sum of (i) the Normal Limitation
for the taxable year, and (ii) the Normal Limitation for
each prior taxable year of the Participant commencing
after 1978 less the amount of the Participant's Deferred
Compensation for such prior taxable years. A prior
taxable year shall be taken into account under the
preceding sentence only if (i) the Participant was eli-
gible to participate in the Plan for such year (or in any
other eligible deferred compensation plan established
under Section 457 of the Code which is properly taken
into account pursuant to regulations under section 457),
and (ii) compensation (if any) deferred under the Plan
(or such other plan) was subject to the deferral limita-
tions set forth in Section 5.01
5.03 Other Plans: The amount excludable from a
Participant's gross income under this Plan or any other
eligible deferred compensation plan under section 457
of the Code shall not exceed $7,500.00 (or such greater
amount allowed under Sections 5.01 or 5.02 of the
Plan), less any amount excluded from gross income
under section 403(b), 402(a)(8), or 402(h)(1)(B) of the
Code, or any amount with respect to which a deduction
is allowable by reason of a contribution to an organiza-
tion described in section 501(c)(18) of the Code.
Article Vl. Trust and Investment
of Accounts
6.01 Investment of Deferred Compensation: A
Trust is hereby created to hold all the assets of the Plan
for the exclusive benefit of Participants and Beneficia-
ries, except that expenses and taxes may be paid from
the Trust as provided-in Section 6.03. The trustee shall
be the Employer or such other person which agrees to
act in that capacity hereunder.
6.02 Investment Powers: The trustee or the Plan
Administrator, acting as agent for the trustee, shall have
the powers listed in this Section with respect to invest-
ment of Trust assets, except to the extent that the
investment of Trust assets is directed by Participants,
pursuant to Section 6.05.
(a) To invest and reinvest the Trust without
distinction between principal and income in any
form of tangible or intangible property, real, per-
sonal, or mixed, and wherever situated, including,
but not by way of limitation, common or preferred
stocks, shares of regulated investment companies and
other mutual funds, bonds, loans, notes, debentures,
mortgages, certificates of deposit, interest, or par-
ticipation, equipment trust certificates, commercial
paper including but not limited to participation in
pooled commercial paper accounts, contracts with
insurance companies including but not limited to
insurance, individual or group annuity, deposit
administration, and guaranteed interest contracts,
deposits at reasonable rates of interest at banking
institutions including but not limited to savings
accounts and certificates of deposit, and other forms
of securities or investments of any kind, class, or
character whatsoever and representing interests in
any form of enterprise, wherever it may be located,-
organized or operated within or without the United
States of America, whether such investments are
income producing or not, without being limited in
any respect by statute or court rule or decision of
any jurisdiction now or hereafter in force purporting
to limit or otherwise affect such investments. Assets
of the Trust may be invested in securities or new
ventures that involve a higher degree of risk than
investments that have demonstrated their investment
performance over an extended period of time.
Three
ICMA RETIREMENT CORPORATION
(b) To invest and reinvest all or any part of the
assets of the Trust in any common, collective or
commingled trust fund that is maintained by a bank
or other institution and that is available to Em-
ployee plans described under sections 457 or 401 of
the Code, or any successor provisions thereto, and
during the period of time that an investment
through any such medium shall exist, to the extent
of participation of the Plan, the declaration of trust
of such common, collective, or commingled trust
fund shall constitute a part of this Plan.
(c) To invest and reinvest all or any part of the
assets of the Trust in any group annuity, deposit
administration or guaranteed interest contract issued
by an insurance company or other financial institu-
tion on a commingled or collective basis with the
assets of any other 457 plan or trust qualified under
section 401(a) of the Code or any other plan de-
scribed in section 401(a) (24) of the Code, and such
contract may be held or issued in the name of the
Plan Administrator, or such custodian as the Plan
Administrator may appoint, as agent and nominee
for the Employer. During the period that an invest-
ment through any such contract shall exist, to the
extent of participation of the Plan, the terms and
conditions of such contract shall constitute a part of
the Plan.
(d) To purchase part interests in real property or in
mortgages on real property, wherever such real
property may be situated, and to delegate to a
property manager or the holder or holders of a
majority interest in such real property or mortgage
on real property the management and operation of
any part interest in such real property or mortgages.
(e) To hold cash awaiting investment and to keep
such portion of the Trust in cash or cash balances,
without liability for interest, in such amounts as may
from time to time be deemed to be reasonable and
necessary to meet obligations under the Plan or
otherwise to be in the best interests of the Plan.
(f) To retain, manage, operate, administer, divide,
subdivide, partition, mortgage, pledge, improve,
alter, demolish, remodel, repair, and develop in any
manner any property, or any part of or partial
interest in any property, real or personal, held in the
Trust, to lease such property for any period of time,
and to grant options to sell, exchange, lease, or
otherwise dispose of any such property, without
regard to restrictions applicable to fiduciaries or
others and without the approval of any court.
(g) To sell for cash or credit, redeem, exchange for
other property, convey, transfer, or otherwise
dispose of any property held in the Trust in any
manner and at any time, by private contract or at
public auction or otherwise, and no other person
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
disposition.
(h) To enter into contracts for or to make commit-
ments either alone or in company with others to
purchase or sell at any future date any property
acquired for the Trust.
(i) To vote or to refrain from voting any stocks',
bonds, or' other securities held in the Trust, to
exercise any other right appurtenant to any securi-
ties or other property held in the Trust, to give
general or special proxies or powers of attorney with
or without power of substitution with respect to
such securities and other property, -to exercise any
conversion privileges, subscription rights, or other
options or privileges with respect to such securities
and other property and make any payments inciden-
tal thereto, and generally to exercise, personally or
by general or limited power of attorney, any of the
powers of an owner with respect to stocks, bonds,
securities, or other property held in the Trust at
any time.
(j) To oppose or to consent to and participate in
any organization, reorganization, consolidation,
merger; combination, readjustment of finances, or
similar arrangement with respect to any corporation,
company, or association, any of the securities of
which are held in the Trust, to do any act with
reference thereto, including the exercise of options,
the making of agreements or subscriptions and the
payment of expenses, assessments, or subscriptions
that may be deemed necessary or advisable in
connection therewith, and to accept, hold; and
retain any securities or other property that may be
so acquired.
Four
45 i Plan Adopttoit Package Retain Docit in eit r
De f erred Corn peit sa t i on Plan Docit ntrit t an d Trust, November 1 996
(k) To deposit any property held in the Trust with
any protective, reorganization, or similar commit-
tee, and to delegate discretionary power thereto and
to pay and agree to pay part of its expenses and
compensation and any assessments levied with
respect to any such property so deposited.
