HomeMy WebLinkAboutOrdinance - 7809-1979 - Amending Ordinance 7675 Deferred Compensation Plan - 02/22/1979JCR:cl ORDINANCE·NO. 7809
AN ORDINANCE AMENDING ORDINANCE NO. 7674 OF THE CITY OF LUBBOCK TO SET OUT
THE PARTICULARS OF THE ESTABLISHMENT OF A DEFERRED COMPENSATION PLAN FOR CITY
OF LUBBOCK EMPLOYEES.
WHEREAS, the City Council heretofore enacted Ordinance No. 7674 which
authorized a deferred compensation plan for City of Lubbock employees; and
WHEREAS, such ordinance, while establishing the authority for such plan,
did not set forth particular details, definitions or regulations for participatio1
or administration of such plan; NOW THEREFORE:
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT Ordinance No. 7674 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
Article 6252-3b, V.T.C.S., hereby establishes the City of Lubbock
Employees Deferred Compensation Plan, hereinafter referred to as
the "Plan", the purpose of which is to attract and hold certain
individuals by permitting them to enter into agreements with
the City which will provide for monthly payments 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 agreement between the Participant and the City and nothing
contained herein shall be deemed to give a Participant any right to be
retained in the employ of the City. Nothing herein shall be construed
to modify the terms of any employment agreement between a Participant
and the City, this Plan being intended as a supplement thereto.
This Deferred Compensation Plan shall until otherwise directed by
the City Council, be implemented and serviced by Aetna Variable Annuity
Life Insurance Company.
I I. DEFINITIONS
2.01
2.02
Compensation: The total annual remuneration for employment
or contracted services received by the Participant from
the City.
Includible Compensation: The remuneration for service
performed for the City which is currently includible
in gross income.
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2.03 Deferred Compensation: The amount of Compensation not
yet earned which the Participant and the City shall
mutually agree, as designated in the Participation
Agreement which is made a part hereof, shall be deferred
in accordance with the provisions of this Plan, subject
to the following limitations:
2.04
2.05
2.06
2.07
2.08
(a) The maximun that may be deferred under this Plan
for the taxable year (except as provided in para-
graph 2.03(b) is the lesser of
(1) $7,500, or
(2) 33 1/3% of the Participant's includible com-
pensation.
(b) For any one or more of the Participant's last
three taxable years ending prior to his Retirement,
as defined in paragraph 2.04, the limitation set
forth in paragraph 2.03(a) shall be the lesser
of:
(1) $15,000, or
(2) the sum of the limitation set forth in para-
graph 2.03(a) and so much of that limitation
which has been underutilized since January 1, 1979.
Retirement: The withdrawal from service of the City
with a retirement allowance to which the Participant
is entitled by reason of his employment with the City.
Beneficiary: Beneficiary of beneficiaries designated
by the Participant in the Participation Agreement.
If more than one designated beneficiary survives the
Participant, payments shall be made equally to all
such beneficiaries, unless otherwise provided in the
beneficiary designation. Nothing herein shall prevent
the Participant from designating primary and secondary
beneficiaries. Elections made by a Participant in the
Participation Agreement shall be binding on any such
beneficiary or beneficiaries when such elections are
applicable.
Termination of Services: The serverance of the Partici-
pant's contract or employment with the City for any
reason other than retirement.
Participant: Any person who fulfills the eligibility
and enrollment requirements of Article IV.
Participation Agreement: Written agreement between
the City and a Participant setting forth certain pro-
visions and elections relative to the Plan, incorporating
the terms of the Plan and establishing the Participant's
deferral and participation in the Plan.
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III. ADMINISTRATION
This Plan shall be administered by a committee of not less than
three (3) persons appointed by the City Manager, hereinafter referred
to as the "Committee".
The Committee shall represent the City in all matters concerning
the administration of this Plan. The City Manager may remove a Com-
mittee member for any reason by giving him ten (10) days written notice,
and fill any vacancies thus created.
The Committee shall have full power and authority to adopt rules
and regulations for the administration of the Plan, provided they are
not inconsistent with the provisions of this Plan, and to interpret,
alter, amend or revoke any rules and regulations so adopted. Members
of the Committee shall be eligible to participate in the Plan, but
no member of the Committee shall be entitled to participate in dis-
cussions relating to his or her own participation.
IV. PARTICIPATION IN THE PLAN
4.01 Eligibilitx: Any permanent employee (officer, Connnissioner,
elected or appointed official or independently contracted
person) who the City designates as eligible to participate,
and who executes a Participation Agreement.
