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HomeMy WebLinkAboutResolution 98-32 06/01/1998 : -.n~/ "-"f"" - /' . SPRINGFIELD NO. 98- 32 A RESOLUTION OF THE CITY OF SPRINGFIELD AMENDING THE CITY OF SPRINGFIELD, OREGON MONEY PURCHASE PENSION PLAN; AND AMENDING THE CITY OF SPRINGFIELD, OREGON RETIREMENT PLAN. WHEREAS, by Resolution No. 98-13 the City of Springfield adopted certain amendments to the City of Springfield, Oregon Money Purchase Pension Plan (the "Pension Plan") and to the City of Springfield, Oregon Retirement Plan (the "Retirement Plan"); and WHEREAS, the City of Springfield desires to amend the Pension Plan and the Retirement Plan to give limited authority to the City Manager to adopt amendments to those Plans; and . WHEREAS, the City of Springfield desires to amend the Retirement Plan to (1) designate First Colony Life Insurance Company as the company through which annuities will be purchased for Participants, (2) reflect in the Retirement Plan the provisions in ORS 236.620(2) allowing transferred employees to continue to participate in the Retirement Plan, (3) clarify the manner in which the additional benefit provided to Public Safety Employees to compensate them for taxation of their benefits applies to benefits assigned in domestic relations orders, (4) conform the Retirement Plan to changes in law regarding veterans' reemployment rights, domestic relations orders, and limits on benefits the Retirement Plan may provide, and (5) provide for a mandatory lump sum benefit for amounts that are too small to buy an annuity or installment contract; ) NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Springfield as follows: Section 1. Section 2.7. of the Retirement Plan is amended to read as follows: 2.7. Insurance Company: For distributions before June 10, 1998, Pacific Life Insurance Company. For distributions after June 9, 1998, First Colony Life Insurance Company. Section 2. The Retirement Plan is amended by renumbering Sections 3.1.c. and 3.1.d. as in effect immediately before this Resolution as Sections 3.1.d. and 3 .1.e. respectively and by adding the following new Section 3.1.c. immediately after Section 3.1.b.: c. Any former Employee who has transferred to another public employer and has elected under ORS 236.620(2), as in effect with respect to the Employee, to continue to participate under this Plan, but only for the period allowed by ORS 236.620(2) as in effect with respect to the Employee. . RESOLUTION NO. 98-32 Page 1 . . . .,' '. Section 3. Section 3.1.d. of the Retirement Plan as in effect after the amendment in Section 2. of this Resolution is amended to read as follows: d. Any person who is not eligible to participate in the Plan under Section 3.1.a., 3.1.b., or 3.1.c. above and who has an Accrued Benefit, but only with respect to the crediting provided in Section S.1.d. Section 4. Section 4.2. of the Retirement Plan is amended to read as follows: 4.2. EMPLOYER CONTRIBUTIONS. The Employer shall at least annually contribute to the Plan the additional amounts, if any, required to fund the benefits provided under the Plan, other than the benefits provided under Section 6. that have not been distributed, as determined at least annually by the Plan's actuary. The employer of any former Employee eligible to participate in this Plan as provided in Section 3.1.c. shall contribute to the Plan the additional amounts, if any, required to fund the benefits provided under the Plan v.ith respect to the former Employee, as determined from time to time by the Plan Administrator. Section 5. Section 5.1.a. of the Retirement Plan is amended to read as follows: a. For each calendar month after December 31, 1997. there shall be credited to each Participant's Employer Contribution Account and Pick-up Account the following percentages of the Participant's Monthly Earnings for that month: If the Panicipant is described in a row in this column: Credit to the Panicipant's Employer Contribution Account the percentage stated in the corresponding row in this column: Credit to the Panicipant's Pick-up Account the percentage stated in the corresponding row in this column: A Public Safety Employee A full-time Employee who is a Police Dispatcher or Property Controller The percentage in Section 5.1.b. 10% 7% 7% A full-time Employee who is not a Public Safety Employee, Police Dispatcher, or Property Controller 7% 7% Whether a Participant is a full-time Employee shall be determined in the Employer's sole discretion. Participants shall be ineligible for the crediting provided in this Section 5.1.a. to the extent provided in Section 3,1.b. and 3.1.d. Any Participant described in Section 3.1.c. shall be treated as described in the row in the first column above that the Plan Administrator determines is appropriate for the Participant under ORS 236.620(2). Section 