HomeMy WebLinkAboutResolution 97-18 05/05/1997
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SPRINGFIELD
NO. 97 - ..11L
A RESOLUTION OF THE CITY OF SPRINGFIELD AMENDING THE CITY OF
SPRINGFIELD, OREGON RETIREMENT PLAN
WHEREAS, by Resolution No 95-42 the City of Springfield adopted the Restated City of
Springfield, Oregon Retirement Plan (the "Retirement Plan"); and
WHEREAS, by Resolution No. 96-35 the City of Springfield adopted certain amendments
to the Retirement Plan; and
WHEREAS, the City is required by ORS 237.635 and ORS 237.637 to provide certain
benefit increases for emergency service employees participating in a non-PERS retirement plan;
and
WHEREAS, Section 18 of the Retirement Plan provides for allocation of certain plan
reserve funds to employee accounts as additional past service credit;
WHEREAS, the City desires to implement ORS 237.635 and 237.637 and desires to
clarify the computation of the amount of the reserve to be allocated;
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Springfield as
follows:
Section 1. The following amendments are made to the Retirement Plan effective April 7,
1997.
a. Section 1.2 of the Retirement Plan is amended to read as follows:
1.2 The The effective date of this Restated Plan is December 1,1994. However:
a. The changes made in Sections 2.5, 2.15, 4.2, and 4.4, and the deletion of Section 4.8 and
Exhibit C of the restated City of Springfield, Oregon Retirement Plan adopted May 15, 1995, are effective for
compensation earned after May 31, 1996. Such changes and deletions were made in the restatement of the City
of Springfield, Oregon Retirement Plan adopted September 3, 1996.
b. Section 19 and the changes to Sections 3.5, 11.4 d., and 11.5 made in this Restated Plan are
adopted effective May 5, 1997.
b. Section 3-.5 of the Retirement Plan is amended to read as follows:
3.5 Upon Severance of Employment the Participant shall cease to be eligible to receive an allocation of
contribution hereunder and the rights of such Participant or the Participant's beneficiary shall be limited to
receive payment from the Participant's Accrned Benefit as hereinafter set forth and any benefit provided under
Section 19.
RESOLUTION 97-18
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c. Section 8.4 of the Retirement Plan is amended to read as follows:
8.4 If a Participant incurs a Severance of Employment, the nonvested portion of the Participant's Employer
Contribution ACcount shall be forfeited and transferred to the reserve fund described in Section 7.4 to the extent
provided in Section 4.4 as of the end of the Plan Year in which such Severance of Employment occurs.
However, such forfeiture and transfer shall occur on the Transfer Date provided in Section 18 if the Participant
incurs a Severance of Employment in the Plan Year in which the Transfer Date occurs and on or before the
Transfer Date.
d. Section 11.4 of the Retirement Plan is amended to read as follows:
11. 4 Upon ~e first to occur of:
(i) Severance of Employment (unless the Participant or beneficiary has elected pursuant to
Section 11.2 or Section 11.3 to defer distribution),
(ii) The end of the deferral elected pursuantto Section 11.2 or Section 11.3, or
(ill) The death of a Participant after Severance of Employment (unless the beneficiary has elected
pursuant to Section 11.3 to defer distribution), the Plan Administrator shall cause the Participant's vested
Accrued Benefit (not including any Accrued Benefit pursuant to Section 4.6) to be distributed to the Participant
or the Participant's beneficiary, as the case may be, in such one (1) of the following methods of distribution as the
Participant or the Participant's beneficiary, as the case may be, elects in writing to receive:
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a.
