TC Res. No. 2008-38 Adopting a restated and amended plan document for the TOA public employees money purchase pension planTOWN OF AVON, COLORAOD
RESOLUTION NO. 08-38
SERIES OF 2008
A RESOLUTION ADOPTING A RESTATED AND AMENDED PLAN
DOCUMENT FOR THE TOWN OF AVON PUBLIC 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 Public 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 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 11th day of November, 2008.
OF,qTO O AVON, LORADO
E A L ' Ronald C. Wolfe, Mayor
•
TOWN OF AVON PUBLIC EMPLOYEES
MONEY PURCHASE PENSION PLAN
Restated to Include Amendments
Through November 11, 2008
0
TOWN OF AVON PUBLIC EMPLOYEES •
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
I-1
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 Disabili....................................:..:.............................I-2
1.10 Employee I-2
1.11 Employer I-3
1 0
1.12. Entry Date...:.. I-3
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) ouse I-5
1.28 Trustee I-5
1.29 Valuation Date I-6
1.30 Voluntary After-Tax Contribution I-6
1.31 Year of Service I-6
•
Page
ARTICLE II
Eligibility Requirements
2.1 Participation .............................................................................................II-1
2.2 Employment Rights II-1
2.3 Change in Classification of Employment ................................................II-1
ARTICLE III
Employer Contributions
•
3.1
Matching Employer Contributions ..........................................................III-1
3.2
[INTENTIONALLY 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 I 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
WA1411232MABID/LRB 03/04/08 ii
Page
6.4 Termination of Employment Before Retirement,
Disability or Death VI-1
6.5
Claims Procedures
. VI-1
6.6
Disposition of Unclaimed Payments
. VI-2.
ARTICLE VII
Payments
7.1
Commencement of Payments
VII-1
7.2
Method of Payment..
II-1
.
7.3
Minimum Distributions
VII-2
7.4
Direct Rollover
VII=2
7.5
Mandatory Distributions
VII-3
7.6
In-Service Withdrawals
VII -4
7.7
Distribution to IRA of Nonspouse Beneficiary
VII-5
ARTICLE VIII
Vesting
8.1
Employee Contributions
. III-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-3 .
8.7
Amendment of Vesting Schedule
VIII-3
ARTICLE IX
Limitations on Allocations
9.1 Maximum Limits on Allocations IX-1
9.2 Participation in This Plan and a Defined Benefit,Plan. (Not Effective
for Plan Years Beginning on or After January, 1 2000 IX-2
ARTICLE X.,
Administration
10.1 Employer ..................................................................................................X-1.
10.2 Plan Administrator .....................:.....X=1
10.3 Trustee
10.4 Administrative Fees and Expenses ..........................................................X-3
•
•
MVV 1411232MABID/LRB 03/04/08 iii
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...:...............: . ;
11.2
Control of Plan Assets
I-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
12.5
•
Interest on Loans
Security
XII-1
XII4
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
Special Provisions During Qualified Military Leave
XII-2
12.11
Loan Policy
XII-3
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=1
14.4 Mergers and. Consolidations XIVV2
MvA1411232MABID/LRB 03/04/08 iv
Page
ARTICLE XV.. .
Minimum Distribution Requirements
15.1
General Rules
XV4
15.2
Time and-Manner of Distribution
XV-1
15.3'
Forms of Distribution
XV-2
15:4
Required Minimum Distributions During Participant's Lifetime
XV-2
15,5. '
Required Minimum Distributions After Participant's Death
XV=3
15.6
Definitions
.w
15.7
Participants or Beneficiaries May Elect 5-Year Rule
XV-5
•
MW\1411232MAB:LD/LR 3 03/04/08 V
• TOWN OF AVON PUBLIC EMPLOYEES
MONEY PURCHASE PENSION PLAN
The Town of Avon, hereby amends and restates in its entirety its
Public Employees Money Purchase Pension Plan for the exclusive benefit of
certain employees and their beneficiaries under the following terms and
conditions:
0
•
MW\1411232MAB:ID/LRB 03/04/08
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(4)(2) of
the Code.
1.3 Beneficiary. The individual designated by the Participant,
according to section 6.3, 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 individuals, 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(4) or 457 of the
Internal Revenue Code of 1986, but excluding overtime, 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. .
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.
•
MW1411232MABIDaRB 03/04/08 1-1
Effective January 1; 1997, the family member aggregation
rules set forth in Code Section 4140 shall not apply.
Effective for'Plan years beginning on or after January 1, 1998,
Compensation-includes elective amounts that are not includible in the gross
income of the-Participant by reason of Code section 132(f)(4).
