HomeMy WebLinkAboutOrdinance - 10121-1998 - Amending Ord 9781 Deferred Compensation Plan For City Employees. - 11/19/1998I First Reading
Item No. 14
November 19, 1998
Second Reading
Item Ro. 13
December 10. 1998
ORDINANCE NO. 10121
AN ORDINANCE AMENDING ORDINANCE NO. 9781 OF THE CITY OF
LUBBOCK, WHICH ORDINANCE PROVIDED PARTICULARS OF A DEFERRED
COMPENSATION PLAN FOR CITY EMPLOYEES, AND MODIFYING SAID
ORDINANCE TO CONFORM TO FEDERAL AND STATE LAW.
WHEREAS, the City Council heretofore established a Deferred Compensation Plan for
City employees by enacting Ordinance No. 7809 as amended by Ordinances 8904 and 9781;
and
WHEREAS, V.T.C.A., Government Code §§609.001 .et ~ .• providing for Deferred
Compensation Plans for political subdivisions of the State of Texas, authorizes, in addition to
life insurance policies and fixed or variable rate annuities, the inclusion of mutual funds,
certificates of deposit, money market accounts and passbook savings accounts as proper
investment products for Deferred Compensation Plans; and
WHEREAS, it is the desire of the City Council as well to amend the City's Deferred
Compensation Plan to conform with changes in State and Federal Law; NOW THEREFORE:
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT Ordinance No. 9781 of the City of Lubbock, BE and is hereby amended to read
as follows:
DEFERRED COMPENSATION PLAN
I. INTRODUCTION
The City of Lubbock, Texas, by virtue of the authority granted by V .T.C.A.,
Government Code §§609.001 .et ~ and 26 U.S.C. §457, hereby establishes the City of
Lubbock Employees Deferred Compensation Plan, hereinafter referred to as the "Plan". The
purpose of the Plan is to attract and retain certain individuals as Employees by permitting them
to enter into agreements with the City which will provide for monthly payments of deferred
compensation on retirement, as well as death benefits in the event of death before or after
retirement. The effective date of the start of this Plan shall be July 1, 1978, or as soon as
practical thereafter.
Nothing contained in this Plan shall be deemed to constitute an employment contract or
agreement for services between the Participating Employees and the City and nothing
contained herein shall be deemed to give any such Employee a right to be retained in the
employ of the City. Nothing herein shall be construed to modify the terms of the employment
relationship between Participating Employees and the City, this Plan being intended as part of
each Participant's Compensation and as a Retirement supplement.
This Plan shall, unless otherwise determined as provided by State and Federal Laws
governing Deferred Compensation Plans, be implemented and serviced by Qualified Vendors
selected by the Plan Administrator or with whom the Plan Administrator has contracted for
participation in the Plan subject to approval ofthe governing body of the City.
II. DEFINITIONS
2.01. Compensation: The total annual remuneration for employment or contracted
services payable by the City that would be included in the federal gross income
of the Participant but for the Participant's election to participate in the Plan. The ·
Plan Administrator shall act subject to the direction and supervision of the
Oversight Committee.
2.02. Includible Compensation: That amount of Compensation includible in a
Participant's federal gross income, reduced both by amounts of Compensation
deferred under this Plan or any other Plan or arrangement pursuant to Section
457 of the Internal Revenue Code of 1986 or otherwise and by amounts
contributed by the City to an annuity contract described in Section 403{b) of the
Code, without regard to any community property laws.
2.03. Deferred Compensation: The amount of Compensation not yet earned, as
designated in the Participation Agreement, which the Participant and the City
mutually agree shall be deferred in accordance with the provisions of this Plan,
subject to the following limitations:
(a) Normal Limitation: The maximum amount that may be deferred under
this Plan for a Participant's taxable year, except as provided in Section
2.03(b ), shall not exceed:
(i) the lesser of $7,500, or such larger amount as may be prescribed
by the Secretary of the Treasury; or,
(ii) 33 1/3% of the Participant's Includible Compensation.
For a Participant in more than one 457 Plan, the maximum amount that
may be deferred for such Participant's taxable year is $7,500 (or such
larger amount as may be prescribed by the Secretary of the Treasury, and
as modified by Sect· ion 2.03(b) below). In applying this limit, a
reduction must be made for any amounts excluded from gross income
under Section 403(b) for the year and any salary Deferrals for the year
under a 401 (k) Plan or a simplified employee pension plan.
(b) Catch-up Limitation: For each one of the Participant's last three taxable
years ending prior to but not including the year of such Participant's
Normal Retirement Age, as elected by the Participant pursuant to or as
otherwise defined in Section 2.04 of this Plan, the limitation set forth in
Section 2.03(a) shall be the lesser of:
1. $15,000; or
2. the sum of the normal limitation set forth in Section 2.03(a), plus
so much of the normal limitation which has been underutilized in
all prior taxable years after December 31, 1978.