A lump sum distribution.
b. The Normal Benefit Form, which is equal monthly payments beginning on the first of the
month coincident with or next following the date a valid election is made by the Participant or the Participant's
beneficiary to receive the Normal Benefit Form and terminating with the later of (1) the last monthly payment
prior to the Participant's death (or the beneficiary's death, where the Normal Benefit Form is elected by the
beneficiary), or (2) the one hundred twentieth (120th) such payment. If the Participant (or beneficiary, where the
Normal Benefit Form is elected by the beneficiary) dies prior to receipt of all such payments, any remaining
payments shall be made to the Participant's beneficiary (or the beneficiary's beneficiary, where the Normal
Benefit Form is elected by the beneficiary).
c. Any other form of annuity or installment option then available under the Policy; provided,
however, that any such form of benefit shall be determined and made in accordance with regulations issued
under IRe Section 40l(a)(9), including the minimum distribution incidental benefit requirements of Treasury
Regulation Section 1.40l(a)(9)-2.
d. The amount of the monthly payments to be provided by any annuity purchase or installment
option pursuant to this Section 11.4 shall be determined based on applying the sum of the Participant's vested
Accrued Benefit (not including any Accrued Benefit pursuant to Section 4.6) and any benefit provided under
Section 19 as the premium at the annuity purchase rate then in effect under the Policy.
e. Section 11.5 of the Retirement Plan is amended to read as follows:
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11.5 Upon the earlier of (1) the date the Participant attains age sixty-five (65) or (2) the date of the
Participant's death, the Plan Administrator shall cause the Participant's Accrued Benefit pursuant to Section 4.6
to be distnbuted to the Participant or the Participant's beneficiary, as the case may be, in such one (1) of the
RESOLUTION 97-18
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methods of distribution described in Section 11.4 a., b. or c. as the Participant or the Participant's beneficiary, as
the case may be, elects in writing to receive. The amount of the monthly payments to be provided by any annuity
purchase or installment option pursuant to this Section 11.5 shall be determined based on applying the sum of
the Participant's Accrued Benefit pursuant to Section 4.6 and any benefit provided under Section 19 as the
premium at the 'annuity purchase rate then in effect under the Policy.
f. Section 11.13 of the Retirement Plan is amended to read as follows:
11.13 The provision in Section 11.2 allowing certain Participants to elect to defer distribution does not apply
to any Participant:
a. Whose Severance of Employment occurs or occurred on or before the Transfer Date as
determined under Section 18.1;
b. Whose Severance of Employment is not or was not because of Disability and does not or did
not occur on or after attainment of Early Retirement Age or Normal Retirement Age; and
c. Who upon Severance of Employment would not be in the Remaining Group as defined in
Section 18.2 if the Remaining Group were determined by substituting the date of the Participant's Severance of
Employment for "June 30, 1995" where it appears in the definition of the Remaining Group in Section 18.2.
g. Section 13.5 of the Retirement Plan is amended to read as follows:
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13.5 In the event of a termination or partial termination of the Plan, all affected Participants shall
have a fully vested and nonforfeitable interest in their Accrued Benefit and benefits provided under Section 19.
h. Section 18 of the Retirement Plan is amended to read as follows:
18.1 The Transfer Date is a convenient date selected by the Plan Administrator that is as soon as
administratively feasible after receipt of the Internal Revenue Service's approval of this Section 18, but no earlier
than June 30, 1995. The following shall occur as of the Transfer Date:
a. The amount of the reseLVe fund specified in Section 7.4 as of June 30, 1995 shall be divided
between the Transfer Group and the Remaining Group in proportion to the aggregate Accrued Benefit of each
such group as of June 30, 1995. Terms used in this Section 18.1 a. are defined in Section 18.2.
b.
shall be:
The portion of the reserve fund divided as provided in Section 18.1 a. for the Transfer Group
(1) Increased by the following amounts:
(a) Any forfeitures under Section 8.4 of the Accrued Benefit of members of the
Transfer Group that occur after June 30, 1995 and on or before the Transfer Date (determining such membership
as provided in Section 18.2 but by substituting "the date of the Employee's Severance of Employment" for "June
30, 1995").
(b) Any amount released from the Prior Service Liability Reserve after June
30, 1995 and OR or before the Transfer Date with respect to members of the Transfer Group.
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(2) Reduced by the following amounts:
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(a) The Transfer Group's share of expenses of administering this Plan accrued
through the Transfer Date and not accounted for in determining the amount of the reserve fund as of June 30,
1995. The amount of such expenses shall be determined in the discretion of the Plan Administrator and shall be
shared between the Transfer Group and the Remaining Group in proportion to the aggregate Accrued Benefit of
each such group as of June 30, 1995.