Effective for Plan Years'beginning on or after January1,
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. An illness or injury of a potentially permanent
nature certified by a physician selected by or satisfactory to the Plan Administrator
which prevents the Employee from engaging in his or her occupation for wage or
profit for which the Employee is reasonably fitted by training, education.or
• experience. The Plan Administrator may require or accept, as sole proof of total
and permanent disability, the determination by the Social Security Administration
that the Employee is entitled to a disability insurance benefit under the Federal
Social Security Act.
1.10 Employee. Employee shall mean any regular full-time
employee of the Employer, excluding Police Officers and Firefighters hired prior
to May 11, 2000. For purposes of the Plan, the City Administrator shall be:
considered an Employee. This Plan excludes any person who is.not classified by
the Employer on its payroll records as an employee under Code section 3121(d).
This exclusion applies, but is not limited to, a person classified as an independent
contractor, even if such classification is determined to be erroneous or is
retroactively revised (such-as by a governmental agency or court order): If a
personwho was not classified as an employee is later determined to have been
misclassified, the person shall continue to be treated as though not anEmployee
for all periods prior to the date the classification of the person should be revised
for purposes of the Plan.
Effecti ve January- 1, 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
MW%1411232MAB:LDAUIB 03104/08 1-2
for the Employer on a substantially full-time basis fora 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 leasmg.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. Entry Date. The date on which an Employee begins
employment as an, Employee and first performs an Hour of Service.for the
Employer.
.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 duti es 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
: .
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 •
MW\1411232MAB:LD/LRB 03/04/08 1-3
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(o) 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 computationperiod, an individual "who is absent from work for
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 'ehild-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 Abe 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.
L'16: Life Expectancy. Life Expectancy shall be determined in
accordance with Treasury Regulations interpreting Code section 401(a)(9).
1.17 , Limitation Year. The calendar year or such other 12
consecutive month period designated by the Employer for purposes of determining
themaximum 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.
MW\1411232MABID/M 03/04/08 1-4
.1. 19 Normal Retirement Age. The date on which.a Participant has
reached his 65th birthday.;
1.20 - Participant. Any Employee who has met the eligibility
requirements and is participating in the Plan. Effective January 1, 1987, also
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: , J Jan. The Town of Avon Public Employees 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 3 L.
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. , except as otherwise
indicated in the document. The Plan was originally "effective January 1, 1985,
amended January 1, 1988, amended and restated October 1, 1990, amended
February 26; 2002, and was amended in its entirety, on to include
amendments through
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 Spouse (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:
1.28 Trustee. Wells Fargo Bank, N.A. •
MW\1411232MAB:LD/L" 03/04/08 1-5
• 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 one each business
day of the Plan Year during which the 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 before January 1, 1985
when the Plan first took effect.
•
U
MW\1411232MAB:LD/UB 03/04/08 1-6
ARTICLE II
ELIGIBILITY REQUIREMENTS •
2.1. Participation. An. Employee shall become a Participant in the
Plan'on the first.day ofemployment as, an Employee. Participants in.the Plan,that.
was in effect on September_30, .1990 shall have become Participants .in this Plan oh.
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.
0-
MVA1411232MAB:LD/UB 03/04/08 II-1
•
ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 Matchin ~g Employer Contributions. The Employer shall
contribute to the Plan for each payroll period an amount equal to 100% of each
Participant's Mandatory Employee Pre-Tax contributions 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 [INTENTIONALLY LEFT BLANK]
U
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 ParEicipaiifin 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.
MW\1411232MA&LD/LRB 03/04/08
III-1.
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, 1994,
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).
is
n
LJ
MVA1411232MAB:LD/LRB 03/04/08 111-2
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 Compensati on; an amount equal to 8% of
the Participant's Compensation for the period'October 1'; 1990 through December
31, 1990, 10% of Participant's Compensation for the period. January 1, 1991
through December 11, 1992 and 11% for periods after January 1, 1993. Such
contributions shall bee, 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(4)(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 doesnot 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
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.
MW%1411232MAB:LD/L" 03/04/08 IV-1
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 Employee 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
such segregated investments. Terminated Participants' vested account balances •
MW\1411232MABID/L" 03/04/08 V-1
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 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.,
r:
MW\1411232MAB:LD/L" 03/04/08 V-2
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 Disabili . 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) Recipient of Payment After Death. 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 after the
Participants death 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 XV.
(b) 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:
WA1411232MARLD/LRB 03/04/08 VI-1
• (a) state the specific reason or reasons for the denial,
(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
fin ther payment until it has received written direction from the Plan Administrator.
MWN1411232MAB:LD/L" 03/04/08 VI-2
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: mi 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
i
(b) the Participant, after receiving the notice, affirmatively •
elects a distribution.