(c) For purposes of Section 2.03(b), a prior taxable year can be taken into
account: (1) if the Participant was eligible to participate in the Plan or
any similar prior plan of the City or another Texas entity during any
portion of any prior taxable year after December 31, 1978; and (2) if the
Compensation deferred, if any, under this Plan or such other plan during
such prior taxable years was subject to a maximum deferral limitation as
required by Section 457 of the Code.
A Participant may elect to utilize the catch-up limitation with respect to
only one Normal Retirement Age in this Plan or any other similar plan
notwithstanding the fact that the Participant utilizes the catch-up
limitation in less than all of the three eligible years.
2.04. Nonnal Retirement Age: The age as described in Section 2.04(a) below subject
to the alternative provision of Section 2.04(b) as elected in writing by the
Participant or pursuant to the automatic provision of Section 2.04(c):
(a) Age 70 112; or
(b) Any of the following as elected by the Participant in writing at any time
prior to Separation from Service or prior to the use of the catch-up
limitation provision described in Section 2.03(b):
1. Any age which is (1) not earlier than the earliest age at which the
Participant has the right to retire and receive unreduced
retirement benefits from the City's basic pension plan; and (2) not
later than the date the Participant attains age 70 112; or
2. For a Participant who continues in the service of the City after the
Normal Retirement Age provided in Section 2.04(a) or after the
age elected pursuant to Section 2.04(b )(1 ), such Normal
Retirement Age may be a later age as elected by the Participant;
provided, however, such age may not be later than the
Participant's actual date of Separation from Service with the City.
(c) If a Participant continues to provide services for the City either (I) after
age 70 1/2 without having previously elected an alternative Normal
Retirement Age as provided in Section 2.04(b); or (2) after such age as
elected pursuant to Section 2.04(b), such Participant's Normal
Retirement Age shall automatically be the Participant's actual date of
Separation from Service.
{d) Once a Participant has to any extent utilized the catch-up limitation of
Section 2.03{b), such Participant's Normal Retirement Age shall be
determined solely by reference to that age as used for purposes of
Section 2.03(b); provided, further, such age may not thereafter be
changed.
2.05. Retirement: The severance ofthe Participant's employment relationship with the
City on or after attainment of the Participant's Normal Retirement Age whereby
the Participant thereafter is not providing services to the City.
2.06. Separation from Service: The severance of the Participant's employment
relationship with the City whereby the Participant thereafter is not providing
services to the City.
2.07. Beneficiary: The Beneficiary or Beneficiaries of certain benefits of the Plan
designated by the Participant in the Participation Agreement. Nothing herein
shall prevent the Participant from designating more than one Beneficiary, or
primary and secondary or contingent Beneficiaries, or changing the designation
of a Beneficiary. If two or more or less than all designated Beneficiaries survive
the Participant, payments shall be made equally to all such Beneficiaries, unless
otherwise provided in the Beneficiary designation. Elections made by a
Participant in the Participation Agreement shall be binding on any such
Beneficiary or Beneficiaries except for the right of a Beneficiary as provided in
Section 6.05.
2.08. Deferral: The amount of Compensation the receipt of which a Participating
Employee has agreed to defer under the Plan.
2.09. Deferred Compensation Trust Fund: The fund in which Deferrals and
Investment Income of Participants are temporarily held.
2.10. Eligible Individual: Any individual Employee of the City or any individual
performing services for the City by appointment, election or contract, who
performs services for the City for which Compensation is paid and who meets
the criteria set forth in Section 4.01.
2.11. Employee: An individual who is an officer or employee of the City.
2.12. Investment Income: The amount earned from investment in a Qualified
Investment Product of Compensation deferred under the Plan.
2.13. Investment Product: Includes life insurance policies, fixed or variable rate
annuities, mutual funds, certificates of deposit, money market accounts and
passbook savings accounts.
2.14. Participant or Participating Employee: An employee who has executed a
Participation Agreement to participate in the Plan or an Eligible Individual who
the Plan Administrator has determined may participate in the Plan and who has
executed a Participation Agreement.
2.15. Participation Agreement: A written agreement between the Plan Administrator
on behalf of the City and a Participant for the deferment of a portion of the
Participant's Compensation through automatic payroll deductions.
2.16. Plan Administrator: The person responsible for administering the Plan, who
shall be the Director of Human Resources for the City.
2.17. Plan Year: The calendar year.
2.18 Qualified Investment Product: An Investment Product that a Plan Administrator
has in writing approved to receive Deferrals and Investment Income, issued by
or obtained from a Qualified Vendor.
2.19. Qualified Vendor: A Vendor approved by the Plan Administrator or with whom
the Plan Administrator has contracted for participation in the Plan.
2.20. Vendor: A private entity that sells Investment Products.
2.21. .Q:u:k: The Internal Revenue Code of 1986, as amended.