(1) To hold, to authorize the holding of, and to
register any investment to the Trust in the name of
the Plan, the Employer, or any nominee or agent of
any of the foregoing, including the Plan Administra-
tor, or in bearer form, to deposit or arrange for the
deposit of securities in a qualified central depository
even though, when so deposited, such securities may
be merged and held in bulk in the name of the
nominee of such depository with other securities
deposited therein by any other person, and to
organize corporations or trusts under the laws of any
jurisdiction for the purpose of acquiring or holding
title to any property for the Trust, all with or
without the addition of words or other action to
indicate that property is held in a fiduciary or
representative capacity but the books and records of
the Plan shall at all times show that all such invest-
ments are part of the Trust.
(m) Upon such terms as may be deemed advisable
by the Employer or the Plan Administrator, as the
case may be, for the protection of the interests of
the Plan or for the preservation of the value of an
investment, to exercise and enforce by suit for legal
or equitable remedies or by other action, or to
waive any right or claim on behalf of the Plan or
any default in any obligation owing to the Plan, to
renew, extend the time for payment of, agree to a
reduction in the rate of interest on, or agree to any
other modification or change in the terms of any
obligation owing to the Plan, to settle, compromise,
adjust, or submit to arbitration any claim or right in
favor of or against the Plan, to exercise and enforce
any and all rights of foreclosure, bid for property in
foreclosure, and take a deed in lieu of foreclosure
with or without paying-consideration therefor, to
commence or defend suits or other legal proceedings
whenever any interest of the Plan requires it, and to
represent the Plan in all suits or legal proceedings in
any court of law or equity or before any body or
tribunal.
(n) To employ suitable consultants, depositories,
agents, and legal counsel on behalf of the Plan.
(o) To make, execute, acknowledge, and deliver
any and all deeds, leases, mortgages, conveyances,
contracts, waivers, releases, or other instruments in
writing necessary or proper for the accomplishment
of any of the foregoing powers.
(p) To open and maintain any bank account or
accounts in the name of the Plan, the Employer, or
any nominee or agent of the foregoing, including
the Plan Administrator, in any bank or banks.
(q) To do any and all other acts that may be
deemed necessary to carry out any of the powers set
forth herein.
6.03 Taxes and Expenses: All taxes of any and all
kinds whatsoever that may be levied or assessed under
existing or future laws upon, or in respect to the Trust,
or the income thereof, and all commissions or acquisi-
tions or dispositions of securities and similar expenses of
investment and reinvestment of the Trust, shall be paid
from the Trust. Such reasonable compensation of the
Plan Administrator, as may be agreed upon from time to
time by the Employer and the Plan Administrator, and
reimbursement for reasonable expenses incurred by the
Plan Administrator in performance of its duties hereun-
der (including but not limited to fees for legal, account-
ing, investment and custodial services) shall also be paid
from the Trust.
6.04 Payment of Benefits: The payment of benefits
from the Trust in accordance with the terms of the Plan
may be made by -the Plan Administrator, or by any
custodian or other person so authorized by the Em-
ployer to make such disbursement. The Plan Adminis-
trator, custodian or other person shall not be liable with
respect to any distribution of Trust assets made at the
direction of the Employer.
6.05 Investment Funds: In accordance with uniform
and nondiscriminatory rules established by the Employer
and the Plan Administrator, the Participant may direct
his/her Accounts to be invested in one (1) or more
investment funds available under the Plan; provided,
however, that the Participant's investment directions
shall not violate any investment restrictions established
by the Employer. Neither the Employer, the Adminis-
trator, nor any other person shall be liable for any losses
incurred by virtue of following such directions or with
any reasonable administrative delay in implementing
such directions. "
Five
ICMA RETIREMENT CORPORATION
6.06 Valuation of Accounts: As of each Accounting
Date, the Plan assets held in each investment fund
offered shall be valued at fair market value and the
investment income and gains or losses for each fund
shall be determined. Such investment income and gains
or losses shall be allocated proportionately among all
Account balances on a fund-by-fund basis. The alloca-
tion shall be in the proportion that each such Account
balance as of the immediately preceding Accounting
Date bears to the total of all such Account balances as of
that Accounting Date. For purposes of this Article; all
Account balances include the Account balances of all
Participants and Beneficiaries.
6.07 Participant Loan Accounts: Participant Loan
Accounts shall be invested in accordance with Section'
8.03. of the Plan. Such Accounts shall not share in any
investment income and gains or losses of the investment
funds described in Sections 6.05 and 6.06.
6.08 Crediting of Accounts: The Participant's Account
shall reflect the amount and value of the investments or
other property. obtained by the Employer through the
investment of the Participant's Deferred Compensation
pursuant to Sections 6.05 and 6.06. It is anticipated that the
Employer's investments with respect to a Participant will
conform to the investment preference specified in the
-Participant's Joinder Agreement, but nothing herein shall
be construed to require the Employer to make any particu-
lar investment of a Participant's Deferred Compensation.
Each Participant shall receive periodic reports, not less
frequently than annually, showing the then current
value of his/her Account.
6.09 Transfers:
(a) Incoming Transfers: A transfer may be ac-
cepted from an eligible deferred compensation plan
maintained by another employer and credited to a
Participant's Account under the Plan if (I) the
Participant has separated from service with that
employer and become an Employee of the Em-
ployer, and (ii) the other employer's plan provides
that such transfer will be made. The Employer may
require such documentation from the predecessor
plan as it deems necessary to effectuate the transfer,
to confirm that such plan is an eligible deferred'
compensation plan within the meaning of Section
457 of the Code, and to assure that transfers are
provided for under such plan. The Employer may
refuse to accept a transfer in the form of assets other
than cash, unless the Employer' and the Administra-
tor agree to hold such other assets under the Plan.
Any such transferred amount shall.be treated.as a
deferral subject to the limitations of Article V,
except that, for purposes of applying the limitations
of Sections 5.01 and 5.02, an amount deferred
during any taxable year under the plan from which
the transfer is accepted shall be treated as if it has
been deferred under this Plan during such taxable
year and compensation paid by the transferor em=
ployer shall be treated as if it had been paid by the
Employer.
