HomeMy WebLinkAboutResolution - 5186 - Agreement - Prudential Mutual Fund Services Inc - Eferred Compensation Plan - 05/23/1996RESOLUTION NO.5186
May 23, 1996
Item #13
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL, OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to
execute for and on behalf of the City of Lubbock an Administrative Services Agreement on behalf
of the City with Prudential Mutual Fund Services, Inc., attached hereto and which shall be spread
upon the minutes of the Council and as spread upon the minutes of this Council shall constitute
and be a part of this Resolution as if fully copied herein in detail.
Passed by the City Council this 23rd
ATTEST:
(2
Betty A Johnson, City Secretary
APPROVED AS TO CONTENT:
Mary And -s, Managing Director of
Human Resourses
APPROVED AS TO FORM:
Harold Willard, Assistant City Attorney
HW:gs PRLTDENTL.RES
ccdocs/May 7, 1996
RESOLUTION NO.5186
May 23, 1996
Item #13
ADMINISTRATIVE
SERVICES
AGREEMENT
CITY OF LUBBOCK, TEXAS
AND
PRUDENTIAL MUTUAL FUND SERVICES, INC.
ADMINISTRATIVE SERVICES AGREEMENT
CITY OF LUBBOCK, TEXAS AND
PRUDENTIAL MUTUAL FUND SERVICES, INC.
Plan Information:
Plan Name: CITY OF LUBBOCK DEFERRED COMPENSATION PLAN
Employer: CITY OF LUBBOCK, TEXAS
Address: P O. BOX 2000, 1625 13TH STREET LUBBOCK, TX 79457
WHEREAS, the City of Lubbock, Texas (the "Contract Owner"), having
established a deferred compensation plan pursuant to the provisions of Internal Revenue
Code ("Code") Section 457, desires Prudential Mutual Fund Services, Inc. ("Prudential')
to perform certain administrative services for the Plan and to provide certain assistance to
the Plan Administrator (the "Plan Administrator") with respect to the Plan, as more fully
described in this Agreement, and Prudential is willing to perform those services; and
WHEREAS, the Contract Owner desires Prudential and the Prudential Securities
Financial Advisor ("Financial Advisor") named herein to perform certain support services
for the Plan and to provide certain assistance to the Plan Administrator with respect to the
Plan, as more fully described in this Agreement, and both Prudential and the Financial
Advisor are willing to perform those services;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the Contract Owner and Prudential hereby agree as follows:
Administrative Services Agreement
1.0 The Agreement
1.1 This Administrative Services Agreement (ASA) is made and entered into
by and between CITY OF LUBBOCK, TEXAS (referred to herein as the
"Contract Owner") and PRUDENTIAL MUTUAL FUND SERVICES,
INC., a New York corporation (referred to herein as "Prudential").
1.2 The intent of this ASA is to facilitate the administration of the City of
Lubbock Deferred Compensation Plan as it pertains to enrollment of
Participants, accounting for deferrals, the disbursement of funds, and the
proper reporting to Participants and the Contract Owner. The investment
products offered by Prudential to Participants under the Plan shall be
limited to mutual funds for which Prudential acts as transfer agent or
which are offered by Prudential for investment; provided that at least one -
ADMINISTRATIVE SERVICES AGREEMENT -- Page 2
half of those funds offered by Prudential for purchase by Participants must
be Prudential mutual funds.
1.3 Subject to Section 16. 1, the services rendered by Prudential pursuant to
this ASA, or by any third party on behalf of Prudential, shall be performed
at no cost to the Contract Owner.
1.4 The cost to Participants for the investment products and services offered
by Prudential, or by any third parry on behalf of Prudential, to such
Participants under the Plan shall be limited to those fees and charges
outlined in Prudential's Response to the Contract Owner's Request for
Proposals #13077, and no other fees or charges shall be applicable. Such
Response is incorporated herein by reference as part of this Agreement.
2.0 Definitions
2.1 Unless this ASA expressly provides otherwise, the following definitions
shall apply herein.
2.1.1 "Plan" means the Contract Owner's Deferred Compensation Plan,
attached hereto as Exhibit A and incorporated herein as part of this
Agreement. Such Plan may be amended from time to time by the
governing body of the Contract Owner. In the event of a conflict
between the Plan and this Agreement, the Plan shall be controlling,
but in no event shall Prudential be responsible for the exercise of
any discretionary function concerning the administration of the
Plan.