Til. ADMINISTRATION
3.01. This Plan shall be administered by a Plan Administrator subject to the
supervision of an Oversight Committee as hereinafter provided.
3.02. The Oversight Committee shall consist of the City's Chief Financial Officer,
Budget and Research Manager, and Managing Director of Management
Services. The Committee shall meet as often as necessary to transact business
but not less than monthly. A quorum must be present to conduct business. The
agenda for such meetings shall be prepared by the Plan Administrator and shall
include all matters concerning the Plan which Plan Participants desire to submit
for the Committee's consideration, including, but not limited to, requests from
Participants for withdrawals due to unforeseeable emergencies. In addition, the
Committee shall review all criteria and procedures developed by the Plan
Administrator under Section 3.03 of this Plan and may also promulgate rules
and regulations for the administration of the Plan provided they are · not
inconsistent with the provisions of this Plan or State and Federal Laws
governing this Plan.
3.03. Subject to the direction and supervision of the Oversight Committee, the Plan
Administrator shall:
(1) Invest a Participating Employee's Deferrals and Investment Income in
the Qualified Investment Products designated by such Employee;
(2) Transfer the Deferrals and Investment Income of a Participating
Employee from one Qualified Investment Product to another at such
Employee's request;
(3) Determine the minimum and maximum number of Vendors that may be
Qualified Vendors for the Plan at any given time;
( 4) Execute necessary contracts for the administration of Plan, subject to
prior approval of the governing body of the City;
(5) Develop and implement criteria and procedures for evaluating a Vendor's
application to become a Qualified Vendor;
(6) Develop and implement requirements for Qualified Vendors and their
employees concerning disclosure, reporting, standards of conduct,
solicitation, advertising, relationships with Participating Employees, the
nature and quality of services provided to those Employees, and other
matters;
(7) Develop and implement criteria and procedures for evaluating a
Qualified Vendor's Investment Products to determine whether those
products are acceptable as Qualified Investment Products;
(8) Develop and implement procedures that allow a Participating Employee
to designate a Beneficiary to receive such Employee's Deferrals and
Investment Income if the Employee dies;
(9) Develop and implement procedures for distributing Deferrals and
Investment Income to a Participating Employee or such Employee's
Beneficiary, as appropriate, because of the Employee's death,
termination of employment, fmancial hardship, or other reason
permissible under federal law;
(1 0) Detennine whether independent contractors who provide services to the
City may participate in the Plan (For purposes of this Plan, an
independent contractor that is authorized to participate in the Plan shall
be treated as an employee of the City.;
(11) Develop and implement criteria and procedures on any other matter the
Plan Administrator considers appropriate for the operation of the Plan;
and,
(12) Change the amount of a Participant's Deferrals upon written notification
from the Participant.
3.03-A. Limitation on Approval of Vendor: A Plan Administrator may not
approve a Vendor's participation, in the Plan ifthe Vendor is:
(1) a state or national bank or savings and loan association, the deposits of
which are not insured by the Federal Deposit Insurance Corporation;
(2) a credit union whose deposits are not insured by the National Credit
Union Administration Board or the Texas Share Guaranty Credit Union;
or
(3) an insurance company that:
(a) is not a member of the Life, Accident, Health and Hospital
Services Insurance Guaranty Association; or
(b) is an impaired or insolvent insurer under V.A.T.S. Insurance
Code. art. 21.28-D.
3.04. Certification by the Texas Dwartment of Insurance: The Plan Administrator
may request the Texas Department of Insurance to certify in writing whether an
insurance company is prohibited from being approved as a Qualified Vendor
under Section 3.03(3) of this Plan and the Plan Administrator may rely on the
certification.
3.05. Approval of Vendor; Contract: After the Plan Administrator approves a
Vendor's request to become a Qualified Vendor, the Plan Administrator shall
execute a written contract with the Vendor to participate in the Deferred
Compensation Plan. However, the Vendor may offer only Qualified Investment
Product to Participating Employees.
3.06. Failure of Vendor to Satisfy Requirements: A Vendor may become and remain a
Qualified Vendor only if the Vendor satisfies the requirements of State law
governing Deferred Compensation Plans and the Plan Administrator for
participation in the Plan. The Plan Administrator may immediately transfer to
the Plan's Deferred Compensation Trust Fund all Deferrals and Investment
Income from any Vend or who fails to satisfy either of these requirements.
Immediately after making the transfer, the Plan Administrator shall give to each
Participating Employee whose Deferrals and Investment Income were
transferred a notice which states that: (1) the Vendor's Investment Products are
ineligible to receive additional Deferrals; (2) such Employee's Deferrals have
been transferred from the Vendor to the Deferred Compensation Trust Fund; and
(3) the employee is required to promptly designate another qualified investment
product to receive the transferred amount.
3.07. Each member of the Committee shall be eligible to participate in the Plan but
may not vote or otherwise participate in discretionary decisions relating to such
member's own participation in the Plan.