(b) Outgoing Transfers: An amount may be
transferred to an eligible deferred compensation plan
maintained by another employer, and charged to a
Participant's Account under this Plan, if (I) the
Participant has separated from service with the
Employer and become an employee of the other
employer, (ii) the other employer's plan provides
that such transfer will be accepted, and (iii) the
Participant and the employers have signed such
agreements as are necessary to assure that the
Employer's liability to pay benefits to the Partici-
pant has been discharged and assumed by the other
employer. The Employer may require such docu-
mentation from the other plan as it deems necessary
to effectuate the transfer, to confirm that such plan
is an eligible deferred compensation plan within the
meaning of section 457 of the Code, and to assure
that transfers are provided for under such.plan. Such
transfers shall be made, only under such circum-
stances as are permitted under section 457 of the
Code and the regulations thereunder.
6.10 Employer Liability: In no event shall the
Employer's liability to pay benefits to a Participant
under this Plan exceed the value of the amounts cred-
ited to the Participant's Account; neither the Employer
nor the Administrator shall be liable for losses arising
from depreciation or shrinkage in the value of any
investments acquired under this Plan.
Six
45 7 Plan Adoption
Deferred Co in pensation Plan
Article VII. Benefits
Package Retain Document
Docuin cn t and Trust. Novein b e r 1 996
7.01 Retirement Benefits and Election on Separa-
tion from Service: Except as otherwise provided in
this Article VII, the distribution of a Participant's
Account shall commence as of April 1 of the calendar
year after the Plan Year of the Participant's Retirement,
and the distribution of such Retirement benefits shall be
made in accordance with one of the payment options
described in Section 7.02. Notwithstanding the forego-
ing, but subject to the following paragraph of this
Section 7.01, the Participant may irrevocably elect
within 60 days following Separation from Service to
have the. distribution of benefits commence on a fixed
determinable date other than that described in the
preceding sentence which is at least 61 days after Separa-
tion from Service, but not later than April 1 of the year
following the year of the Participant's Retirement or
attainment of age 70-1/2, whichever is later. Notwith-
standing the foregoing provisions of this Section 7.01, no
election to defer the commencement of benefits after a
separation from service shall operate to defer the distribu-
tion of any amount in the Participant's Loan Account in
the event of a default of the Participant's loan.
Effective on or after January 1, 1997, the Participant
may elect to defer the commencement of distribution of
benefits to a fixed determinable date later than the date
described above, but not later than April 1 of the year
following the year of the Participant's retirement or
attainment of age 70-1/2, whichever is later, provided
(a) such election is made after the 61st day following
Separation from Service and before commencement of
distributions and (b) the Participant may make only one
(1) such election. Notwithstanding the foregoing, the
Administrator, in order to ensure the orderly adminis-
tration of this provision, may establish a deadline after
which such election to defer the commencement of
distribution of benefits shall not be allowed.
7.02 Payment Options: As provided in Sections 7.01,
7.04 and 7.05, a Participant or Beneficiary may elect to
have value of the Participant's Account distributed in
accordance with one of the following payment options,
provided that such option is consistent with the limita-
tions set forth in Section 7.03.
(b) One lump-sum payment;
(c) Approximately equal monthly, quarterly, semi-
annual or annual payments, calculated to continue
for a period certain chosen by the Participant.
(d) Annual Payments equal to the minimum distri-
butions required under Section 401(a) (9) of the
Code over the life expectancy of the Participant or
over the life expectancies of the Participant and his
Beneficiary:
(e) Payments equal to payments made by the issuer
of a retirement annuity policy acquired by the
Employer.
(f) A split distribution under which payments under
options (a), (b), (c) or (e) commence or are made at
the same time, as elected by the Participant under
Section 7.01, provided that all payments commence
(or are made) by the latest benefit commencement
date under Section 7.01 and,that once a payment is
made subsequent payments will be made in substan-
tially nonincreasing amounts.
(g) Any payment option elected by the Participant
and agreed to by the Employer and Administrator,
provided- that such option must provide for substan-
tially nonincreasing payments for any period after
the benefit commencement date under Section 7.01.
A Participant's or Beneficiary's selection of a payment
option made after December 31„1995; under Subsec-
tions (a), (c), or (g) above may include the selection of
an automatic annual cost-of-living increase. Such
increase will be based on the rise in the Consumer Price
Index for All Urban Consumers (CPI-U) from the third
quarter of the last year in which a cost-of-living in-
crease was provided to the third quarter of the current
year. Any increase will be made in periodic payment
checks beginning the following January. The first cost-
of-living increase will be based on the rise in the CPI-U
from the third quarter of 1995 to the third quarter of
1996, and will be applied to amounts paid beginning
January 1997.
A Participant's or Beneficiary's election of a payment
(a) Equal monthly, quarterly, semi-annual or annual option must be made at least 30 days before the pay-
payments in an amount chosen by the Participant, ment of benefits is to commence. If a Participant or
continuing until his/her Account is exhausted; Beneficiary fails to make a timely election of a payment
option, benefits shall be paid monthly under option (c)
Seven
ICMA RETIREMENT CORPORATION
above for a period of five years or such shorter period -of
time necessary to ensure that the amount of any install-
ment is not less than $1,200 per year, without the
inclusion of a cost-of-living increase.
7.03 Limitation on Options: No payment option may
be selected by a Participant under subsections 7.02(a) or
(c) unless the amount of any installment is not less than
$1,200 per year. No payment option may be selected
by a Participant or Beneficiary under Sections 7.02,
7.04, or 7.05 unless it satisfies the requirements of
Sections 401(a)(9) and 457(d)(2) of the Code, including
that payments commencing before the death of the
Participant shall satisfy the incidental death benefits
requirement under section 457(d)(2)(B)(i)(1). A cost-of-
living increase included as part of a payment option
selected under Section 7.02 shall not be considered to
fail to satisfy the requirement under section 457(d)(2)(b)
that any distribution made over a period of more than 1
year can only be made in substantially nonincreasing
amounts. Unless otherwise elected by the Participant
(or spouse, in the case of distributions described in
Section 7.05 below) by the time distributions are
required to begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the
Participant (or spouse) and shall apply to all subsequent
years. The life expectancy of a nonspouse Beneficiary
may not be recalculated.
7.04 Post-retirement Death Benefits:
(a) Should the Participant die after he/she has
begun to receive benefits.under a payment option,
the remaining payments, if any, under the payment
option shall be payable to the Participant's Benefi-
ciary within the 30-day period commencing with
the 61st day after the Participant's death, unless the
Beneficiary elects payment under a different pay-
ment option that is available under Section 7.02
within 60 days of the Participant's death. Any
different payment option elected by a Beneficiary
under this section must provide for payments at a
rate that is at least as rapid under the payment
option that wa' applicable to the Participant. In no
event shall the Employer or Administrator be liable
to the Beneficiary for the amount of any payment
made in the name of the Participant before
the Administrator receives proof of death of the
Participant.