7.21. , 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) except as otherwise required by section 7.5:
(a) Single Lump Sum. A single, lump gum 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.
(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).
(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 •
MW\1411232MAB:LD/UB 03/04/08 VII-1
the Code and applicable regulation and within the requirements of Article XV.
• Subject to such requirements, installment payments may be accelerated, delayed or
paid in a lump sum at the direction of the Participant.
7.3 Minimum Distributions. Notwithstanding the other
provisions of the Plan, the Plan shall distribute each Participant's vested account
consistent with Code section 401(a)(9), including the minimum distribution
incidental benefit requirement and in accordance with Article XV.
(a) Required Beginning Date. Distribution of a
Participant's vested account shall begin no later than the April 1 following the later
of the calendar year in which the Participant (i) attains age 70-1/2 or (ii) terminates
Employment.
(b) Limits on Distribution Periods and Amounts.
Payments of a Participant's vested account shall comply with the restrictions
described in Article XV.
7.4 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.
(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; and 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). For distributions
made after December 31, 2007, a portion of a distribution shall not fail to be an
eligible rollover distribution merely because the portion consists of after-tax
Employee contributions which are not includible in gross income. However, such
portion may be transferred to an individual retirement account or annuity described
in section 408(a) or (b) of the Code, or in a direct trustee-to-trustee transfer to a
qualified trust described in section 401(a) which is exempt from tax under section
501(a) of the Code or to an annuity contract described in section 403(b) of the
• Code, provided such trust or contract provides for separate accounting for amounts
MW\1411232MAB:LD/LRB 03/04/08 VII-2
so transferred (and earnings thereon), including separate accounting for the, portion
of such distribution which is includible in gross income and the portion of such •
distribution which is not so includible.
(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 anindividual 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 Js 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.
7.5 Mandatory Distributions. The Plan shall make A mandatory.
distribution-of a Participant's vested account which is valued at $5,000 .or less at
the time of distribution. Participant consent to a mandatory distribution shall not
be required. A mandatory distribution shall be made no earlier than 30 days from
the date the Board provides notice of the.right to elect payment in a direct rollover,
pursuant to section 7. 1, and no later than. an administratively feasible date
following the end of the Plan Year in which the Participant's,.employment with the
Employer terminates.: If a Participant's vested account is valued at zero, the .
Participant shall be deemed to have received a distribut ion of the vested account as
of the date the Participant's employment with the Employer terminates. Mandatory
distributions shall be paid as follows:
MW\1411232MAB:LD/L" 03/04/08 VII-3
• (a) Mandatory Distributions of $1;000 or Less. Mandatory
distributions of $1,000 or less shall'be made in a single lump sum cash-payment.
A Participant's account balance shall include any amounts attributable to a-'.
Participant's Rollover Contribution, for purposes of determining if the account
exceeds $1,000.
(b) Mandatory Distributions in Excess of S 1,000, But Not
in Excess of $5,000. Mandatory distributions in excess_of $1,000, but not in.
excess of $5,000, shall be made in the form of am automatic rollover to an
individual retirement plan designated by the Board if the Participant has not yet
attained Normal Retirement Age or, if later, age 62. If the Participant has attained
Normal Retirement Age or,, if later, age 62, distribution shall. be made in a single
lump sum cash payment. A Participant's account balance'shall not include any
amounts attributable to a Participant's Rollover Contribution for purposes of
determining if the Account exceeds $5,000. However,- amounts. attributable to a
Participant's Rollover Contribution shall be included.in the mandatory payment.or
automatic rollover: Even though this Plan is not subjectlo.ERISA, any automatic
rollover made pursuant to' this section is intended to satisfy the requirements of
Labor Regulations section 2550.404a-2 as to the Board's selection of the individual
retirement plan provider and the investment of the funds within the individual
retirement plan.
Mandatory distribution to a Beneficiary following the death of a
Participant, or to an alternate payee pursuant to a qualified domestic relation order,
is not required to be paid in the form of an automatic IRA rollover. Also,
automatic rollover shall not apply to any distribution that is not an eligible rollover
distribution subject to the direct rollover. The Board shall direct the Trustee to
make a mandatory distribution of these Plan interests in a single lump sum cash
payment,, unless the Participant's Beneficiar
y is the Participant's surviving spouse
and the spouse elects payment in a direct rollover.
7.6 In-Service Withdrawals.
(a)_ . Withdrawal of 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 After Tax
Contributions or Rollover Contributions upon written request to the Plan
Administrator.
(b) - Withdrawal after Attaining Age 62. A Participant who
is employed by the Employer may withdraw all or any part of his or her vested
account upon written request to the Plan Administrator.