2.1.2 "Participant" means an employee of the Contract Owner electing
to participate in the Plan and former employees for whom an
account under the Plan is maintained.
2.1.3 "Plan Administrator" means the Contract Owner's Director of
Human Resources or her designated representative.
3.0 Term
3.1 This Agreement shall be effective immediately upon execution by both
parties and shall remain in force until terminated by either party as
provided herein.
4.0 Relationship of the Parties
4.1 Prudential shall perform its obligations hereunder as agent for the Contract
Owner but only in accordance with instructions received from the Plan
ADMINISTRATIVE SERVICES AGREEMENT -- Page 3
Administrator. Upon receiving the consent of the Plan Administrator,
Prudential shall implement investment instructions from Participants
regarding changes to the allocation of contributions and/or exchanges of
mutual funds purchased under the Plan as well as information pertaining to
particular Participants.
4.2 The Contract Owner shall not supervise or direct Prudential other than as
expressly provided in this Agreement.
4.3 Prudential agrees that all information concerning the Contract Owner's
employees and Participants obtained by Prudential as a result of this
Agreement shall be considered confidential and that the use of such
information by Prudential for purposes unrelated to the Plan shall be
prohibited.
4.4 Prudential may perform any of the services hereunder through agents and
subcontractors selected by Prudential, in its sole discretion, without notice
to, or the consent of, the Plan, the Contract Owner or the Plan
Administrator; provided, however, Prudential shall notify the Plan
Administrator not less than thirty (30) days prior to such delegation; and
provided further, that nothing in this Section 4.4 shall relieve Prudential
from its responsibility for performance of its duties hereunder.
4.5 Nothing in this Agreement shall be deemed to impose any obligations on
Prudential or any employee or affiliate of Prudential to monitor, control or
in any way exercise any responsibility in determining the amount of any
Plan contribution, determining whether any Plan contribution meets or
exceeds any limit under applicable law, or otherwise determining whether
the Plan is established, operated or administered in such a way to be in
compliance with applicable federal, state or local law, including the
requirements of Section 457 of the Internal Revenue Code.
4.6 Nothing in this Agreement shall be deemed to impose any obligations on
Prudential or any employee or affiliate of Prudential to monitor, control or
in any way exercise any responsibility in determining whether or not a
Participant under the Plan is eligible for a distribution in compliance with
Section 457 of the Internal Revenue Code.
5.0 Services to be Performed
5.1 Prudential representatives shall without cost to the Contract Owner offer
those investment products described in Section 1.2 above to Participants
which are permitted by Federal and State laws governing the Plan. Such
services to be provided by Prudential include, but are not necessarily
limited to, the following:
ADMINISTRATIVE SERVICES AGREEMENT -- Page 4
5.1.1 Coordinating the enrollment process of Contract Owner's
employees.
5.1.2 Preparing and conducting all group meetings and presentations at
which Prudential's investment products and services are discussed
with Contract Owner's employees.
5.1.3 Arranging and coordinating all group meetings through the Plan
Administrator and department heads.
5.1.4 Preparing and distributing to Participants, at no cost to the Contract
Owner, literature, pamphlets and other written materials promoting
the investment products and services described herein.
5.1.5 Utilizing uniform, standardized forms for enrollment and other
services offered by Prudential under the Plan. (Any form provided
by Contract Owner to Prudential which contains information upon
which Prudential must rely in order to perform services under this
Agreement must be approved by Prudential prior to use.)
5.1.6 Subject to Section 16. 1, providing the following services to the
Contract Owner and Participants who purchase investment
products described in Section 1.2 above under the Plan at no cost
to either the Contract Owner or the Participants other than as
described in Subsection 1.4 of this Agreement.
- Offering toll-free telephone number to Participants.
- Designation of primary Participant contact.
- Establishment of Plan and Participants on Smartpath-
recordkeeping system so that Contract Owner can maintain
records for Participants and government reporting purposes.
- Providing employer reports and statements to Participants
regarding mutual fund investments.
- Processing mutual fund purchases, allocation changes and
exchanges.
- Processing mutual fund distributions and distribution
withholdings by remitting all tax withholding as agent of the
contract Owner for deposit with the appropriate tax authority
(using the Contract Owner's tax identification number),
provided the Plan Administrator provides necessary withholding
information.