(b) If the designated Beneficiary does not continue
to live for the remaining period of payments under
.the payment option, then the commuted value of
any remaining payments under the payment option
shall be paid in a lump sum to the estate of the.
Berieficiary. In the event that the Participant's estate
is the Beneficiary, the commuted value of any
remaining payments under the payment option shall
be paid to the estate in a lump sum.
7.05 Pre-retirement Death Benefits:
(a) Should the Participant die before he has begun
to receive the benefits provided by Section 7.01, the
value of the Participant's Account shall be payable
to the Beneficiary commencing within the 30-day
period commencing on the 91st day after the
Participant's death, unless the Beneficiary elects a
different fixed or determinable benefit commence-
ment date within 90 days of the Participant's death.
Such benefit commencement date shall be not later
than the later of (I) December 31 of the year fol-
lowing the year of the Participant's death, or (ii) if
the Beneficiary is the Participant's spouse, Decem-
ber 31 of the year in which the Participant would
have attained age 70-1/2.
(b) Unless a Beneficiary elects a different payment
option prior to the benefit commencement date,
death benefits under this Section shall be paid in
approximately equal annual installments over five
years, or over such shorter period as may be neces-
sary to assure that the amount of any annual install-
ment is not less than $3,500. A Beneficiary shall be
treated as if he/she were a Participant for purposes
of determining the payment options available under
Section 7.02, provided, however, that the payment
option chosen by the Beneficiary must provide for
payments to the Beneficiary over a period no longer
than the life expectancy of the Beneficiary, and
provided that such period may not exceed (15) years
if the Beneficiary is not the Participant's spouse.
(c) In the event that the Beneficiary dies before the
payment of death benefits has commenced or been
completed, the remaining-value of the Participant's
Account shall be paid to the estate of the Benefi-
ciary in a lump sum. In the event that the
Participant's estate is the Beneficiary, payment shall
be made to the estate in a lump sum.
Eight
4 5 7 PI a n A d op t t o n Package R e to i n Doru to c n t
Deferred Compensation Plan Docuin cnt and Trust, N ovcin bcr 1996
7.06 Unforeseeable Emergencies:
(a) In the event an unforeseeable emergency occurs,
a Participant may apply to the Employer to receive
that part of the value of his/her Account that is
reasonably needed to satisfy the emergency need. If
such an application is approved by the Employer,
the Participant shall be paid only such amount as the
Employer deems necessary to meet the emergency
need, but payment shall not be made to the extent
that the financial hardship may be relieved through
cessation of deferral under the Plan, insurance or
other reimbursement, or liquidation of other assets
to the extent such liquidation would not itself cause
severe financial hardship.
(b) An unforeseeable emergency shall be deemed to
involve only circumstances of severe financial
hardship to the Participant resulting from a sudden
unexpected illness, accident, or disability of the
Participant or of a dependent (as defined in section
152(a) of the Code) of the Participant, loss of the
Participant's property due to casualty, or other
similar and extraordinary unforeseeable circum-
stances arising as a result of events beyond the
control of the Participant. The need to send a
Participant's child to college or to purchase a new
home shall not be considered unforeseeable emer-
gencies. The determination as to whether such an
unforeseeable emergency exists shall be based on the
merits of each individual case.
7.07 Transitional Rule for Pre-1989 Benefit Elec-
tions: In the event that, prior to January 1, 1989, a
Participant or Beneficiary has commenced receiving
benefits under a payment option or has irrevocably elected
a payment option or benefit commencement date, then that
payment option or election shall remain in effect notwith-
standing any other provision of the Plan.
7.08 De Minimis Accounts: Notwithstanding the
foregoing provisions of this Article, if the value of a
Participant's Account does not exceed $3,500 and (a) no
amount has been deferred under the Plan with respect
to the Participant during the 2-year period ending on
the date of the distribution and (b) there has been no
prior distribution under the Plan to the Participant
pursuant to this Section 7.08, the Participant may elect
to receive or the Employer may distribute the Participant's
entire Account without the consent of the Participant.
Such distribution shall be made in a lump sum.
Article Vill. Loans to Participants
8.01 Availability of Loans to Participants:
(a) Effective January 1, 1997, the Employer may
elect to make loans available to Participants in this
Plan. If the Employer has elected to make loans
available to Participants, a Participant may apply for
a loan from the Plan subject to the limitations and
other provisions of this Article.
(b) The Employer shall establish written guidelines
governing the granting of loans, provided that such
guidelines are approved by the Plan Administrator
and are not inconsistent with the provisions of this
Article, and that loans are made available to all
Participants on a reasonably equivalent basis.
8.02 Terms and Conditions of Loans to Participants:
Any loan by the Plan to a Participant under Section 8.01 of the
Plan shall satisfy the following requirements:
(a) Availability. Loans shall be made available to
all Participants on a reasonably equivalent basis.
(b) Interest Rate. Loans must be adequately
secured and bear a reasonable interest rate.
(e) Loan Limit. No Participant loan shall exceed
the present value of the Participant's Account.
(d) Foreclosure. In the event of default on any
installment payment, the outstanding balance of the
loan shall be a deemed distribution. In such event,
an actual distribution of a plan loan offset amount
will not occur until a distributable event occurs in
the Plan.
(e) Reduction of Account. Notwithstanding any
other provision of this Plan, the portion of the
Participant's Account balance used as a security
interest held by the Plan by reason of a loan out-
standing to the Participant shall be taken into
account for purposes of determining the amount of
the Account balance payable at the time of death or
distribution, but only if the reduction is used as
repayment of the loan.
Nine
ICMA RETIREMENT CORPORATION
(f) Amount of Loan. At the time the loan is made,
the principal amount of the loan plus the outstanding
balance (principal plus accrued interest) due on any
other outstanding loans to the Participant from the Plan
and from all other plans of the Employer that are
qualified employer plans under section 72(p)(4) of the
Code shall not exceed the least o£
(1) $50,000, reduced by the excess (if any) of
(a) The highest outstanding balance of loans
from the Plan during the one (1) year
period ending on the day before the date
on which the loan is made, over
(b) The outstanding balance of loans from the
Plan on the date on which such loan is
made; or
(2) One-half of the value of the Participant's
interest in all of his/her Accounts under
this Plan.