(b) Any amounts credited under Section 4.6 for the period July 1, 1995
through the Transfer Date to the Employer Contribution Account of any member of the Transfer Group,
determining such membership as provided in Section 18.2 but by substituting "the date of the Employee's
Severance of Employment" for "June 30, 1995".
(c) The amount required to credit to the accounts of members of the Transfer
Group the applicable minimum credited rates of return specified in Section 7.3 for the period July 1, 1995
through the Transfer Date, after first funding such crediting with such group's share of earnings under the Policy
for the period July 1, 1995 through the Transfer Date. The amount required to so credit such accounts and such
group's share of earnings under the Policy shall be determined in the discretion of the Plan Administrator and by
determining th~ membership of such group on any day during the period July 1, 1995 through the Transfer Date
as provided in Section 18.2 but by substituting such day for "June 30, 1995".
(d) Any excess of:
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(i) The sum of the benefits as of June 30, 1995 provided under
Section 19 with respect to all Accrued Benefits as of June 30, 1995 to which Section 19 applies (determining
such sum (A) as if all such Accrued Benefits were distributed on June 30, 1995; (B) by applying Section 19 as if
it were in effect since January 1, 1991; (C) as if the amount of increase under Section 19.3 were the amount
determined under Section 19.3 a; and (0) by not including the benefits provided under Section 19 that reduce
the amount of the reserve fund as of June 30, 1995 pursuant to the second sentence of Section 18.2) plus interest
on such sum at the rate of 9% per annum (compounded annually) from June 30, 1995 to the Transfer Date; over
(ii) The portion of the reserve fund divided as provided in Section
18.1 a. for the Remaining Group, after that portion has first been:
(A) Increased by the following amounts:
(I) Any forfeitures under Section 8.4 of the
Accrued Benefit of members of the Remaining Group that occur after June 30, 1995 and on or before the
Transfer Date (determining such membership as provided in Section 18.2 but by substituting "the date of the
Employee's Severance of Employment" for "June 30, 1995").
(ll) Any amount released from the Prior Service
Liability Reserve after June 30, 1995 and on or before the Transfer Date with respect to members of the
Remaining Group.
(B) Reduced by the following amounts:
(I) The Remaining Group's share of expenses of
administering this Plan accrued through the Transfer Date and not accounted for in determining the amount of
the reserve fund as of June 30, 1995.
(ll) Any amounts credited under Section 4.6 for
the period July 1, 1995 through the Transfer Date to the Employer Contribution Account of any member of the
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Remaining Group, determining such membership as provided in Section 18.2 but by substituting "the date of the
Employee's Severance of Employment" for "June 30, 1995".
(III) The amount required to credit to the accounts
of members of the Remaining Group the applicable minimum credited rates of return specified in Section 7.3 for
the period July 1, 1995 through the Transfer Date, after first funding such crediting with such group's share of
earnings under the Policy for the period July 1, 1995 through the Transfer Date. The amount required to so
credit such accOunts and such group's share of earnings under the Policy shall be detennined in the discretion of
the Plan Administrator and by determining the membership of such group on any day during the period July 1,
1995 through the Transfer Date as provided in Section 18.2 but by substituting such day for "June 30, 1995".
c. The portion of the reserve fund divided for the Transfer Group as provided in Section 18.1 a.,
but as increased and reduced under Section 18.1 b., shall be further divided among the members of such group
(determining such group as of the Transfer Date inunediately after any forreitures occurring under Section 8.4 on
the Transfer Date) who are Employees of the Employer on June 30, 1995 in proportion to each such member's
months of participation in the Plan as of June 30, 1995. The portion of the reserve fund so divided for each such
member shall be allocated to such member's Pick-up Account as additional past setVice credit. For this purpose
a month of participation shall be credited to a member for each month for which a contribution is made on
behalf of the member pursuant to Section 4.2 a.