MVA1411232MAB:LD/L" 03/04/08 VII-4
(c) Other Requirements. A request for withdrawal under •
this section 7.6 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.
7.7 Distribution to IRA of Nonspouse Beneficiary. A
Participant's non-spouse Beneficiary may elect payment of any portion of the
deceased Participant's account in a direct trustee-to-trustee transfer to an individual
retirement account or annuity described in section 402(c)(8)(B)(i) or (ii) of the
Code that is established to receive the Plan distribution on behalf of the
Beneficiary. For purposes of this section 7.7, a trust maintained for the benefit of
one or more designated beneficiaries may be the Beneficiary to the extent provided
in rules prescribed by the Secretary of Treasury. If the Participant dies after the
Participant's required beginning date as defined in section 7.3 (a), the required
minimum distribution in the year of death may not be transferred according to this
section 7.7. The requirements of section 402(c)(11) of the Code apply to
distributions under this section 7.7.
.7
r~
U
MW\1411232MAB:LD/M 03/04/08 VII-5
ARTICLE VIII
is 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 "m lover 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:
Immediate 100% vesting
• (b) Employees hired October 1, 1990 through December 31,
1997:
Percentage Vested and
Years of Service Nonforfeitable
Less than 2 years
2 years
3 years
4 years
5 years
6 years
7 years
•
0%
20%
30%
40%
60%
80%
100%
MW\1411232MAB:LD/M 03/04/08 VIII-1
(c) Employees hired 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.
In the event the Participant receives a distribution before
becoming 100% vested, the Participant's vested interest on any later date in his or
her account attributable to Employer Contributions will be determined according
to the following formula: Vested portion = P(AB+D)-D. P is the vested
percentage at the later date the Participant again leaves employment; AB is the
suspense account balance at that time; and D is the amount distributed to the
Participant earlier.
. 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.
•
is
U
MW\1411232MAB:ID/L" 03/04/08 VIII-2
• 8.6 Reallocation of Forfeiture. Forfeitures shall be applied, fast,
to offset. administrative expenses of the Plan and, second, to reduce Matching
Employer Contributions.
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.
•
is
MW\1411232MAB:LD/LRB 03/04/08 VIII-3
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 accountand 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) $469000 ($30,000 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 .theme aning of section 401(h) or section 419A(f)(2) of is
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, and subject to the limitations of Code section 401(a)(17), as
adjusted. Effective with the first Plan Year beginning after 1997, Compensation
for purposes of this Article IX shall include any elective deferral as defined mi
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, 457 or 132(f).
For purposes of applying the limitations of this Article, Compensation for a
Limitation Year is theCompensation actually paid or includable in gross income
during such year.
•
MV1\1411232MAB:LD/LRB 03/04/08 IX-1
(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) Amount& 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 Participation in This Plan and a Defined Benefit Plan (Not
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 in' ay not exceed 1.0, as
described in section 415(e) of the Code, to 'the extent applicable to government
plans.
MW\1411232MAB:LD/LRB 03/04/08
IX-2
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 shalldirect 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 finidhig, 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
11 may be acceptable to the Board.
(c) uorum. A quorum for the transaction of business at a
duly called meeting shall consist of three (3) members.
(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. •
MWA411232MAB:LD/lAB 03/04/08 X-1
• (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 removal 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
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
MW\1411232MAB:LD/LM 03/04/08 X-2
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.
r~
MW\1411232MAB:LD/L" 03/04/08 X-3
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, 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 any person under the Plan shall be
subject to all terms and provisions of the Trust Agreement.
•
MV1\1411232MAB:LD/LRB 03/04/08 XI-1
ARTICLE XII
PARTICIPANT LOANS •
12.1 . AnDlication. 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 peri od 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, Voluntary After-Tax Contributions,
Mandatory Employee Contributions, and Rollover. Contributions. The $50,000
maximum loan amount shall be applied in: aggregate to all plans of the Employer.
An assignment or-pile dge 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 Ayylication Forms. All applications. must be, made on forms
provided by the Plan Administrator and must be signed bythe Participant and his
or her spouse, if applicable.
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 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 30 years. The Plan
Administrator may require the payment of principal and interest by means of •
MW\1411232MAB:LD/1AB 03/04/08 XII-1
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 Special Provisions During Qualified Military Leave. The
interest rate on a Participant loan will not be higher than 6% per year during the
period that a Participant is in military service pursuant to the Service members
is Civil Relief Act, Pub. L. 108-189 ("SCRA"). An interest rate reduced under
SCRA must meet the following requirements:
(a) Eligible Loan. The reduced interest rate applies only
to Participant loan obligations incurred before the military service period started.