(g) Application for Loan. The Participant must
give the Employer adequate written notice, as
determined by the Employer, of the amount and
desired time for receiving a loan. No more than
one (1) loan may be made by the Plan to a Partici-
pant in any calendar year. No loan shall be ap-
proved if an existing loan from the Plan to the
Participant is in default to any extent.
(h) Length of Loan. Any loan issued shall require
the Participant to repay the loan in substantially
equal installments of principal and interest, at least
monthly, over a period that does not exceed five (5)
years from the date of the loan; provided, however,
that if the proceeds of the loan are applied by the
Participant to acquire any dwelling unit that is to be
used within a reasonable time (determined at the
time the loan is made) after the loan is made as the
principal residence of the Participant, the five (5)
year limit shall not apply. In this event, the period
of repayment shall not exceed a reasonable period
determined by the Employer. Principal installments
and interest payments otherwise due may be sus-
pended for up to one (1) year during an authorized
leave of absence, if the promissory note so provides,
but not beyond the original term permitted under
this Subsection (h), with a revised payment schedule
(within such term) instituted at the end of such
period of suspension.
(i) Prepayment. The Participant shall be permitted
to repay the loan in whole or in part at any time
prior to maturity, without penalty.
(j) Promissory Note. The loan shall be evidenced
by a promissory note executed by the Participant
and delivered to the Employer, and shall bear
interest at a reasonable rate determined by the
Employer.
(k) Security. The loan shall be secured by an
assignment of the Participant's right, title and
interest in and to his/her Account.
(1) Assignment or Pledge. For the purposes of
paragraphs (0 and (g), 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.
(m) Other Terms and Conditions. The Employer
shall fix such other terms and conditions of the loan
as it deems necessary to comply with legal require-
ments, to maintain the qualification of the Plan and
Trust under section 457 of the Code, or to prevent
the treatment of the loan for tax purposes as a
distribution to the Participant. The Employer, in
its discretion for any reason, may fix other terms
and conditions of the loan, not inconsistent with
the provisions of this Article and section 72(p) of
the-Code.
8.03 Participant Loan Accounts:
(a) Upon approval of a loan to a Participant by the
Employer, an amount not in excess of the loan shall
be transferred from the Participant's other invest-
ment fund(s), described in Section 6.05 of the Plan,
to the Participant's Loan Account as of the Account-
ing Date immediately preceding the agreed upon
date on which the loan is to be made.
(b) The assets of a Participant's Loan Account may
be invested and reinvested only in promissory notes
received by the Plan from the Participant as consid-
eration for a loan permitted by Section 8.01 of the
Plan or in cash. Uninvested cash balances in a
Ten
457 Plan Adoption Package Retain Document
Deferred Compensation Platt Document and Trust, November 1996
Participant's Loan Account shall not bear interest.
Neither the Employer, the Administrator, nor any
other person shall be liable for any loss, or by reason
of any breach, that results from the Participant's
exercise of such control.
(c) Repayment of principal and payment of interest
shall be made by payroll deduction or, where
repayment cannot be made by payroll deduction, by
check, and shall be invested in one (1) or more
other investment funds, in accordance with Section
6.05 of the Plan, as of the next Accounting Date
after payment thereof to the Trust. The amount so
invested shall be deducted from the Participant's
Loan Account.
(d) The Employer shall have the authority to
establish other reasonable rules, not inconsistent
with the provisions of the Plan, governing the
establishment and maintenance of Participant Loan
Accounts.
Article IX. Non-assignability
9.01 In General: Except as provided in Article VIII
and Section 9.02, no Participant or Beneficiary shall
have any right to commute, sell, assign, pledge, transfer
or otherwise convey or encumber the right to receive
any payments hereunder, which payments and rights
are expressly declared to be non-assignable and
non-transferable.
9.02 Domestic Relations Orders:
(a) Allowance of Transfers: To the extent re-
quired under final judgement, decree, or order
(including approval of a property settlement agree-
ment) made pursuant to a state domestic relations
law, any portion of a Participant's Account may be
paid or set aside for payment to a spouse, former
spouse, or child of the Participant. Where necessary
to carry out the terms of such an order, a separate
Account shall be established with respect to the
spouse, former spouse, or child who shall be en-
titled to make investment selections with respect
thereto in the same manner as the Participant; any
amount so set aside for a spouse, former spouse, or
child shall be paid out in a lump sum at the earliest
date that benefits may be paid to the Participant,
unless the order directs a different time or form of
payment. Nothing in this Section shall be construed
to authorize any amount to be distributed under the
Plan at a time or in a form that is not permitted
under Section 457 of the Code. Any Payment made
to a person other than the Participant pursuant to
this Section shall be reduced by required income tax
withholding; the fact that payment is made to a
person other than the Participant may not prevent
such payment from being includible in the gross
income of the Participant for withholding and
income tax reporting purposes.
(b) Release from Liability to Participant: The
Employer's liability to pay benefits to a Participant
shall be reduced to the extent that amounts have
been paid or set aside for payment to a spouse,
former spouse, or child pursuant to paragraph (a) of
the Section. No such transfer shall be effectuated
unless the Employer or Administrator has been
provided with satisfactory evidence that the Em-
ployer and the Administrator are released from any
further claim by the Participant with respect to such
amounts. The Participant shall be deemed to'have
released the Employer and the Administrator from
any claim with respect to such amounts, in any-case
in which (i) the Employer or Administrator has been
served with legal process or otherwise joined in a
proceeding relating to such transfer, (ii) the Partici-
pant has been notified of the pendency of such
proceeding in the manner prescribed by the law of
the jurisdiction in which the proceeding is pending
for service of process in such action or by mail from
the Employer or Administrator to the Participant's
last known mailing address, and (iii) the Participant
fails to obtain an order of the court in the proceed-
ing relieving the Employer or Administrator from
the obligation to comply with the judgment, decree,
or order.
(c) Participation in Legal Proceedings: The
Employer and Administrator shall not be obligated
to defend against or set aside any judgement, decree,
or order described in paragraph (a) any legal-order
relating to the garnishment of a Participant's ben-
efits, unless the full expense of such legal action is
borne by the Participant. In the event that the
Participant's action (or inaction) nonetheless causes
the Employer or Administrator to incur such ex-
pense, the amount of the expense may be charged
against the Participant's Account and thereby reduce
the Employer's obligation to pay benefits to the
Eleven
ICMA RETIREMENT CORPORATION
Participant. In the course of any proceeding relating
to divorce, separation, or child support, the Em-
ployer and Administrator shall be authorized to
disclose information relating to the Participant's
Account to the Participant's spouse, former spouse,
or child (including the legal representatives of the
spouse, former spouse, or child), or to a court.