4.02 Enrollment in the Plan:
(a) An eligible person, with respect to participation
connnencing in the initial year of the Plan,.may become
a Participant prior to or within a reasonable time
after the Plan becomes effective by agreeing to defer
compensation not yet earned. A newly eligible
person may become a Participant at any time in
the year he first becomes eligible to participate
provided the election to defer compensation is
made within a reasonable time after eligibility
occurs. Thereafter, a new Participant may agree to
defer compensation not yet earned, but such agreement
must be made prior to the beginning of the calendar
year in which it is to become effective.
(b) At the time of entering into an agreement hereunder
to defer compensation or at the time of re-entry
following a withdrawal, a Participant must agree
to defer a minimum amount of $650.00 per year.
(c) A Participant who defers compensation may not
modify such agreement to change the amount deferred
except with respect to compensation earned in
the subsequent calendar year or except as provided
in Article VII hereof with respect to withdrawals.
(d) A Participant may at any time revoke his agreement
to defer compensation by notifying the City Manager
in writing 30 days prior to the effective date
of the termination, however, his accrued benefits
shall only be paid as provided in Articles V and VI.
(e) A Participant who has withdrawn as set forth in
Article VIII or revoked as set forth in (d) above
may again become a Participant by executing a
new agreement to defer compensation not yet earned,
but such agreement must be made prior to the begin-
ning of the calendar year in which it is to become
effective.
V. BENEFITS ON RETIREMENT
5.01 If the Participant continues in the service of the City
until his retirement, the Committee shall, beginning
on the 15th day of the month following the date of
such retirement, pay to such Participant, in accordance
with elections in the Participation Agreement:
(a) A fixed monthly payment equal to the amount which
would have been payable under a fixed annuity contract
had such a contract been purchased from the Aetna
Variable Annuity Life Insurance Company with the
Participant included as the Annuitant thereunder,
and had the method of payment selected been as
specified in his Participation Agreement, with
an annual premium equal to that portion of his
Deferred Compensation as specified in his Parti~
cipation Agreement; or
(b) A fixed monthly payment equal to the amount which
would have been payable under a life insurance
contract on the life of the Participant for whom
such payments are being determined had such a
contract been purchased from the Aetna Life Insur-
ance Company, and had the method of payment selected
been as specified in his Participation Agreement,
with an annual premium equal to that portion of
his Deferred Compensation as specified in his
Participation Agreement; or
(c) A fluctuating monthly payment equal to the amount
which would have been payable under a variable
annuity contract with respect to the Participant
for whom such payments are being determined had
such a contract been purchased from the Aetna
Variable Annuity Life Insurance Company, with
such Participant included as the Annuitant there-
under, and had the method of payment selected
been as specified in the Participation Agreement,
with an annual premium equal to that portion of
deferred compensation as designated in the Partici-
pation Agreement; or
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(d) Any combination of (a) through. (c) above, as sp~cified
in the Participation Agreement:
(e) The Participant's payment election under this Section
5.01 must be made prior to the earliest distribution
date thereof and cannot thereafter be modified.
5.02 Notwithstanding anything which appears in Section 5.01,
nothing herein shall require the City to purchase such
contracts, but in the event the City shall purchase
such contracts, it shall not be required to exercise
any option, election, or right with respect to such
contracts, or if it wishes to exercise any option,
election or right under such contracts, it shall not
be required to exercise such option, election or right
in any particular manner.
5.03 Should the Participant die at any time after Retirement,
whether prior to or after he has begun .to receive the
Retirement payment (s) provided by Section 5.01, his
designated Beneficiary or Beneficiaries shall be entitl-
ed to receive the balance remaining of such payment(s).
If no Beneficiary is designated as provided in Article
11 of this Agreement, or if the designated Beneficiary
does not survive the period during which such payment(s)
are to be made, then the executors or administrators
of the Participant shall receive a lump-sum amount
equal to the current value of such payment(s).
VI. BENEFITS ON TERMINATION OF SERVICES OR DEATH PRIOR TO RETIREMENT
6.01 In the event the Participant terminates his Services
for reasons other than Retirement, the City shall pay
to the Participant, as specified in his written agreement
with the City, an amount equal to what would be available
under the contracts. described in Section 5.01.