3.08. The Committee may adopt rules and regulations for the administration of this
Plan; provided, however, no such rule or regulation shall be contrary to State or
Federal Law or any regulation adopted pursuant thereto.
3.09. The Committee may adopt rules and procedures for conducting business.
3.10. An employee's deferred amounts and investment income under the Plan and the
qualified investment products in which the amounts are invested are held in trust
for the exclusive benefit of participants and their beneficiaries in accordance
with Section 457 ofthe Internal Revenue Code of 1986 (26 U.S.C. Section 457).
For purposes of this section, custodial accounts and contracts described by
Section 457 are treated as trusts.
3.11. (a) Neither the City' of Lubbock, the Plan Administrator, the Oversight
Committee or its members, or any employee of any of those entities or persons
is liable to a participating employee for the diminuation in value or loss of all or
part of the participating employee's deferred amounts or investment income
because of market conditions or the failure, insolvency, or bankruptcy of a
qualified vendor.
(b) A participating employee is responsible for monitoring:
(1) the financial status of the qualified vendor in whose products the
employee's deferred aqmounts and investment income are
invested;
(2) market conditions; and
(3) the amount of the employee's deferred amounts and investment
income that is invested in the qualified vendor's product.
IV. PARTICIPATION IN THEPLAN
4.01. Eligibility: Any Eligible Individual who performs services for the City for which
Compensation is paid and who executes a Participation Agreement is eligible to
participate in the Plan.
4.02. Enrollment in the Plan:
(a) A:n eligible individual may become a Participant and agree to defer
Compensation not yet earned by entering into a Participation Agreement
prior to the first day of the calendar month in which it is to become
effective.
(b) At the time of entering into or modifying the Participation Agreement
hereunder to defer Compensation or at the time of re-entry following a
withdrawal under Article VII, a Participant must agree to defer a
minimum amount of$300.00 annually.
(c) A Participant who defers Compensation may not modify such agreement
to change the amount deferred except with respect to Compensation to
be earned in a subsequent calendar month or except as provided in
Article VII hereof with respect to withdrawals. Notice of such
modification must be given prior to the first day of the calendar month
for which such modification is to be effective.
(d) A Participant may at any time revoke the Participation Agreement to
defer Compensation with respect to Compensation not yet earned. The
revocation is effective and the Participant's full Compensation will be
restored in the month subsequent to the month such revocation is
approved by the Plan Administrator. The Participant must notify the
Plan Administrator in writing of such revocation at least thirty-five (35)
days prior to the beginning of the calendar month for which such
revocation is to be effective. Amounts previously deferred shall be paid
only as provided in this Plan.
(e) A Participant who has withdrawn from the Plan, as set forth in Article
VII, or who has revoked the Participation Agreement, as set forth in
paragraph (d) of this section, or who returns to perform services for the
City after a Separation from Service, may again become a Participant in
the Plan and agree to defer Compensation not yet earned by entering into
a new Participation Agreement as provided in paragraph (a) of this
section.
V. CALCULATION OF BENEFITS
5.01. The amount of any benefit to a Participant or Beneficiary made pursuant to this
Plan shall be determined by the value at the time of such payment of the
Investment Products selected by the Participant in accordance with the elections
in the Participation Agreement and the provisions of this Plan.
5.02. Each Qualified Vendor selected by the Plan Administrator shall file with the
Plan Administrator a form, statement or report setting forth the calculations of
benefits peculiar to said Vendor's Qualified Investment . Products, which
document or documents above referred to are hereby incorporated as if fully set
out herein.
5.03. The Employer will arrange for the purchase of an Investment Product and invest
amounts of deferred compensation therein in order to provide a fund from which
it can satisfy its obligation to make benefit payments pursuant to this Plan. All
amounts of Compensation deferred under this Plan. all property and rights which
may be purchased with such amounts and all income attributable to such
amounts, property or rights shall be held in trust (or a custodial account or
annuity contract described in Code Section 401(f)) for the exclusive benefit of
Participants and their Beneficiaries. All such amounts shall not be susbject to
the claims of the City's!Employer's general creditors.
5.04. The amount of compensation deferred by the Participant shall be deferred by the
Employer at the end of each pay period. The amounts deferred shall not be
treated as compensation subject to federal income tax withholding.
5.05. The City shall be liable to pay benefits under this Plan only to the extent of
amounts that would have been available under the Investment Product as
measured by the elections made in the Participation Agreement, and the City
shall not be responsible for the investment or performance results of such
Investment Product. Furthermore, if an Investment Product is so acquired to
measure benefits payable under this Plan, the value of any benefit shall be
determined by the actual value of the Investment Product at the time of benefit
payment, unaffected by any independent or arbitrary standard of calculation
with respect to such Investment Product.