Article X. Relationship to other Plans
- - and Employment Agreements
This Plan serves in addition to any other retirement,
pension, or benefit plan or system presently in existence
or hereinafter established for the benefit of the
Employer's employees, and participation hereunder shall
not affect benefits receivable under any such plan or
system. Nothing contained in this Plan shall be deemed
to constitute an employment contract or agreement
between any Participant and the Employer or to give
any Participant the right to be retained in the employ of
the Employer. Nor shall anything herein be construed
to modify the terms of any employment contract or
agreement between a Participant and the Employer.
Article XI. Amendment or Termination
of Plan
The Employer may at any time amend this Plan pro-
vided that it transmits such amendment in writing to the
Administrator at least 30 days prior to the effective date
of the amendment. The consent of the Administrator
shall not be required in order for such amendment to
become effective, but the Administrator shall be under
no obligation to continue acting as Administrator
hereunder if it disapproves of such amendment. The
Employer may at any.time terminate this Plan.
The Administrator may at any time propose an amend-
ment to the Plan by an instrument in writing transmit-
ted to the Employer at least 30 days before the effective
date of the amendment. Such amendment shall become
effective unless, within such 30-day period, the Em-
ployer notifies the Administrator in writing that it
disapproves such amendment, in which case such
amendment shall not become effective. In the event
of such disapproval, the Administrator shall be under
no obligation to continue acting as Administrator
hereunder.
Except as may be required to maintain the status of the
Plan as an eligible deferred compensation plan under
section 457 of the Code or to comply with other
applicable laws,- no amendment or termination of the
Plan shall divest any Participant of any rights with
respect to compensation deferred before the date of the
amendment or termination.
Article XII. Applicable Law
This Plan and Trust shall be construed under the laws of
the state where the Employer is located and is estab-
lished with the intent that it meet-the requirements of
an "eligible deferred compensation plan" under Section
457 of the Code, as amended. The provisions of this
Plan and Trust shall be interpreted wherever possible in
conformity with the requirements of that section.
Article XII1. Gender and Number
The masculine pronoun, whenever used herein, shall
include the feminine -pronoun, and the singular shall
include the plural, except where the context requires
otherwise.
Twelve
4 7 PI an Adoption P a c k a g c Retain Document
DccI a ra t t o it o,/' 7'rit s r o f tIt c I CAl A Re ti rem en t T rit s t, 1a it it a ry 1 99.1
DECLARATION OF TRUST
OF ICMA RETIREMENT TRUST
(k) Public Employer Trustees. Public Employers who serve
as trustees of the Qualified Plans.
Article I. Name and Definitions
Section 1.1 Name: The Name of the Trust created hereby is
the ICMA Retirement Trust.
Section 1.2 Definitions: Wherever they are used herein, the
following terms shall have the following respective meanings:
(a) By-laws. The By-laws referred to in Section 4.1 hereof, as
amended from time to time.
(b) Deferred Compensation Plan. A deferred
compensation plan established and maintained by a Public
Employer for the purpose of providing retirement income and
other deferred benefits to its employees in accordance with the
provision of section 457 of the Internal Revenue Code of
1986, as amended.
(c) Employees. Those employees who participate in
Qualified Plans.
(d) Employer Trust. A trust created pursuant to an
agreement between RC and a Public Employer, or an
agreement between RC and a Public Employer for
administrative services that is not a trust, in either case for the
purpose of investing and administering the funds set aside by
such Employer in connection with its Deferred Compensation
agreements with its employees or in connection with its
Qualified Plan.
(e) Investment Contract. A non-negotiable contract
entered into by the Retirement Trust with a financial
institution that provides for a fixed rate of return on
investment.
(f) ICMA. The International City/County Management
Association.
(g) ICMA/RC Trustees. Those Trustees elected by the
Public Employers who, in accordance with the provisions of
Section 3.1(a) hereof, are also members of the Board of
Directors of ICMA or RC (or in the case of RC, former
members of the RC Board).
(h) Investment Adviser. The Investment Adviser that enters
into a contract with the Retirement Trust to provide advice
with respect to investment of the Trust Property.
(i) Portfolios. The separate commingled accounts of
investment established by the Investment Adviser to the
Retirement Trust, under the supervision of the Trustees, for
the purpose of providing investments for the Trust Property.
0) Public Employee Trustees. Those Trustees elected by
the Public Employers who, in accordance with the provision
of Section 3.1(a) hereof, are full-time employees of Public
Employers.
(1) Public Employer. A unit of state or local government, or
any agency or instrumentality thereof, that has adopted a
Deferred Compensation Plan or a Qualified Plan and has
executed this Declaration of Trust.
(m) Qualified Plan. A plan sponsored by a Public Employer
for the purpose of providing retirement income to its
employees which satisfies the qualification requirements of
Section 401 of the Internal Revenue Code, as amended.
(n) RC. The International City Management Association
Retirement Corporation.
(o) Retirement Trust. The Trust created by this Declaration
of Trust.
(p) Trust Property. The amounts held in the Retirement Trust
on behalf of the Public Employers in connection with Deferred
Compensation Plans and on behalf of the Public Employer
Trustees for the exclusive benefit of Employees pursuant to
Qualified Plans. The Trust Property shall include any income
resulting from the investment to the amounts so held.
(q) Trustees. The Public Employee Trustees and ICMA/RC
Trustees elected by the Public Employers to serve as members
of the Board of Trustees of the Retirement Trust.
Article 11. Creation and Purpose of the Trust;
Ownership of Trust Property
Section 2.1 Creation: The Retirement Trust was created by
the execution of this Declaration of Trust by the initial
Trustees and Public Employers and is established with respect
to each participating Public Employer by adoption of this
Declaration of Trust.
Section 2.2 Purpose: The purpose of the Retirement Trust
is to provide for the commingled investment of funds held by
the Public Employers in connection with their Deferred
Compensation and Qualified Plans. The Trust Property shall
be invested in the Portfolios, in Investment Contracts, and in
other investments recommended by the Investment Adviser
under the supervision of the Board of Trustees. No part of the
Trust Property will be invested in securities issued by Public
Employers.
Section 2.3 Ownership of Trust Property: The Trustees
shall have legal title to the Trust Property. The Public Em-
ployers shall be the beneficial owners of the portion of the
Trust Property allocable to the Deferred Compensation Plans.