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d. The accounts of members of the Transfer Group shall be credited with the applicable
minimum credited rates of return specified in Section 7.3 through the Transfer Date; and the amount of each
such account shall then be transferred to the City of Springfield, Oregon Money Purchase Pension Plan and be
maintained in accounts thereunder as provided in Section 12.3 of such Plan. For this purpose the Transfer
Group shall be detennined as provided in Section 18.2 but by substituting "the Transfer Date" for "June 30,
1995". Upon such transfer such members and their beneficiaries shall have no further rights under this Plan.
18.2 "The amount of the reserve fund specified in Section 7.4 as of June 30, 1995" shall be the estimate
thereof detennined in the discretion of the Plan Administrator and as if the applicable minimum credited rates of
return specified' in Section 7.3 were credited to accounts through June 30, 1995. For this purpose, the amount of
the such reserve fund as of June 30, 1995 shall be detennined after reducing such reserve fund by the amount of
all benefits provided under Section 19 with respect to all amounts distributed under this Plan on or before June
30, 1995 (applying Section 19 as if it were in effect since January 1, 1991 and as if the amount of increase under
Section 19.3 were the amount detennined under Section 19.3 a.).
"The Remaining Group" comprises all persons in any of the following groups as of June 30, 1995:
a. Public Safety Employees.
b. Employees in the collective bargaining unit represented by Springfield Police Association.
c. City Attorney and Assistant City Attorneys.
d. Former Employees who inunediately before Severance of Employment were in any of the
preceding groups.
e. Beneficiaries of deceased Participants who inunediately before death were in any of the
preceding groups.
f Alternate payees under qualified domestic relations orders with respect to Participants who on
the date of such order were in any of the preceding groups.
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g. Employees and former Employees not in any of the preceding groups whose date of Disability
is before July 1, 1995.
"The Transfer Group" comprises each person with an account in the Plan as of June 30, 1995 who is not in the
Remaining Group.
"The aggregate Accrued Benefit of each such group as of June 30, 1995" shall be determined in the discretion of
the Plan Administrator and as if the applicable minimum credited rates of return specified in Section 7.3 were
credited to accounts through June 30, 1995, and for each such group shall be the sum of the Accrued Benefit as
of June 30, 1995 of each member of such group plus, for the Remaining Group, the sum determined under
Section 18.1 b.(2)( d)(i)) (not including the interest determined under such section).
h. Section 19 is added to the Retirement Plan to read as follows:
SECTION 19
ADDffiONAL BENEFIT TO MATCH PERS BENEFIT INCREASES
19.1 This Section 19 implements the requirement that the Employer provide increases in benefits for certain
Public Safety Employees that are equal to or the actuarial equivalent of certain increases in benefits under
Oregon Public Employes' Retirement System granted in 1991 and 1995 to certain police officers and firefighters.
That requirement and those increases are provided in ORS 237.635 and 237.637 and in 1991 Oregon Laws
chapter 796 and 1995 Oregon Laws chapter 569.
19.2 This Section 19 applies to, and only to, the Eligible Payments of the Eligible Portion of the Accrued
Benefit of an Eligible Employee.
a. Eligible Payments are all payments made after December 31, 1990 other than:
(1) Payments that would have been made before January 1, 1991 but for the Employee's
or beneficiary's election to defer distribution, as determined in the discretion of the Plan Administrator.
(2) Payments with respect to an Eligible Employee whose last Severance of
Employment occurred before January 1, 1991, other than periodic payments made under an annuity contract
purchased under the Policy. Whether a payment is periodic shall be determined in the discretion of the Plan
Administrator.
b. The Eligible Portion is the part of the Accrued Benefit attributable to allocations made under
Section 4.2 or credits made under 4.6 with respect employment as a Public Safety Employee, including earnings
allocated under Section 7.3 with respect to such part. However:
. (1) With respect to Accrued Benefit the distribution of which is deferred at the
Employee's election, the Eligible Portion excludes earnings allocated for periods after the calendar month in
which occurred or occurs the latter of the Employee's Severance of Employment and the Employee's Early
Retirement Age (including periods after the Employee is rehired except, if the Employee again becomes a Public
Safety Employee before the Employee's Early Retirement Date, periods after the Employee again becomes a
Public Safety Employee).