·VI. BENEFITS
6.0 1. General Benefit Terms:
(a)(i) Benefit payments to a Participant or Beneficiary shall be made according
to the manner and method of payment as elected in the Participation
Agreement, which election may be changed by a Participant or a
Beneficiary, as appropriate, and as allowed by the Plan. at any time more
than thirty (30) days prior to the commencement of such benefit
payments pursuant to the Participation Agreement.
(ii) Subject to the restrictions on choice of benefit contained in Sections
6.01(b), 6.01(c), 6.04 and 6.05, the options available for selection by the
Participant or Beneficiary as to the manner and method of payment for
Investment Products which are ftxed or variable rate annuities are:
1) lump sum;
2) periodic payments for a designated period;
3) periodic payments for life;
4) periodic payments for life with a guaranteed minimum number of
payments;
5) periodic payments for the life of the Participant with continuation
of the payments or a percentage of the payments for the lifetime
ofthe Participant's spouse;
6) life annuity with payments guaranteed for a fixed period such as
5, 10, 15 or 20 years;
7) joint and survivor life;
8) such other option as the City may, in its sole discretion, offer to
the Participant prior to the commencement of benefits, that
complies with state and federal laws governing this Plan and is
provided under the Investment Product.
Periodic payments may be monthly, quarterly, semiannually or
annually. The amount of each payment may be fixed or fluctuate
with the performance of the Investment Product.
(iii) Subject to the restrictions on choice of benefit contained in Sections
6.0l(b), 6.01 (c), 6.04 and 6.05, the options available for selection by the
Participant or Beneficiary as to the manner and method of payment for
Investment Products other than fixed or variable rate annuities shall be
determined by Qualified Vendors; provided, however, such options shall
not be contrary to State and Federal Laws governing this Plan.
(b) In the absence of an election in the Participation Agreement as to the
manner and method of such benefit payments as provided in Sections
6.01(a)(ii), the City shall make periodic payments to the Participant or
Beneficiary as a distribution of the account in equal percentages over ten
(10) years; provided, further, in no event shall payments to a Beneficiary
exceed (i) the life expectancy of a Beneficiary where such Beneficiary is
the surviving spouse of the Participant; or (ii) a period of fifteen (15)
years or, if less, the life or life expectancy of the Beneficiary where such
Beneficiary is not the sunriving spouse of the Participant.
(c) In determining the amount of benefit payments, the m.Immum
distribution incidental death benefit rule must be satisfied. This rule will
be similar to the one contained in IRS Proposed Regulation 1.401(a)(9)-
2. To the extent that the payment required under this rule is greater than
the amount determined under Section 6.01 (f), the greater amount must
be paid.
(d) Benefit payments to a Participant or Beneficiary shall commence at the
time provided in the Plan, subject to an irrevocable election by the
Participant or Beneficiary, as appropriate, prior to the time such benefits
first become payable, to defer the beginning of such payments or a
portion of such payments to a later date as allowed by the Plan and
pursuant to the Participation Agreement.
A participant who has elected to defer his benefits pursuant to the
preceding paragraph may subsequent to his initial election, and prior to
the commencement of benefits, elect to further defer payment of benefits
to a later date as allowed by the Plan, and not contrary to applicable state
or federal laws or regulations. A Participant is only permitted to make
one such election.
(e) In no event may benefit payments to the Participant or any Beneficiary
commence more than sixty ( 60) days after the close of the Plan Year
after the later of (1) the date of Separation from Senrice; or (2) the date
the Participant attains (or would have attained) Normal Retirement Age.
(f) Benefits under the Plan must either (i) be distributed by April 1 of the
calendar year following the calendar year in which the Participant attains
age 70 112 or retires, whichever occurs later; or (ii) commence no later
than April l of such calendar year and be made over the life of the
Participant (or the lives of the Participant and the Participant's
Beneficiary) or over a period not exceeding the life expectancy of the
Participant (or the life expectancies of the Participant and his
Beneficiary). For purposes of this provision, life expectancy(ies) shall
be determined using the return multiples of Section 1. 72-9 of the
Regulations. The life expectancy of the Participant and the Participant's
spouse (other than in the case of a life annuity) may be recalculated, but
not more frequently than annually.
(g) Distributions payable over a period of more than one year must be paid
in substantially non·increasing amounts (not less frequently than
annually).
6.02. Benefits Upon Retirement: Beginning no earlier than thirty-one (31) days and no
later than sixty ( 60) days following the Participant's Retirement, the City shall
begin payments to the Participant in accordance with the elections made in the
Participation Agreement; provided, however, the Participant may irrevocably
elect, within the one hundred twenty (120) day period ending thirty (30) days
after Retirement, to defer the beginning of such payments or any portion of such
payments to a date not later than sixty (60) days after the close of the Plan Year
following Retirement and as provided in the Participation Agreement.