6. Section 6.2.c. of the Retirement Plan is amended to read as follows: c. An Eligible Employee is any Employee who before July 14, 1995, was a Participant in this Plan as a Public Safety Employee and whose last Severance of Employment occurred or occurs while the Employee is a Public Safety Employee and either occurred before January 1, 1991, for a reason other than the Employee's death or occurred or occurs after December 31, 1990, for any reason. If any portion of an Eligible Employee's Accrued Benefit is distributed to an alternate payee under a qualified domestic relations order, the requirement that the Employee's last Severance of Employment occur while the Employee is a Public Safety Employee is deemed to be satisfied if the Employee was a Public Safety Employee on the last day of the last calendar month ending before the date of the distribution. RESOLUTION NO. 98-32 Page 2 . . . '.' " Section 7. Section 6.3. of the Retirement Plan is amended to read as follows: 6.3. DISTRIBUTION OF BENEFIT. Upon distribution of an Eligible Employee's Accrued Benefit in a calendar year in which distributions under this Plan are not exempt from Oregon personal income laxation, the amount of the distribution shall be increased by the greater of the following amounts: a. The amount determined by multiplying the Eligible Payments of the Eligible Portion of the Employee's Accrued Benefit by the following percentage: If the Employee's months of participation at the Employee's last Severance of Employment are: The percentage is: Less than 120 At least 120 but not 240 At least 240 but not 300 300 or more o percent 1 percent 2-1/2 percent 4 percent b. The amount determined by multiplying the Eligible Payments of the Eligible Portion of the Employee's Accrued Benefit by the percentage determined under the following formula: ( .~1 - 1) ( the Emplovee's months of participation before October 1, 1991) the Employee's months of participation For purposes of this Section 6.3., the Employee shall be credited with a month of participation for each calendar month for which a contribution was made, or for which a credit under Section 5.1.a. is made, on behalf of the Employee as a Public Safety Employee to the Employee's Employer Contribution Account. However, months of participation shall not be credited for months for which credits are made under Section 5.1. a. by reason of Section 5.1.c. or were made under Section 4.6 as stated immediately before the January 20, 1998, restatement of the Plan. If any portion of an Eligible Employee's Accrued Benefit is distributed to an alternate payee under a qualified domestic relations order, the Employee's months of participation shall be credited through the last calendar month ending before the date of the distribution. Section 8. The Retirement Plan is amended by renumbering Sections 7. through 13. as in effect immediately before this Resolution as Sections 8. through 14. respectively and by adding the following new Section 7. immediately after Section 6.: SECTION 7. VETERANS' REEMPLOYMENT RIGHTS 7.1. APPLICATION AND DEFINITION. This Section 7. applies despite any other provision of this Plan. For purposes of this Section 7., qualified military service means-any service in the uniformed services (as defined in chapter 43 of title 38, United States Code ("Chapter 43 ")) by any individual if the individual is entitled to reemployment rights under Chapter 43 with respect to such service. 7.2. SERVICE, BENEFIT, AND CONTRIBUTION REQUIREMENTS, The Employer shall be treated as meeting the requirements of Chapter 43 only if each of the following requirements is met: a. An individual reemployed under Chapter 43 is treated with respect to this Plan as not having incurred a break in service with the Employer by reason of the individual's period of qualified military service. RESOLUTION NO. 98-32 Page 3 . . . " b. Each period of qualified military service served by an individual is, upon reemployment under Chapter 43, deemed with respect to this Plan to constitute service with the Employer for the purpose of determining the accrual of benefits under this Plan. c. An individual reemployed under Chapter 43 is entitled to accrued benefits that are contingent on the making of, or derived from, employee contributions only to the extent the individual makes payment under this Plan with respect to the employee contributions. (1) No such payment may exceed the amount the individual would have been permitted or required to contribute had the individual remained continuously employed by the Employer throughout the period of qualified military service. (2) Any payment under this Plan shall be made during the period beginning with the date of reemployment and whose duration is 3 times the period of the qualified military service (but not greater than 5 years). 