6.02 In the event the Participant dies before his Retirement
or prior to receiving the benefit provided for in Section
6.01, his Beneficiary or Beneficiaries shall be entitled
to receive a death benefit equal to that which shall
be available under the contract described in Section
5.01: If no Beneficiary is designated as provided in
Article 11, or if the designated Beneficiary does not
survive the Participant for a period of 30 days, then
the executors or administrators of the Participant
shall receive the benefit in a lump sum.
VII. WITHDRAWALS
7.01 For serious financial reasons a Participant may apply
to the Committee for a withdrawal from thePlan prior
to Retirement or other termination of the Participant's
service with the City. Such early withdrawal shall
be permitted only in the event.of real emergencies
which are beyond the Participant's control, are not
foreseeable by the Participant, and which will cause
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the Participant great financial hardship if early with-
drawal is not permitted. Serious financial reasons
shall include the following: bankruptcy or impending
bankruptcy, unexpected and unreimbursed major expenses
resulting from illness to person or accident to person
or property or other types of unexpected and unreimbursed
expenses of a major nature that would not normally be
budgetable. Withdrawals for foreseeable expenditures
normally budgetable such as down payments on a home
or purchase of an auto or college expenses will not
be permitted.
7.02 The amount withdrawable will be an amount equal to
what would be available under the contracts described
in Section 5.01 at the time of withdrawal or the amount
necessary to meet the emergency situation, as deter-
mined by the Committee, whichever is the lesser.
7.03 Upon approval by the Committee of the withdrawal, the
participant shall be treated under this Plan as if he
had terminated, and the City shall on the fifteenth
{15th) day of the month following such approval, pay
or cause to be paid to the Participant the amount with-
drawable in lump sum. Following a withdrawal, a Parti-
cipant's compensation will be restored to the sum to
which said Participant is entitled by reason of his
employment with the City. Any remaining benefits shall
be payable according to otherwise applicable sections
of the Plan.
VIII. LEAVE OF ABSENCE
8.01 If a Participant is on an approved leave of absence
from the City with compensation, or on an approved
leave of absence without compensation for a period of
not more than six {6) months, his participation in
this Plan will continue.
8.02 If a Participant is on an approved leave of absence
without compensation and such leave of absence continues
for more than six months, said Participant will be
deemed to have withdrawn from the Plan as of the end
of such six month period. The Committee shall treat
such Participant as if he had terminated his services
and pay such benefit or benefits as provided in Section
6.01; however, such payments will not be made until
the Participant has terminated his services, retired
or died.
IX. A?-rENDMENT OR TERMINATION OF PLAN
9.01 The City Council may at any time terminate this Plan.
Upon such termination, the Participants in the Plan
will be deemed to have withdrawn from the Plan as of
the date of such termination, the Participant's full
,. ,-compensation on a non-deferred basis will be thereupon
restored and the Committee shall treat such Participants
as if they had terminated their services on the date
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of the termination and such benefit or benefits as
provided for in Section 6.01.
9.02 The City Council may also amend the provisions of this
plan at any time; provided, however, that no amendment
shall affect the rights of Participants or their Bene-
ficiaries to the receipt of payment of benefits, to
the extent of any compensation deferred before the time
of the amendment, as adjusted for investment experience
under the contracts described in Section 5.01 prior
to and subsequent to the amendment.
X. NON-ASSIGNABILITY CLAUSE
It is agreed that neither the Participant, nor his Beneficiary nor
any other designee, shall have any right to commute, sell, assign,
transfer, or otherwise convey the right to receive any payments here-
under which payments and rights thereto are expressly declared to be
non-assignable and non-transferable; and in the event of any attempted
assignment or transfer, the City shall have no further liability here-
under; nor shall any unpaid benefits be subject to attachment, garnish-
ment or execution. or be transferable by operation of law in event of
bankruptcy, insolvency, except to the extent otherwise required by
law.
XI. AMOUNTS DEFERRED-SOLE PROPERTY OF THE CITY
All amounts of compensation deferred under this Plan. all property
and rights which may be purchased by the City with such amounts and
all income attributable to such amounts, property or rights shall remain
solely the property and rights of the City (without being restricted
to the provision of benefits under this Plan) subject only to the
claims of the City's general creditors. It is understood that the City
is not obligated hereby to purchase any property or rights to support
the promises made under this Plan.
XII. APPLICABLE LAW
This Plan shall be construed under the law of the State of Texas.
Passed by the Council on
Passed by the Council on
APPROVED AS TO.FORM: /
AND IT IS SO ORDERED.
first reading this 8thday of February
second reading t~
WEST, MA OR
....
,1979.
,1979.
Administration