This provision shall only apply if the Participant retires prior to attaining age 70
112. For Participants retiring on or after attaining age 70 1/2, the City shall
begin benefit payments on April 1 of the calendar year following the calendar
year in which the Participant retires or sixty (60) days after the close of the Plan
Year following Retirement, whichever is earlier, in accordance with the
provisions of Section 6.ol (f) and (g) and with the election made by the
Participant in the Participation Agreement.
6.03. Benefits Upon S@aration From Service: If Separation from Service occurs prior
to attainment of the Normal Retirement Age, the City shall begin benefit
payments no earlier than sixty-one (61) days and no later than ninety (90) days
following such Separation from Service; provided, however, the Participant may
irrevocably elect, within the one hundred twenty (120) day period ending sixty
(60) days after Separation from Service, to defer the beginning of such
payments, or any portion of such payments, to a date not later than Normal
Retirement Age as provided in the Participation Agreement.
6.04. Benefits Upon Death After Commencement of Benefits:
(a) Should the Participant die at any time after benefit payments have
commenced, the City shall commence payment to the Beneficiary of the
balance remaining of such payments no earlier than sixty-one (61) days
and no later than ninety (90) days following the Participant's death.
Payments to the Beneficiary shall continue under the option selected by
the Participant in the Participation Agreement.
(b) If no Beneficiary is designated by the Participant or if no Beneficiary
survives the Participant for a period of thirty (30) days, then the City
shall pay to the estate of the Participant a single lump sum amount equal
to the current value of such remaining payments. If a Beneficiary does
not survive the period after the Participant's death during which such
payments to the Beneficiary are to be made, the City shall pay to the
estate of that Beneficiary a single lump sum amount equal to the current
value of such remaining payments to that Beneficiary.
6.05. Benefits Upon Death Prior to Commencement of Benefits:
(a) Should the Participant die at any time before benefit payments have
commenced, the City shall commence benefit payments to the
Beneficiary no earlier than sixty-one (61) days and no later than ninety
(90) days following the Participant's death. Such payments shall be
made according to the manner and method provided in the Participation
Agreement or as selected by the Beneficiary pursuant to a revised
Participation Agreement submitted to the Committee more than thirty
(30) days prior to the commencement of such benefit payments over
a period not to exceed:
1 . the life expectancy of the Beneficiary if the Beneficiary is the
Participant's surviving spouse; or
2. a period not in excess of fifteen (15) years or, if less, the life or
life expectancy of the Beneficiary if the Beneficiary is not the
Participant's surviving spouse.
(b) However, the Beneficiary may irrevocably elect within the sixty (60) day
period subsequent to the Participant's death to defer the beginning of
such payments as described below. Subject to the limitations provided
under Section 6.05(a), the Beneficiary may also elect to change the
manner and method of benefit payments as allowed under the Plan if
such election is made more than thirty (30) days prior to the date when
such deferred benefits are to commence pursuant to Section 6.05(b) of
the Plan.
The maximum deferral period is five (5) years from the Participant's date
of death or the date the Participant would have attained Normal
Retirement Age, whichever date is earlier; provided, however, if the
deferral of benefits extends beyond one year from the Participant's date
of death, the manner of payout elected must assure that the entire amount
payable is distributed within five (5) years of the Participant's date of
death. Notwithstanding the foregoing, if the Participant's spouse is the
Beneficiary, the beginning of such payments can be deferred until the
date the Participant would have attained age 70 Y;z or the date the
Participant would have attained Normal Retirement Age, whichever date
is earlier.
(c) If no Beneficiary is designated by the Participant or if no Beneficiary
survives the Participant for a period of thirty (30) days, the City shall pay
to the estate of the Participant a single lump sum amount equal to the
current value of any remaining payments. If a Beneficiary does not
survive the period after the Participant's death during which such
payments to the Beneficiary are to be made, then the City shall pay to the
estate of that Beneficiary a single lump sum amount equal to the current
value of such remaining payments to that Beneficiary.
VII. \VITHDRAWALS
7.01. In the case of an unforeseeable emergency prior or subsequent to the
commencement of benefit payments, a Participant may apply to the Committee
for withdrawal of an amount reasonably necessary to satisfy the emergency
need. If such application for withdrawal is approved by the Committee, the
withdrawal will be effective at the later of the date specified in the Participant's
application or the date of approval by the Committee. The approved amount
shall be payable in a lump stun within thirty (30) days of such effective date or
in some other manner consistent with the emergency need as determined by the
Committee.
7.02. For purposes of this Plan, the term "unforeseeable emergency" means a severe
financial hardship to the Participant resulting from a sudden and unexpected
illness or accident of the Participant or of a dependent (as defined in Section
152(a) ofthe Internal Revenue Code) ofthe Participant, loss of the Participants
property due to casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the Participant.