ADMINISTRATIVE SERVICES AGREEMENT -- Page 5
5.1.7 Interfacing Prudential's electronic data processing system with the
Contract Owner's electronic data processing equipment, provided
that system compatibility exists between Prudential and Contract
Owner's systems.
5.2 In addition to other administrative services and reports herein described,
Prudential or an affiliate to which it has delegated certain responsibilities,
shall:
5.2.1 Disburse all benefits directly to Participants and provide a
distribution report to Plan Administrator so that she can provide
Prudential, as agent for the Contract Owner, with all necessary
information, including employer identification number, social
security numbers of Plan Participants and income tax withholding
information pertaining to each Participant, so that each Participant
and Prudential can file appropriate forms with all taxing
authorities.
5.2.2 Produce and distribute quarterly individual statements to
Participants whose accounts with Prudential have had activity
during a reporting period or have value as of the end of such
period.
5.2.3 Confirm each mutual fund exchange transaction applied to a
Participant's account through confirmation statements.
5.2.4 Confirm contributions to Contract Owner through a contribution
journal.
5.2.5 Credit contributions to selected investment products as soon as
funds are received by Prudential in good, processable order.
5.2.6 Maintain individual account records for each Participant who
invests in the investment products described in Section 1.2 hereof.
5.2.7 Effect appropriate transfers among investment products as directed
by the Participants.
5.3 Prudential agrees to provide the Plan Administrator with a toll-free
customer service number for Participant inquiries.
5.4 The Plan Administrator shall notify Prudential in writing of the
Participants entitled to receive disbursements under the terms of the Plan.
ADMINISTRATIVE SERVICES AGREEMENT -- Page 6
5.5 Prudential shall issue the disbursements directly to each Participant in
accordance with the provisions of this Agreement and the Plan to the
extent funds are available in each such Participant's account.
6.0 Benefit Payments
6.1 Prudential, upon receiving instructions from the Plan Administrator, shall
permit Participants who purchase investment products available under the
Plan {as described in Section 1.2} to receive from Prudential the value of
their accounts in a single lump sum payment or through systematic
withdrawals, subject to the Plan and to Federal and State laws governing
such disbursements.
7.0 Financial Management System
7.1 Prudential shall establish and maintain a financial management system for
the purposes of this Agreement in accordance with generally accepted
accounting practices and procedures including, for each disbursement:
7.1.1 A record of all notifications from the Plan Administrator
concerning Participants who are to receive disbursements under
Article 5.0 of this ASA.
7.1.2 Statements of gross disbursements under Article 5.0 of this ASA.
8.0 Financial Reporting and Audits
8.1 Prudential shall furnish directly to each Participant:
8.1.1 Quarterly statements 'indicating the Participant's account balances
and all financial activity which occurred during the reporting
period.
8.1.2 Confirmation statements for mutual fund exchanges after each such
transaction.
8.1.3 As agent for the Contract Owner, Internal Revenue Service tax
reporting forms for distributions made to Participants.
8.2 Prudential shall furnish to the Contract Owner:
8.2.1 Quarterly statements contained in Prudential's distribution report
of each and every disbursement made under Article 5.0 of this
ASA.
A,DMTNISTRATIVE SERVICES AGREEMENT -- Page 7
8.2.2 A Contribution Journal confirming all contributions received by
Prudential for the Plan (sent to the Plan Administrator on the next
business day following processing of such contributions).
8.2.3 A Quarterly Confirmation Report which includes all contribution
and Participant activity generated during the quarter plus quarter
end account values.
8.2.4 A Quarterly Group Total Page summarizing the financial activity
for the quarter.
8.2.5 Annual year-end summaries, if requested by the Plan
Administrator.
9.0 Records Management
9.1 Except as otherwise provided herein, Prudential shall retain all of its
financial records and supporting documents, correspondence and other
written materials pertaining to the Plan for three years following the date
of termination of this ASA. Prudential may retain such records and
documents on microfilm, microfiche, optical storage or any other process
which accurately reproduces or forms a curable medium for reproducing
the original. The Plan Administrator has the right to make duplicate
copies at the Contract Owner's expense.
9.2 If an audit by, or on behalf of, the Contract Owner has begun but has not
been completed at the end of the three-year period, or if audit findings
have not been resolved at the end of the three-year period, Prudential shall
retain the records described in Subsection 9.1 until audit findings are
resolved.