(b) Notice Requirement. To qualify for a reduced interest
rate, the Participant must provide the Plan Administrator with a written notice and
a copy of the orders calling the Participant to military service (and any orders
further extending military service) not later than 180 days after the Participant's
termination or release from military service.
(c) Applicable Period. If the Participant complies with the
Notice Requirement contained in paragraph (b) above, the reduced interest rate
will be effective for the entire period of military service beginning on the date the
Participant is called under orders to military service and ending on the date the
Participant is released from military service, or dies in military service.
(d) Forgiven Excess Interest. Interest at a rate in excess of
6% per year is forgiven and will not be added to the principal amount due on a
Participant's loan. The amount of the Participant's periodic loan payment will be
• reduced by the amount of any interest due that is in excess of 6%.
MVV\1411232MAB:LD/L" 03/04/08 XII-2
(e) Waiver of Rights. A Participant may waive the right to
a reduced interest rate pursuant to SCRA. The waiver of rights is not effective •
unless the Participant and the Plan Administrator execute a written agreement
during or after the Participant's period of military service. The written agreement
must specifically reference the note executed by the Participant with respect to the
Participant loan.
(f) Petition. In accordance with SCRA, the Plan
Administrator may petition a court to retain a higher rate if active duty in military
service does not materially affect the Participant's ability to pay a higher rate.
If a Participant is on a leave of absence due to military service
pursuant to Code section 414(u), the Participant may request to suspend loan
repayments during such leave. Upon the Participant's completion of such military
service, the Participant must choose one of the following methods to repay the
loan: (a) re-amortize the remaining loan balance, (b) repay all suspended loan
payments in one check at the end of his or her leave; or (c) continue payments
under the prior rate and make a balloon payment at the end of the loan term. The
Participant may request that the Plan Administrator extend the repayment period
by the total length of the Participant's qualified military leave, provided the
repayment period does not exceed the latest permissible term of the loan. The
latest permissible term of the loan is the latest date permitted for the loan term •
under section 12.6, plus the period during which the loan was suspended. For
those participants who elect to suspend their loan repayments during military
service, the recalculation of the interest rate for the suspended loan period will not
be higher than 6% per year.
Military service for purposes of this Participant Loan Policy includes
active duty in the Army, Navy, Air Force, Marine Corps or Coast Guard; active
service of a commissioned officer of the Public Health Service or the National
Oceanic and Atmospheric Administration; National Guard active service
authorized by the President or Secretary of Defense for a period of more than 30
consecutive days in response to a national emergency; and certain periods of
lawful absence from duty.
12.11 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.
•
MW\1411232MAB:LD/IXB 03/04/08 XII-3
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.
(e) If Employer Contributions are inadequate to pay all
• premiums on all insurance policies, the Trustee may, at the option of the Plan
MW\1411232":LD/LU 03/04/08 XIII-1
Administrator, utilize other amounts remaining in each Participant's account to pay,
the premiums on his respectivepolicy or policies; allow the policies to lapse,
reduce the. policies to a level at which they maybe 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 dothe 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 sole1v 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.
0
MW1411232MAB:LD/M 03/04/08 XIII-2
•
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
1086 and any such amendment may, by its terms, be retroactive; and
(b) Amend this Plan in any other manner.
i
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.
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.
MW\1411232MAB:LD/LRB 03/04/08 XIV-1
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.
MW\1411232MAB:LDdAB 03/04/08 XIV-2
•
ARTICLE XV
• MINIMUM DISTRIBUTION REQUIREMENTS
15.1 General Rules.
(a) Effective Date. The provisions of this article will
apply for purposes of determining required. minimum distributions for calendar
years beginning with the 2003 calendar year.
(b)' Precedence. The requirements of this article will take
precedence over any inconsistent provisions of the Plan.
(c) Requirements of Treasury Regulations Incorporated.
All distributions. required under °this article will be determined and made in " .
accordance with the Treasury regulations under section 401(a)(9) of the Internal
Revenue Code.
'(d) TEFRA Section 242(b) Elections. Notwithstanding
the other provisions of this article, distributions'may be made under a designation
made before January 1; 1984, in accordance with section 242(b)(2) -of the Tax_
• Equity- and Fiscal Responsibility Act (TEFRA) and the provisions of -e'plan that
relate to section 242(2) of TEFRA.
15.2 Time and Manner of Distribution.
(a) Required Be inning Date. - The Participant's entire
interest will be distributed, "or begins to be distributed, to the Participant no later
than the Participant's required beginning date.
(b) " Death of Participant Before Distributions. Bed.' If the
Participant dies before distributions begin, the Participant's entire interest will be
distributed, or begin to be distributed, no later than as follows:
(i) If the Participant's surviving spouse is the
Participant's sole designated beneficiary, then distributions to the surviving spouse
will begin by December 31 of the calendar year ,immediately following the
calendar year in which the Participant died, or by December 31 of the calendar-.
year in which the Participant would have attained age 70-1 /2, if later.