Withdrawals for foreseeable expenditures normally budgetary, such as a down
payment on a home or purchase of an automobile or college expenses, will not
be permitted. The Committee shall not permit withdrawal for unforeseeable
emergency to the extent that such hardship is or may be relieved:
(a) through reimbursement of expenditures by insurance or otherwise;
(b) by liquidation of the Participant's assets, to the extent the liquidation of
such assets would not itself cause severe fmancial hardship; or
(c) by cessation of Deferrals under the Plan.
7.03. fu no event shall the amount of a withdrawal for an unforeseeable emergency
exceed the amount of benefits which would have been available to the
Participant at the time of withdrawal. Notwithstanding any other provision of
this Plan, if a Participant makes a withdrawal hereunder, the value of benefits
under the Plan shall be appropriately reduced to reflect such withdrawal, and the
remainder of any benefits shall be payable in accordance with otherwise
applicable provisions of the Plan.
VIII. LEAVE OF ABSENCE
A Participant on an approved leave of absence with or without Compensation may
continue to participate in the Plan subject to all the terms and conditions of the Plan; provided,
further, Compensation may be deferred for such Participant if such Compensation continues
while the Participant is on an approved leave of absence.
IX. NON-ASSIGNABILITY CLAUSE
Neither the Participant nor any other person shall have any right to commute, sell,
assign, pledge, transfer or otherwise convey or encumber the right to receive any payments
hereunder, which payments and rights thereto are expressly declared to be unassignable and
nontransferable. Nor shall any unpaid benefits be subject to attachment, garnishment or
execution for payment of any debts, judgments, alimony or separate maintenance owed by the
Participant or any other person, or be transferable by operation of law in the event of
bankruptcy or insolvency of the Participant or any other person.
X. AMENDMENT OR TERMINATION OF PLAN
10.01. The City may terminate or amend the provisions of this Plan at any time;
provided, however, no termination or amendment shall affect the rights of a
Participant or a Beneficiary to the receipt of benefits with respect to any
Compensation deferred before the time of the termination or amendment, as
adjusted for the investment experience of the Investment Product of the
designated institution prior to or subsequent to the termination or amendment..
10.02. Upon termination of the Plan, the Participants in the Plan will be deemed to
have withdrawn from the Plan as of the date of such termination. The fuiJ
Compensation of all Participants will be thereupon restored on a non-deferred
basis. The City shall not distribute Plan benefits at the time of such termination;
the City shall rather retain all Deferrals and Investment Income in a deferred
compensation trust fund and shall only pay or dispose of Plan benefits as
otherwise provided in the Plan and according to the terms and conditions of the
Plan.
XI. PLAN-TO-PLAN TRANSFERS
11.0 I. This Plan shall accept for transfer amounts of Compensation previously deferred
pursuant to another "eligible" Deferred Compensation Plan established pursuant
to Section 457 of the Code and maintained by another Texas entity.
11.02. If the Participant separates from service to accept employment with or perform
services for another Texas entity which maintains an eligible Deferred
Compensation Plan pursuant to Section 457 of the Code, the amounts deferred
under this Plan shall, at the Participant's election, be transferred to such other
eligible Plan, provided such other Plan provides or is able to provide for the
acceptance of such amounts. The Participant•s election to transfer must be made
prior to the date benefits would otherwise become payable pursuant to the terms
of this Plan .
. XII. MISCELLANEOUS PROVISIONS
12.01. The intention of the City/Employer is that the Plan shall comply with the
provisions of Section 457 of the Code and the corresponding provisions of any
subsequent laws. The provisions of the Plan shall be construed to effectuate
such intention.
In the event any provision shall be determined to be illegal or invalid for any
reason, the illegal or invalid provision shall not affect the remaining parts of the
Plan and the Plan Administrator may perform such alternative acts which most
clearly carry out the intent and purpose of the Plan.
12.02. The headings of the Articles and sections of this Plan are for reference only and
shall have no substantive effect on the provisions of the plan.
12.03 This Plan shall be construed under the laws of the State of Texas.
AND IT IS SO ORDERED.
Passed by City Council on first reading this .19th day of November
Passed by City Council on second reading this lOt:b day of December
A
· Mary Andr s, Managmg Dtrector of
Human Resources
L;/cityatt/dan/deferr _comp _ ord2.com
11-10-98
...
'1998.
' 1998.
REVIEW OF DEFERRED COMP PLAN; ORD. 9781
1. Authority is Gov't Code 609, not 690.
2. Approval of governing body is required under Plan, Art. 1., per authority
ofGov't Code§ 609.107.
3.Plan Administrator is directed and supervised through an Oversight Committee.
Plan, Art. I; and § 3.02.
4. P.A. shall execute contracts for administration. Govt Code § 609.1 07;
Plan Art. I, § 3.03 ( 4).
DEFINITIONS:
5. § 2.03: The definition of "nonnal limitation" is amended to fluctuate with
amounts as set by the Sec. of Treasury, or 1/3 includible compensation. See 457e (15).