9.3 If, for any reason, Prudential ceases operations prior to the expiration of
the records retention period required by this Article 9.0, all records
described in Subsection 9.1 shall, upon request of the Plan Administrator,
be made available to the Plan Administrator.
9.4 In case of errors or loss of data caused by power failure, mechanical
difficulties with information storage and retrieval systems, or other events
not attributable to its own negligence or willful misconduct of its agents or
subcontractors, Prudential's sole obligation will be, at its own expense, to
use its reasonable efforts to reconstruct any records maintained by
Prudential and to amend any reports prepared by it which may have been
affected by such event. Performance by Prudential of its obligations under
this Agreement is subject to appropriate adjustment and extension of time
in the event of strike, fire, war, insurrection, riot, electrical failure or any
ADMINISTRATIVE SERVICES AGREEMENT -- Pa(,e 8
other event that would constitute force majeure or a circumstance beyond
Prudential's control.
9.5 Upon reasonable written request and during normal business hours,
Prudential shall allow the Plan Administrator full and complete access to
all records required to be maintained by Prudential in providing services to
the Contract Owner or Participants under this Agreement.
9.6 The Contract Owner, at its own expense, shall have the right upon
reasonable notice in writing, exercised directly or through its independent
auditors, to examine and audit Prudential's records in order to determine
Prudential's compliance with the terms and conditions contained in this
Agreement.
10.0 Termination
10.1 This Agreement may be terminated by Prudential or the Contract Owner
without any further liability by either party for any obligation maturing
subsequent to the date of termination, upon thirty (30) days written notice
to the other party.
10.2 Within ninety (90) days of termination of this Agreement, Prudential shall
deliver to the Contract Owner any reports required by this Agreement
which have not already been provided.
10.3 Termination of this Agreement will not affect any obligation of Prudential
under Section 5.0 of this ASA to Participants who have become entitled to
benefit payments under Section 6.0 and the Plan prior to the termination of
this Agreement.
10.4 In the event of termination of this Agreement, Prudential shall provide
Contract Owner the records described in Subsection 9.1.
11.0 Nondiscrimination
11.1 Prudential agrees to supply to the Contract Owner its policies with respect
to nondiscrimination and affirmative action.
12.0 Nonwaiver
12.1 The failure of the Contract Owner or Prudential at any time to enforce a
provision of this Agreement shall in no way constitute a waiver of the
provision, nor in any way affect the validity of this Agreement or any part
hereof, or the right of the Contract Owner or Prudential thereafter to
enforce each and every provision thereof.
ADMINISTRATIVE SERVICES AGREEMENT -- Page 9
13.0 Assignments
13.1 Subject to Section 4.4, Prudential may perform any of the services
hereunder through agents and subcontractors selected by Prudential, in its
sole discretion, without the consent of the Contract Owner or the
Participants; provided, however, that nothing in this Section 13.1 shall
relieve Prudential from responsibility for performance of its duties
hereunder.
14.0 Amendment
14.1 The parties may amend this Agreement only by subsequent written
agreement and approval by an authorized representative of Prudential and
the Contract Owner.
15.0 Notices
15.1 Any notices provided for herein shall be in writing and shall be deemed to
have been given when received by:
15.1.1 United States mail addressed as follows:
Contract Owner: DIRECTOR OF HUMAN RESOURCES
CITY OF LUBBOCK
1625 13TH STREET"
P. O. BOX 2000
LUBBOCK, TX 79457
Prudential: TODD LEAKE or DAVID BARBER
PRUDENTIAL SECURITIES
5211 BROWNFIELD HIGHWAY
SUITE 200
LUBBOCK, TX 79407
15.1.2 To such other persons at such other addresses which the Contract
Owner or Prudential may, from time to time, designate in writing.