(ii) If the Participant's surviving spouse is not the
Participant's .sole designated beneficiary, then distributions to the designated
•
MW\1411232MAB:LD/M 03/04/08 Xv-1
beneficiary will begin on December 31 of the.calendar year immediately following
the calendar year in which the Participant died. • .
(iii) If there is no designated beneficiary as of
September.30 of the year following the- year- of the Participant's death, the,
Participant's entire interest will be distributed by December 31 of the calendar year
containing the fifth anniversary-of the Participant's death.
(iv) If the. Participant's surviving spouse is the . .
Participant's sole designated beneficiary and the surviving spouse dies after the
Participant but before distributions to the surviving spouse begin, this section 15.2,
other than section 15.2(1b (i), will apply as if the surviving spouse were the
Participant.
For purposes, of this section 15.2 and section 15.5, unless section 15.2(b)(iv)
applies, distributions are considered to begin on the Participant's required,
beginning date. If section 15.2(b)(iv) applies, distributions are considered to begin
on the date distributions are'required to begin to the surviving spouse under
section 15.2(b)(i). If distributions under an annuity. purchased from an insurance
company irrevocably commence to.the. Participant :before the Participant's required
beginning date (or to the Participant's surviving spouse before the date
distributions are required to begin to the surviving spouse under
section 15.2(b)(i)), the date distributions are considered to begin is the date •
distributions actually commence.
15.3 Forms of Distribution. Unless the Participant's interest is
distributed in the form of, an annuity purchased from an insurance company or in a
single sum on or before the required beginning date, as of the, first distribution
calendar year distributions''will be made in accordance with sections 15.4 and 15.5.
.If the Participant's interest is distributed in the form of an annuity purchased from'
an insurance company, distributions thereunder will be made in accordance with
the requirements of section 401(a)(9).of the Code and the-Treasury regulations..
15.4 Required Minimum Distributions During Participant's
Lifetime.
(a) Amount of Required Minimum Distribution for Each
Distribution Calendar Year. During the Participant's lifetime, the minimum
amount that will .be distributed for each distribution calendar year is the lesser of-
(i) , the quotient obtained by dividing the
Participant's account balance by the distribution period in the Uniform Lifetime
•
MW\1411232MAB:LD/L" 03/04/08 XV-2
Table set forth in section 1.401(a)(9)-9 of the Treasury regulations, using the
Participant's age as of the Participant's birthday in- the distribution calendar year; or
(ii) if the Participant's sole designated beneficiary
for the distribution calendar year is the Participant's spouse, the quotient obtained
by dividing the Participant's account balance by the number in the Joint and Last
Survivor Table.set forth in section 1.401 (a)(9)-9 Hof the Treasury regulations, using
the Participant's and spouse's attained ages as of the Participant's and spouse's
birthdays in the distribution calendar year.
(b) Lifetime Required Minimum Distributions'Continue
Through Year of Participant's Death. Required minimum distributions will' be
determined under this section 15.4 beginning with the first distribution calendar
year and up to and including the distribution calendar year" that includes the
Participant's date of death.
15.5 Required Minimum Distributions After Participant's Death.
(a) Death On or After Date Distributi
ons Begin.
" (i) Participant Survive by Designated Beneficiary.'
• If the Participant dies on or after the date distributions begin and there is a
designated beneficiary, the minimum amount that will be distributed for each
distribution calendar year after the year of the Participant's death is the quotient
obtained by dividing the Participant's account balance by the longer of the
remaining life expectancy of the Participant or the remaining life expectancy of.the
Participant's designated beneficiary, determined as follows`
(1) The Participant's remaining life
expectancy is calculated using the age of the Participant iii the year of death,
reduced by one for each subsequent year. .
(2) If the Participant's surviving spouse is
the Participant's sole designated beneficiary, the remaining life expectancy of the
surviving spouse is calculated for each distribution calendar year after the year of
the Participant's death using the surviving spouse's age` as of the spouse's birthday
in that year. For distribution calendar years after the year of the surviving spouse's
death, the remaining life expectancy of the surviving spouse is calculated using the
age of the surviving spouse. as of the spouse's birthday in the calendar year of the
spouse's death, reduced by one for each subsequent calendar year.
(3) If the Participant's surviving spouse is
not the Participant's sole designated beneficiary, the designated beneficiary's
MW\1411232":LD/LRB 03/04/08 XV-3
remaining life expectancy is calculated using the age of the beneficiary in the year
following the year of the Participant's death, reduced by one for each subsequent •
year.