The portion of the Trust Property allocable to the Qualified
Plans shall be held for the Public Employer Trustees for the
exclusive benefit of the Employees.
Thirteen
ICMA RETIREMENT CORPORATION.
Article 111. Trustees
Section 3.1 Number and Qualification of Trustees:
(a)The Board of Trustees shall consist of nine Trustees. Five of
the Trustees shall be full-time employees of a Public Employer
(the Public Employee Trustees) who are authorized by such
Public Employer to serve as Trustee. The remaining four
Trustees shall consist of two persons who, at the time of
election to the Board of Trustees, are members of the Board of
Directors of ICMA and two persons who, at the time of
election, are members or former-members of the Board of
Directors of RC (the ICMA/RC Trustees). One of the
Trustees who is a director of ICMA, and one of the Trustees
who is a director of RC, shall, at the time of election, be full-
time employees of Public Employers. (b) No person may
serve as a Trustee for more than two terms in any ten-year
period.
Section 3.2 Election and Term: (a) Except for the Trust-
ees appointed to fill vacancies pursuant to Section 3.5 hereof,
the Trustees shall be elected by a vote of a majority of the
voting Public Employers in accordance with the procedures set
forth in the By-Laws. (b) At the first election of Trustees,
three Trustees shall be elected for a term of three years, three
Trustees shall be elected for a term of two years and three
Trustees shall be elected for a term of one year. At each
subsequent election, three Trustees shall be elected, each to
serve for a term of three years and until his or her successor is
elected and qualified.
Section 3.3 Nominations: The Trustees who are full-time
employees of Public Employers shall serve as the Nominating
Committee for the Public Employee Trustees. The Nominating
Committee shall choose candidates for Public Employee Trustee
in accordance with-the procedures set forth in the By-Laws.
Section 3.4 Resignation and Removal: (a) Any Trustee
may resign as Trustee (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee
and delivered to the other Trustees and such resignation shall
be effective upon such delivery, or at a later date according to
the terms' of the instrument. Any of the Trustees may be
removed for cause, by a vote of a majority of the Public
Employers. (b) Each Public Employee Trustee shall resign his
or her position as Trustee within sixty days of the date on
which he or she ceases to be a full-time employee of a Public
Employer.
Section 3.5 Vacancies: The term of office of a Trustee shall
terminate and a vacancy shall occur in the event his or her
death, resignation, removal, adjudicated incompetence or other
incapacity to perform the duties of the office of a Trustee. In
the case of a vacancy, the remaining Trustees shall appoint
such person as they in their discretion shall see fit (subject to
the limitations set forth in this Section), to serve for the
unexpired portion of the term of the Trustee who has resigned
or otherwise ceased to be a Trustee. The appointment shall be
made by a written instrument signed by a majority of the
Trustees. The person appointed must be the same type of
Trustee (i.e., Public Employee Trustee or ICMA/RC Trustee)
as the person who has ceased to be a Trustee. An appointment
of a Trustee may be made in anticipation of a vacancy to occur
at a later date by reason of retirement or resignation, provided
that such appointment shall not become effective prior to such
retirement or resignation. Whenever a vacancy shall occur,
until such vacancy is filled as provided in this Section 3.5, the
Trustees in office, regardless of their number, shall have all the
powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Declaration. A written
instrument certifying the existence of a vacancy signed by a
majority of the Trustees shall be conclusive evidence of the
existence of such vacancy.
Section 3.6 Trustees Serve in Representative Capacity:
By executing this Declaration, each Public Employer agrees
that the Public Employee Trustees elected by the Public
Employers are authorized to act as agents and representatives of
the Public Employers collectively.
Article IV. Powers of Trustees
Section 4.1 General Powers: The Trustees shall have the
power to conduct the business of the Trust and to carry on its
operations. Such power shall include, but shall not be limited
to, the power to:
(a) receive the Trust Property from the Public Employers,
Public Employer Trustees or the trustee or administrator
under any Employer Trust;
(b) enter into a contract with an Investment Adviser
providing, among other things, for the establishment and
operation of the Portfolios, selection of the Investment
Contracts in which the Trust Property may be invested,
selection of the other investments for the Trust Property
and the payment of reasonable fees to the Investment
Adviser and to any sub-investment adviser retained by
the Investment Adviser;
(c) review annually the performance of the Investment
Adviser and approve annually the contract with such
Investment Adviser;
(d) invest and reinvest the Trust Property in the Portfolios,
the Investment Contracts and in any other investment
recommended by the Investment Adviser, but not
including securities issued by Public Employers,
provided that if a Public Employer has directed that its
monies be invested in one or more specified Portfolios
or in an Investment Contract, the Trustees of the
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457 Plan Adoption Package Retain Document
Declaration of Trust of the ICAl A Retirement Trust, January 1995
Retirement Trust shall invest such monies in accordance
with such directions;
(e) keep such portion of the Trust Property in cash or cash
balances as the Trustees, from time to time, may deem
to be in the best interest of the Retirement Trust created
hereby without liability for interest thereon;
(f) accept and retain for such time as they may deem
advisable any securities or other property received or
acquired by them as Trustees hereunder, whether or not
such securities or other property would normally be
purchased as investment hereunder;
(g) cause any securities or other property held as part of the
Trust Property to be registered in the name of the
Retirement Trust or in the name of a nominee, and to
hold any investments in bearer form, but the books and
records of the Trustees shall at all times show that all
such investments are a part of the Trust Property;
(h) make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all
other instruments that may be necessary or appropriate
to carry out the powers herein granted;
(i) vote upon any stock, bonds, or other securities; give
general or special proxies or powers of attorney with or
without power of substitution; exercise any conversion
privileges, subscription rights, or other options, and
make any payments incidental thereto; oppose, or
consent to, or otherwise participate in, corporate
reorganizations or to other changes affecting corporate
securities, and delegate discretionary powers and pay any
assessments or charges in connection therewith; and
generally exercise any of the powers of an owner with
respect to stocks, bonds, securities or other property
held as part of the Trust Property;
(j) enter into contracts or arrangements for goods or
services required in connection with the operation of
the Retirement Trust, including, but not limited to,
contracts with custodians and contracts for the provision
of administrative services;
(k) borrow or raise money for the purposes of the
Retirement Trust in such amount, and upon such terms
and conditions, as the Trustees shall deem advisable,
provided that the aggregate amount of such borrowings
shall not exceed 30% of the value of the Trust Property.