16.0 Insurance and Indemnification
16.1 The Contract Owner shall provide Prudential with timely, accurate and
complete information as Prudential shall deem necessary or appropriate in
order to perform its obligations hereunder. Prudential shall be entitled to
rely on all information provided by the Plan, the Contract Owner, the Plan
Administrator, a third party appointed by the Contract Owner or any
ADMINISTRATIVE SERVICES AGREEMENT -- Page 10
Participant or beneficiary as being accurate and complete in all respects
and shall have no obligation hereunder to independently determine the
accuracy or completeness of any such information. Prudential shall not be
responsible for errors in services or reports resulting from erroneous
information so provided and Prudential shall not be liable for any error,
omission or failure to perform under this Agreement if such error,
omission or failure was the result of inaccurate, untimely or incomplete
information provided to Prudential by the Plan, the Contract Owner, a
third party appointed by the Contract Owner or any Participant or
beneficiary. The Contract Owner shall pay Prudential in accordance with
Prudential's standard hourly fee (currently $75 per hour) for any additional
or redundant services which Prudential performs as a result of its receipt of
inaccurate, untimely or incomplete information from the Plan, the Contract
Owner, a third party appointed by the Contract Owner or any Participant
or beneficiary. In the event this fee is increased or decreased, the Plan
Administrator shall receive thirty (30) days advance notice prior to such
change.
16.2 The Contract Owner shall hold harmless and indemnify Prudential and its
employees, agents and subcontractors, the Contract Owner shall have no
claim against Prudential, and Prudential shall not be liable to the Contract
Owner for any action, conduct or activity, including the failure to take
action or perform any activity, related to monitoring, controlling or in any
way exercising any responsibility in determining the amount of any Plan
contribution, determining whether any Plan contribution meets or exceeds
any limit under applicable law, or otherwise determining whether the Plan
is established, operated or administered in such a way to be in compliance
with applicable federal, state or local law, including the requirements of
Section 457 of the Internal Revenue Code.
16,3 The Contract Owner shall hold harmless and indemnify Prudential and its
employees, agents and subcontractors, the Contract Owner shall have no
claim against Prudential, and Prudential shall not be liable to the Contract
Owner for any action, conduct or activity, including the failure to take
action or perform any activity, related to monitoring, controlling or in any
way exercising any responsibility in determining whether or not a
distribution should take place or whether the Plan is established, operated
or administered in such a way to be in compliance with applicable federal,
state or local law, including the requirements of Section 457 of the Internal
Revenue Code.
16.4 Prudential hereby agrees to indemnify and hold harmless the City of
Lubbock and its components, its governing body, employees, Participants
and beneficiaries with respect to any and all claims, demands, or causes of
action which may be made by reason of the willful misconduct or
ADMINISTRATIVE SERVICES AGREEMENT -- Page 1 1
negligence of Prudential or any parry to which it has delegated any of its
obligations under this Agreement for Prudential's or such party's failure to
perform the services agreed to under this Agreement.
16.5 If a brokerage account is established pursuant to the Plan, Prudential shall
maintain S.I.P.C. insurance with respect to such account during the term of
this Agreement.
16.6 Prudential shall ensure that all of its employees who provide investment
products or services to the Contract Owner or Participants under the Plan
shall be bonded for not less than $10,000,000.
16.7 Prudential does not render investment advice, is not the Plan
Administrator, trustee or a fiduciary to the Plan, and does not provide
legal, tax or accounting advice with respect to the creation, adoption or
operation of the Plan.
17.0 Jurisdiction: Choice of Law
17.1 The Laws of the State of Texas shall govern the rights and obligations of
the parties under this Agreement and this contract shall be executed in
Lubbock County, Texas.
18,0 Integration
18.1 This instrument and any written appendices and amendments hereto
embody the entire agreement of the parties. Prudential shall not be
responsible for the performance of any duties or functions not specifically
provided for in this Agreement. There are no promises, terms, conditions
or obligations other than those contained herein and this Agreement shall
supersede all previous communications, representations and agreements,
either oral or written, between the parties hereto with respect to this
Agreement unless incorporated by reference.
ADMINISTRAkTIVE SERVICES AGREEMENT -- Page 12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
this 23rd day of May , 1996.
CITY OX LU EXAS PRUDENTIAL MUTUAL FUND
SERVIC S, INC.
Y:
AVID R. LA GSTON, t6OR
ATTEST: REVIEWED AND APPROVED:
Betty A Johnson, City Secretary Counsel
APPROVED AS TO CONTENT:
—Al�v dll�x� —
Mary An ws, Director of Duman Resources
APPROVED AS TO FORM:
arold Willard, Assistant City Attorney
HW : da/dtyattJa-prudtl.doc.
May 7, 1996
ADMINISTRATIVE SERVICES AGREEMENT -- Page 13