7.3. ALLOCATION OF EARNINGS. No provision of Chapter 43 or this Section 7. shall be construed as requiring any crediting of earnings to an Employee with respect to any contribution before the contribution is actually made. 7.4. YEAR TO WHICH CONTRIBUTION LIMITS APPLY. If any contribution is made by an Employee under this Plan and the contribution is required by reason of the Employee's rights under Chapter 43 resulting from qualified military service: a. The contribution shall not be subject to any otherwise applicable limitation in IRC Section 415 and Section 10., and shall not be taken into account in applying those limitations to other contributions or benefits under this Plan or any other plan, for the year in which the contribution is made. b. The contribution shall be subject to the limitations in IRC Section 415 and Section 10. for the year to which the contribution relates (in accordance with rules prescribed by the Secretary of the Treasury). For purposes of this Section 7.4., any employee contribution made under Section 7.5. shall be treated as required by reason of the Employee's rights under Chapter 43. 7.5. MAKE-UP OF EMPLOYEE CONTRIBUTIONS. If an Employee is entitled to the benefits of Chapter 43 with respect to employee contributions under this Plan, the Employer shall be treated as meeting the requirements of Chapter 43 with respect to the employee contributions only if the Employer permits the Employee to make additional employee contributions under this Plan (in the amount determined under Section 7.6. or such lesser amount as is elected by the Employee) during the period that begins on the date of the reemployment of the Employee with the Employer and has the same length as the lesser of: a. The product of 3 and the period of qualified military service that resulted in such rights; and b. 5 years. 7.6. LIMITS ON MAKE-UP OF EMPLOYEE CONTRIBUTIONS. The amount determined under this Section 7.6. is the maximum amount of the employee contributions that the Employee would have been permitted to make under this Plan in accordance with the limitations in IRe Section 415 and Section 10. during the period of qualified military service if the Employee had continued to be employed by the Employer during such period and received compensation as determined under Section 7.7. Proper adjustment shall be made to the amount determined under the preceding sentence for any employee contributions actually made during the period of such qualified military service. RESOLUTION NO. 98- 32 Page 4 . . . .,' 7.7. DEEMED COMPENSATION DURING QUALIFIED MILITARY SERVICE. For purposes ofIRC Section 415(c)(3) and Section to.1.c., an Employee who is in qualified military service shall be treated as receiving compensation from the Employer during the period of qualified military service equal to: a. The compensation the Employee would have received during that period if the Employee were not in qualified military service, determined based on the rate of pay the Employee would have received from the Employer but for absence during that period; or b. If the compensation the Employee would have received during that period was not reasonably certain, the Employee's average compensation from the Employer during the 12-month period immediately preceding the qualified military service (or, if shorter, the period of employment immediately preceding the qualified military service). Section 9. The Retirement Plan is amended by renumbering Sections 9.7. through 9.11. as in effect after the amendment in Section 8. of this Resolution as Sections 9.8. through 9.12. respectively and by adding the following new Section 9.7. immediately after Section 9.6.: 9.7 LUMP SUM FOR SMALL DISTRIBUTIONS. Despite Sections 9.4.,9.5., and 9.6. above, any portion of the benefit that the Participant or beneficiary elects to be distributed in the form of an annuity or installment option shall be distributed in a lump sum if that portion is less than the minimum required by the Insurance Company to purchase an annuity or installment contract. Section 10. Sections 9.11. and 9.12. of the Retirement Plan as in effect after the amendments in Sections 8. and 9. of this Resolution are amended to read as follows: 9.11. ALTERNATE PAYEE. Upon Severance of Employment of a Participant whose accounts were assigned to an alternate payee under a qualified domestic relations order, the Plan Administrator shall cause the vested benefit of the alternate payee to be distributed, as soon as administratively feasible, in the form of a lump sum distribution to the alternate payee. Despite the foregoing, such vested benefit shall be distributed: a. In the form of a lump sum distribution no later than the date required by Treasury regulations under IRe Section 401(a)(9); or b. Upon such earlier date, and in such other form, as is provided or allowed by the order and ORS 237.600. 