(ii) No Designated Beneficiary. If the Participant
dies on or after the date distributions begin and there is no designated beneficiary
as of September 30 of the year after the year of the Participant's death, the
minimum amount that will be distributed for each distribution calendar year after
the year of the Participant's death is the quotient obtained by dividing the
Participant's account balance by the Participant's remaining life expectancy
calculated using the age of the Participant in the year of death, reduced by one for
each subsequent year.
(b) Death Before Date Distributions Begin.
(i) Participant Survived by Designated Beneficiary.
If the Participant dies before the date distributions begin and there is a designated
beneficiary, the minimum amount that will be distributed for each distribution
calendar year after the year of the Participant's death is the quotient obtained by
dividing the Participant's account balance by the remaining life expectancy of the
Participant's designated beneficiary, determined as provided in section 15.5(a).
(ii) No Designated Beneficiary. If the Participant do
dies before the date distributions begin and there is no designated beneficiary as of
September 30 of the year following the year of the Participant's death, distribution
of the Participant's entire interest will be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death.
(iii) Death of Surviving Spouse Before Distributions
to Surviving Spouse Are Required to BeIf the Participant dies before the date
distributions begin, the Participant's surviving spouse is the Participant's sole
designated beneficiary, and the surviving spouse dies before distributions are
required to begin to the surviving spouse under section 15.2(b)(i), this
section 15.5(b) will apply as if the surviving spouse were the Participant.
15.6 Definitions.
(a) Designated Beneficiary. The individual who is
designated as the beneficiary under section 6.3 (a) of the Plan and is the designated
beneficiary under section 401(a)(9) of the Internal Revenue Code and
section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.
is
MW\1411232MAB:LD/LRB 03/04/08 XV-4
(b) Distribution Calendar Year: A calendar year for which
before t* Pa
• a minimum distribution is required. Fc3 digribu WAMYendar'year
rticipant's death, the first distributions ndar j'
immediately preceding the calendar year.which contains the Participant's required
beginning date. For qn tions beginning after the Participant's death, the first
distribution calendOe is6dar year in which distributions are required to
begin under section 15.2(b).) The required minimum distribution for the
Participant's first distribution calendar. year will be made on or before the
Participant's required beginniiig'date. The. required' minimum distribution for other
distribution calendar. years; 4ncluding the required minimum distribution for the
distribution calendar year in which the Participant's required beginning date
occurs, will be made on,br before December 31 of that distribution calendar year.
(c) Life Expectancy. Life expectancy is computed by use
of the Single Life Table in section 1.401(a)(9)-9 of the Treasury regulations.
(d) Participant's Account. Balance. The account balance as
of the last valuation date in the calendar year immediately preceding the
distribution calendar year (valuation calendar year) increased by the amount of
any contributions, made and allocated or forfeitures allocated to the account
balance as of dates in the valuation calendar year after the valuation date and
decreased by distributions made in the valuation calendar year after-the valuation
date. The account balance for the valuation calendar year includes any amounts
rolled over or transferred to the Plan either in the valuation calendar year or in the
distribution calendar year if distributed or transferred in the valuation calendar,
year.
(e) Required Berg Date. The date specified in
section 7.3(a) of the Plan.
15.7 Participants or Beneficiaries May Elect 5-Year Rule.
Participants or beneficiaries may elect on an individual basis whether the 5-year
rule or the life expectancy rule in sections 15.2(b) and 15.5(b) applies to
distributions after the death of a Participant who has a designated beneficiary. The
election must be made no later, than the earlier of September 30 of the calendar
year in which distribution would be required to begin under section 15.2(b), or by
September 30 of the calendar year which contains the fifth anniversary of the
Participant's (or, if applicable, surviving spouse's) death. If neither the Participant
nor beneficiary makes an election under this paragraph, distributions will be made
in accordance with sections 15.2(b) and 15.5(b).
•
MW\1411232":LD/L" 03/04/08 XV-5
IN WITNESS WHEREOF, the parties hereto have executed this Plan •
this Jjday of. ddyL Rfc4 , 7.OCQ .
EMPLOYER:
av
Signed for the Employer By: SC.,64
Title: Qae 1-
r~
U
•
MW\1411232MAB:LD/LRB 03/04/08
Memo
To: Honorable Mayor and Town Council
Thru: Larry Brooks, Town Manager
From: Scott Wright, Asst. Town Manager - Finance Director
Date: November 6, 2008
Re: Town of Avon Public and Police Employees Pension Plans
Summary:
In September, the retirement boards of both the Public Employees Pension Plan and the Police
Employees Pension Plan met with representatives from our plan administrator, Wells Fargo
Bank Institutional Trust Services. The purpose of this meeting was to review changes to our
plan documents that are required pursuant to the Economic Growth and Tax Relief
Reconciliation Act of 2001, as well as other changes in laws that affect qualified plans. Both
retirement boards voted unanimously to approve these changes.