No person lending money to the Trustees shall be
bound to see the application of the money lent or to
inquire into its validity, expediency or propriety or any
such borrowing;
(1) incur reasonable expenses as required for the
operation of the Retirement Trust and deduct such
expenses from of the Trust Property;
(m)pay expenses properly allocable to the Trust Property
incurred in connection with the Deferred
Compensation Plans, Qualified Plans, or the Employer
Trusts and deduct such expenses from that portion of
the Trust Property to which such expenses are properly
allocable;
(n) pay out of the Trust Property all real and personal
property taxes, income taxes and other taxes of any and
all kinds which, in the opinion of the Trustees, are
properly levied, or assessed under existing or future laws
upon, or in respect of, the Trust Property and allocate
any such taxes to the appropriate accounts;
(o) adopt, amend and repeal the By-laws, provided that
such By-laws are at all rimes consistent with the terms of
this Declaration of Trust;
(p) employ persons to make available interests in the
Retirement Trust to employers eligible to maintain a
Deferred Compensation Plan under Section 457 or a .
Qualified Plan under Section 401 of the Internal
Revenue Code, as amended;
(q) issue the Annual Report of the Retirement Trust, and
the disclosure documents and other literature used by
the Retirement Trust;
(r) in addition to conducting the investment program
authorized in Section 4.1(d), make loans, including the
purchase of debt obligations, provided that all such loans
shall bear interest at the current market rate;
(s) contract for, and delegate any powers granted hereunder
to, such officers, agents, employees, auditors and ,
attorneys as the Trustees may select, provided that the
Trustees may not delegate the powers set forth in
paragraphs (b), (c) and (o) of this Section 4.1 and may
not delegate any powers if such delegation would violate
their fiduciary dunes;
(t) provide for the indemnification of the Officers and
Trustees of the Retirement Trust and purchase fiduciary
insurance;
(u) maintain books and-records, including separate accounts
for each Public Employer, Public Employer Trustee or
Employer Trust and such additional separate accounts as
are required under, and consistent with, the Deferred
Compensation or Qualified Plan of each Public
Employer; and
(v) do all such acts, take all such proceedings, and exercise
all such rights and privileges, although not specifically-
mentioned herein, as the Trustees may deem necessary
or appropriate to administer the Trust Property and to
carry out the purposes of the Retirement Trust. .
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ICMA RETIREMENT CORPORATION
Section 4.2 Distribution of Trust Property: Distributions
of the Trust property shall be made to, or on behalf of, the
Public Employer or Public Employer Trustee, in accordance
with the terms of the Deferred Compensation Plans, Qualified
Plans or Employer Trusts. The Trustees of the Retirement
Trust shall be fully protected in making payments in accor-
dance with the directions of the Public Employers, Public
Employer Trustees or trustees or administrators of any Em-
ployer Trust without ascertaining whether such payments are
in compliance with the provisions of the applicable Deferred
Compensation or Qualified Plan or Employer Trust.
Section 4.3 Execution of Instruments: The Trustees may
unanimously designate any one or more of the Trustees to
execute any instrument or document on behalf of all, including
but not limited to the signing or endorsement of any check
and the signing of any applications, insurance and other ,
contracts, and the action of such designated Trustee or Trust-
ees shall have the same force and effect as if taken by all the
Trustees.
Article V. Duty of Care-and Liability of Trustees
Section 5.1 Duty of Care: In exercising the powers herein-
before granted to the Trustees, the Trustees shall perform all
acts within their authority for the exclusive purpose of provid-
ing benefits for the Public Employers in connection with
Deferred Compensation Plans and Public Employer Trustees
pursuant to Qualified Plans, and shall.perform such acts with
the care, skill, prudence and diligence in the circumstances
then prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.
Section 5.2 Liability: The Trustees shall not be liable for any
mistake of judgment or other action taken in good faith, and
for any action taken or omitted in reliance in good faith upon
the books of account or other records of the Retirement Trust,
upon the opinion of counsel, or upon reports made to the
Retirement Trust by any of its officers, employees or agents or
by the Investment Adviser or any sub-investment adviser,
accountant, appraiser or other expert or consultant selected
with reasonable care by the Trustees, officers or employees of
the Retirement Trust. The Trustees shall also not be liable for
any loss sustained by the Trust Property by reason of any
investment made in good faith and in accordance with the
standard of care set forth in Section 5.1.
Section 5.3 Bond: No Trustee shall be obligated to give any
bond or other security for the performance of any of his or her
duties hereunder.
Article VI. Annual Report to Shareholders
The Trustees shall annually submit to the Public Employers
and Public Employer Trustees a written report of the transac-
tions of the Retirement Trust, including financial statements
which shall be certified by independent public accountants
chosen by the Trustees..
Article VII. Duration or Amendment
of Retirement Trust
Section 7.1 Withdrawal: A Public Employer or Public
Employer Trustee may, at any time, withdraw from this
Retirement Trust by delivering to the Board of Trustees a
written statement of withdrawal. In such statement, the Public
Employer or Public Employer Trustee shall acknowledge that
the Trust Property allocable to the Public Employer is derived
from compensation deferred by employees of such Public
Employer pursuant to its Deferred Compensation Plan or from
contributions to the accounts of Employees pursuant to a
Qualified Plan, and shall designate the financial institution to
which such property.shall be transferred by the Trustees of the
Retirement Trust or by the trustee or administrator under an
Employer Trust.
Section 7.2 Duration: The Retirement Trust shall continue
until terminated by the vote of a majority of the Public
Employers, each casting one vote. Upon termination, all of
the Trust Property shall be paid out to the Public Employers,
Public Employer Trustees or the trustees or administrators of
the Employer Trusts, as appropriate.
Section 7.3 Amendment: The Retirement Trust may be
amended by the vote of a majority of the Public Employers,
each casting one vote.
Section 7.4 Procedure: A resolution to terminate or amend
the Retirement Trust or to remove a Trustee shall be submit-
ted to a vote of the Public Employers if (i) a majority of the
Trustees so direct, or; (ii) a petition requesting a vote signed by
not less that 25 percent of the Public Employers, is submitted
to the Trustees.
Article VIII. Miscellaneous
Section 8.1 Governing Law: Except as otherwise required
by state or local law, this Declaration of Trust and the Retire-
ment Trust hereby created shall be construed and regulated by
the laws of the District of Columbia.
Section 8.2 Counterparts: This Declaration may be
executed by the Public Employers and Trustees in two or
more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and
the same instrument.
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