9.12. DEATH OF ALTERNATE PAYEE. Upon the death of an alternate payee under a qualified domestic relations order, the Plan Administrator shall cause any undistributed portion of the vested benefit of the alternate payee to be distributed, as soon as administratively feasible, in the form of a lump sum distribution to the person or persons last selected by the alternate payee on a form of designation of beneficiary furnished by the Plan Administrator or, if no person has been so selected, to the surviving spouse of the alternate payee or, if no person has been so selected and there is no such surviving spouse, to the estate of the alternate payee. If the order specifies the alternate payee's beneficiary, the person or persons so specified shall be treated as the person or persons last selected by the alternate payee on a form of designation of beneficiary furnished by the Plan Administrator. Despite the foregoing, such undistributed portion shall be distributed in the form of a lump sum distribution no later than the date required by Treasury regulations under IRC Section 401(a)(9). ' RESOLUTION NO. 98}2 Page 5 . . . ': " Section 11. Sections lO.1.d.. and 10.1.e. of the Retirement Plan as in effect after the amendment in Section 8. of this Resolution are amended to read as follows: d. For limitation years beginning before January 1, 2000, in any case in which an individual is a participant in both the portion of this Plan that is a defined benefit plan for purposes of IRC Section 415 and any portion of this Plan that is a defined contribution plan for purposes of IRC Section 415, the sum of the defined benefit plan fraction (within the meaning of IRC Section 4I5(e)) for this Plan and the defined contribution plan fraction (within the meaning of IRC Section 4I5(e)) for this Plan for any year may not exceed 1.0. If such sum would otherwise exceed 1.0 for such individual, the projected annual benefit of such individual under this Plan shall be reduced to the extent necessary for such sum not to exceed 1.0. e. For limitation years beginning before January 1, 2000, in any case in which an individual is a participant in both this Plan and also another defined contribution plan or another defined benefit plan of the employer (within the meaning of IRC Sections 414(b), (c), (m), and (0) and 415(h)), all defined benefit plans of such employer shall be treated as one plan, and all defined contribution plans of such employer shall be treated as one plan, and the sum of the defined benefit plan fraction (within the meaning of IRC Section 415(e)) for such aggregate defined benefit plans and the defined contribution plan fraction (within the meaning of IRC Section 415(e)) for such aggregate defined contribution plans for any year may not exceed 1.0. If such sum would otherwise exceed 1.0 for such individual, the projected annual benefit of such individual under this Plan shall be reduced to the extent necessary for such sum not to exceed 1.0. Section 12. Section lO.l.g. of the Retirement Plan as in effect after the amendment in Section 8. of this Resolution is amended by adding the following new Sections lO.1.g.(3) and 1O.1.g.(4) immediately after Section 10.1.g.(2): (3) For purposes of adjusting any limitation under IRC Section 415(b)(2)(C) and any benefit under IRC Section 415(b)(2)(B), the interest rate shall be the greater of 5 percent and the interest rate used to determine the annuity purchase rate then made available to this Plan by the Insurance Company. (4) For purposes of adjusting any limitation under IRC Section 415(b)(2)(D), the interest rate shall be the lesser of 5 percent and the interest rate used to determine the annuity purchase rate then made available to this Plan by the Insurance Company. Section 13. Section 11.4. of the Retirement Plan as in effect after the amendment in Section 8. of this Resolution is amended to read as follows: 11.4. INTERPRETATION. The Plan Administrator shall have the power to construe and interpret this Plan and to determine all questions that shall arise under this Plan. The Plan Administrator shall apply this Plan to Participants described in Section 3.1.c. and their employers as the Plan Administrator determines is appropriate to implement the requirements of ORS 236.620(2). The decision of the Plan Administrator made in good faith shall be final and binding upon all parties including Participants and their beneficiaries. However the Plan Administrator shall, at all times, act in a uniform and nondiscriminatory manner, and shall from time to time set down uniform rules of interpretation and administration, which rules may be modified from time to time in light of existing circumstances and experience. RESOLUTION NO. 98-32 Page 6 . . . .; " Section 14. Section 11. of the Retirement Plan as in effect