All governmental plans must be amended and submitted to the Internal Revenue Service for
approval on or before January 1, 2009. An explanation of the various changes has been
provided as an attachment to this memo.
Financial Implications:
There are no financial implications to these changes to either current participants or to the
Town as sponsor of the plans.
Recommendation: -
We recommend approval of Resolutions No. 08-38 and 08-39 adopting and restating the plan
documents for the Town of Avon Public Employees Money Purchase Pension Plan and the
Town of Avon Police Employees Money Purchase Pension Plan.
Town Mana_yer Comments:
Page 1
Attachments:
A - Explanation of Amendments
B - Resolution No. 08-38
B -Plan Document Public Employees MPPP - Black lined
C - Plan Document Public. Employees MPPP - Final
D - Resolution No. 08-39
E - Plan Document Police Employees MPPP - Black lined
F - Plan Document Police Employees MPPP - Final
0 Page 2
EXPLANATION OF AMENDMENTS TO THE
TOWN OF AVON PUBLIC EMPLOYEES AND POLICE OFFICERS
. MONEY PURCHASE PENSION'PLANS
The Money Purchase Pension Plans for the Town of Avon Public Employees and the
Police Officers have been amended to comply with the Economic Growth and Tax Relief
Reconciliation Act of 2001 (known as "EGTRRA"), as -well aas several other chan ges in
the laws that impact qualified 'plans: All plans for Governments must be amended and
submitted to the Internal Revenue Service for approval on or before January 31; 2009.
An explanation of the amended provisions follows.
Plan Amendments Required by Law
Article I. Definitions:
Section 1.7 Compensation: At the request of the Town, the Compensation
definition was amended to eliminate the definition of overtime as "hours in excess
of 40 per week paid at either straight-time or at time=and-one-half."
In addition, effective as of January 1, 1998, Compensation includes elective
amounts that are not included in gross income because they are a "qualified
transportation fringe."
Section L 16 Life Expectancy: The definition was changed to comply with the
Required Minimum Distribution provisions that amended as a result of new
regulations issued in 2002 in connection with EGTRRA..
Article VI. Eligibility for Benefits:
Section 6.3 Death: Subsections (a) Before Termination of Employment,
(b) After. Termination of Employment and (i), (ii) and (Ii) under subsection (c)
Recipient of Payment After Death were all deleted from Artkle VI and are
replaced in Article XV.
Article VII. Payments:
Section 7.3 Minimum Distribution: Was amended to reference Code section
401(a)(9) and the added language in Article XV. as required by EGTRRA. .
Section 7.4 Direct Rollover: Subsection (a) Eligible Rollover Distribution was
• amended to add language relating to the distribution and rollover of Employee
after-tax contributions made after December 31, 2007 to comply with current .
rollover rules.
' Ar icle'IX. Limitations On Allocations:
Section 9.2 Disposition of Excess Annual Additions: Under current regulations,
this section is not necessary and was removed in its entirety.
Article XII. Participant Loans:
Section 12.10 Special Provisions During Qualified Military Leave: This section
was added to bring the plan into compliance with current military leave
requirements relating to outstanding participant loans This provision was added
as a result of the Service members Civil.. Relief Act of 2003 (SCRA).
Article XV. Minimum Distribution Requirements: This new article was added
to the_plan referencing the age 701/2required. minimum distributions, surviving
spouse, beneficiary and non-beneficiary distribution rules required by IRS Code
section 401(a)(9).
Optional Plan Amendments
Article VII. Payments:
Section 7.5 Mandatory. Distributions: This optional section allows the Employer •
to make a mandatory distribution of a Participant's vested account balance which
is, valued at $5;000 or less at the time of termination. Balances between $1,000
and $5,000 will be paid to a Wells Fargo IRA in the Participant's name. Balances
of,$1,000 or less will be paid to the participant in cash. This provision applies
only to terminated participants that do not provide a distribution election to plan
administrator. This provision will also. ease the fiduciary responsibility of
administering small terminated participant balances.
Sections 7.6 (b) In-Service Withdrawals: This optional section allows an active
employee to taking an in-service; (while still employed. by the Town) distribution
from the plan. Public employee will be eligible beginning at age 62 and Police
employees at age 55.
Section 7.7 Distribution to IRA of Nonspouse Beneficiar: This optional section
allows a nonspouse beneficiary (children, parents, etc.) the option of rolling their
balance to an IRA. This provision became available under the Protection Act of
2006.
10