ADMINISTRATION:
6. §3.02. Re-designate the oversight committee as Chief Financial Officer,
Budget and Research Manager and managing Director.
7. § 3.03 ( l 0) add that authorized independent contractor is treated as an
employee per Gov't Code§ 609.1 09(b). ,;.
8. §3.06. Add provision that the employee must designate another qualified
investment product on failure of a vendor to continue to qualify.
9. Add § 3.10. Federal law now requires deferred amounts and investment
income to be held in trust for the exclusive benefit of participants and their beneficiaries,
and not subject to claims of the City's creditors.
10. Add § 13.11. Add limitation on liability of Oversight Committee
members. Add provision for employee responsibility for monitoring investments.
PARTICIPATION IN THE PLAN:
11. § 4.02(b): reduce minimum required deferral to $300 annually: $11.538
per pay period.
CALCULATION OF BENEFITS:
12. Add new § 5.03, REPLACING 5.03-.04. All compensation deferred and
all prope1ty purchased with such amts. And Y, shall be held in trust. See Aetna Spec. §
5.02 ..
.· ... -
( BENEFITS:
13. Amend § 6.01(a)(ii)(8), by stating that options offered are limited to those
that comply with governing state and federal law and as provided under the Investment
Product. See Aetna Spec., Sec. 6.01.
14. Amend § 6.0l(d) by adding provision for subsequent election to defer
payment ofbenefit as now permitted by law.
AMENDMENT OR TERMINATION OF PLAN:
15. Amend§ 10.01 by adding provision adjusting for investment experience.
16. Amend § 10.02 by adding that undistributed deferrals and investment
income will be held in a deferred compensation trust fund. See Gov't Code§ 609.13.
APPLICABLE LAW:
17. Change heading to MISCELLANEOUS PROVISIONS:
§ 12.01 Intent is to comply with provisions of 457 and survival of all parts
of Plan not illegal. See Aetna Spec. § 12.01
§ 12.02
§ 12.03.
,.
Headings for reference only. See Aetna Spec.§ 12.02.
This plan shall be construed under the laws ofthe State of Texas.
THE STATE OF TEXAS
COUNTY OF LUBBOCK
LUBBOCK AVALANCHE-JOURNAL
Morris Communication Corporation
~~~~~--_. ____ __
IIECOND READINQ ORDINANCE
ORDINANCE NO. tJNoo\
ORDINANCE NO. 10121
iAN ORDINANCE AMENDING
ORDIN."'NCE NO.. f1al 01:' THE • CtT'V OF' Lt18$0CI(, WM'Ib·rOR·
• ,,')! ~bribi DINANCE PROVIDED PARTICIJ· '• .. "d d t b fi th' d f. LARS OF A DEFERRED COM· . SCll e ••;ul SWOrn 0 e Ore me 1.;:,_ ______ ay0 --""U.........;:;..J...L.!:L.£C..,~-----IPENSATION PLAN FOR CITY ... · .. <···· '·· ""'·· EMPLOYEES, AND MODIFYING l')~n t ' •. • . '-IAIDOROINANCETOCDNFORM
ul;.t, ···, -~ e PHIWPHERNAND TOFEDERALANDSTATELAW. l ~ ., · ,:·" Notary r~~. .... .._, l'!o..o... of oRoJNANcE Na. rom ~.·. u~ ~~~ . l~J:~~l\15~-10 .;18 My Comrniaalon ~~Jl~~b~::~~ ~~~~c:g~·~;
QVr·!· ,• 12..()4-20()1 AVENUE Q RIGHT-OF-WAY RE· -,r, 7 ··>'. .. ..CORDED IN VOLUME SJ.!,..pAGE I
1 •• ~ l ~2, DEED RECORDS OF LUB· ·~~.' ·v) t-. , BOC:I( COUNTY, TEXAS LOCAT·
..,.,.,..,_ '•' ED IN SECTION 10, BLOCIC: B I
--........ • ,LUBBOCIC COUNTy TEXAS AND ----r-------------------------------------------------------------------------------------------~APORTIONOFANALLEYDE~ !CATION Rl!!eoRDE!D IN V : UME ~AI, P-'Ge 11-tOF r 0H"'E-I·---
j DEED RI!C~DS OF LU880CI< ICOliNTY, Tl!l<AS LOCATED IN
. TRACT 10 DF THI! STUBBS SUB·
DIVISION TO THE CITY OF LUB-i IIOC:K, LUBBOCK COUNTY, TEK· AS, AND MORE! PARTICULARLY
DESC.RIBED .IN THE BODY OF
,THIS ORDINANCE; DIRECl"'NG
.THE CITY ENGINEER TO MARK ,THE OFFICIAL MAPS OF THE retry TO REFLECT SAID ABAN·
• OONMI!:NT AND CLOSING• PRO. !VIDINQ' A SAVINGS CUUSEI ~J',tROVIDINGFOR PUBLICA· ' l R47J8 ,