after the amendment in Section 8. of this Resolution is amended by adding the following new Section 11.8. immediately after Section 11.7.: 11.8 DOMESTIC RELATIONS ORDERS. Pursuant to authority granted in ORS 237.600 (regarding decrees, orders, or agreements entered or modified on or after January 1, 1994), the Plan Administrator prescribes that no benefit under this Plan may be paid to an alternate payee under the terms of a court decree or order or court-approved property settlement agreement ("Order") until after the date the Plan Administrator receives a copy of the Order and such additional information and documentation as satisfies the Plan Administrator: a. That the copy is a true copy of the Order. b. That the Order is, within the meaning of ORS 237.600, a court decree of annulment or dissolution of marriage or of separation, or a court order or court-approved property settlement agreement incident to such a decree. c. Of the extent to which the terms of the Order expressly provide for payment of a benefit under this Plan to an alternate payee. d. Of any other fact or matter required for the Plan Administrator to: (1) Determine the application of ORS 237.600 to the Order or the extent to which the Order applies to this Plan. (2) Comply with the Order or with ORS 237.600. (3) Administer this Plan under the terms of the Order. Section 15. Section 12.1. of the Retirement Plan as in effect after the amendment in Section 8. of this Resolution is amended to read as follows: 12.1. AMENDMENT. The Employer expects to continue this Plan indefinitely, but nevertheless reserves the right at any time or times to amend this Plan to any extent and in any manner that the Employer may deem advisable by: a. Resolution of the Common Council of the Employer making such amendment; or b. A document signed by the City Manager of the Employer making such amendment, but the City Manager may amend this Plan only to: (1) Change the designation of the Insurance Company in Section 2.7.; (2) Clarify this Plan; (3) Facilitate the administration of this Plan; or (4) Make changes adapting this Plan to the requirements of law, changes in law, or the terms of a collective bargaining agreement, all as determined in the discretion of the City Manager, provided that no amendment shall (a) have the effect of vesting in the Employer any interest in any property held subject to the Trust or the Plan or (b) cause or RESOLUTION NO. 98- 32 Page 7 . . . .: " permit any property held subject to the Trust or the Plan to be diverted to purposes other than the exclusive benefit of the present or future Participants and their beneficiaries. Section 16. The amendments in Sections 1. through 15. of this Resolution are effective as if included in the restatement of the Retirement Plan adopted by Resolution No. 98-08. However: a. Section 7. of the Retirement Plan as added by Section 8. of this Resolution is effective October 16, 1996. b. Sections 10.1. g. (3) and 10.1. g. (4) the Retirement Plan as added by Section 12. of this Resolution are effective July 1, 1997. Section 17. Section 11.1. of the Pension Plan is amended effective June 1, 1998, to read as follows: 11.1. AMENDMENT. The Employer expects to continue this Plan indefinitely, but nevertheless reserves the right at any time or times to amend this Plan to any extent and in any manner that the Employer may deem advisable by: a. Resolution of the Common Council of the Employer making such amendment; or b. A document signed by the City Manager of the Employer making such amendment, but the City Manager may amend this Plan only to: (1) Clarify this Plan; (2) Facilitate the administration of this Plan; or (3) Make changes adapting this Plan to the requirements of law, changes in law, or the terms of a collective bargaining agreement, all as determined in the discretion of the City Manager, provided that no amendment shall (a) have the effect of vesting in the Employer any interest in any property held subject to the Trust or the Plan or (b) cause or permit any property held subject to the Trust or the Plan to be diverted to purposes other than the exclusive benefit of the present or future Participants and their beneficiaries. RESOLUTION NO. 98-~ Page 8 . . . '. ..,. Section 18. The City Manager is directed to prepare and execute restatements of the Retirement Plan and the Pension Plan incorporating the amendments made in this Resolution and also incorporating the effective dates of the amendments. ADOPTED by the Common, Council and approved by the Mayor of the City of Springfield this .b:l- day of June, 1998. ADOPTED by a vote of '==' for and a against. ZJiRP~ Mayor H~ ATTEST: , ~ U::~~ \~ tt":t~,",,Q\'" \'\~,"\ <'I I",' ~ ~o-to'\ ~\.. n.A\.~' ~ Q \ "-(\\'- - '""''"' o,,~t\..( O~"~c.(!. 0+ C.~I ,.", 1'" ,,,..( '2"6 \ ~ ,t RESOLUTION NO. 98- 32 Page 9