(2) With respect to Accrued Benefit the distribution of which is deferred at the
beneficiary's election, the Eligible Portion excludes earnings allocated for periods after the calendar month in
which occurred or occurs the Employee's death.
RESOLUTION 97-18
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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.
19.3 Upon distributio~ of an Eligible Employee's Accrued Benefit in a calendar year in which distnbutions
under this Plan are not exempt from Oregon personal income taxation, 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
Emolovrnent are
The oercentage is
Less than 120
At least 120 but not 240
At least 240 but not 300
300 or more
o percent
1 percent
2-112 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:
( -L _ 1) (the Emplovee's months of participation before October 1. 1991
;91 the Employee's months of panicipation
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For purposes of this Section 19.3, the Employee shall be credited with a month of participation for each calendar
month for which a contnbution is made on behalf of the Employee as a Public Safety Employee pursuant to
Section 4.2 a Months of participation shall not be credited by reason of credits made under Section 4.6.
19.4 The decimal .91 in the formula in Section 19.3 b. shall automatically be adjusted as provided in this
Section 19.4 to reflect changes in the maximum Oregon personal income tax rate imposed upon individuals who
are full-year residents of Oregon. An increase in such rate by x percentage points shall cause such decimal to be
reduced by x lOOths, and a reduction in such rate by x percentage points shall cause such decimal to be increased
by x lOOtbs. For example, following are the decimals that correspond to particular rates:
If the rate is
The decimal is
7 percent
8 percent
9 percent
10 percent
11 percent
.93
.92
.91
.90
.89
Any such change in the decimal shall be effective only for distnbutions made on or after the effective date of the
change in such rate. No amount distributed to a Participant or beneficiary before the change is implemented
may be recovered from any person or offset against any undistributed benefit of any person to account for any
such change.
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19.5 The benefits provided in this Section 19 shall be funded first from the reserve fund specified in Section
7.4 and, if such reserve fund is inadequate, from contributions by the Employer made by the time the benefits are
to be distributed.
19.6 The Plan Administrator shall as soon as administratively feasible cause to be distributed to Eligible
Employees (and where applicable their beneficiaries and alternate payees under qualified domestic relations
orders) any benefits provided under this Section 19 attributable to distributions made before April 7, 1997. The
Plan Administrator shall not add any interest or earnings credit to such benefits for periods after December 31,
1990.
19.7 The benefits provided under this Section 19 shall not apply with respect to any portion of an Eligible
Employee's Accrued Benefit transferred to the Oregon Public Employes' Retirement System.
19.8 The benefits provided under this Section 19 may be reduced, eliminated, or changed by amendment of
this Plan, with respect to service performed before or after the amendment
a. To the extent a court of competent jurisdiction determines that the Employer is not required to
implement one or more of the provisions of ORS 237.635 and 237.637, 1991 Oregon Laws chapter 796, and
1995 Oregon Laws chapter 569 that by their terms apply to the Employer.
b. To the extent a court of competent jurisdiction or the Employer determines that any of the
benefits, or the aggregate benefits, provided under this Section 19 are more than is required to implement the
provisions of ORS 237.635 and 237.637, 1991 Oregon Laws chapter 796, and 1995 Oregon Laws chapter 569.
c. As the Employer determines appropriate to respond to any law modifying any requirement of
ORS 237.635 and 237.637, 1991 Oregon Laws chapter 796, and 1995 Oregon Laws chapter 569.
The Employer also may by amendment of this Plan change the manner in which the Employer implements the
requirement described in Section 19.1 with respect to service performed before or after the amendment, even
though such change may reduce or eliminate the benefits provided under this Section 19 for all or some
Employees.
Any such benefits that are reduced, eliminated, or changed after they have been distributed may not be recovered
from any person or offset against any undistributed benefit of any person to account for any such reduction,
elimination, or change.
Section 2. The City Manager is directed to prepare and execute a restatement of the
Retirement Plan incorporating the amendments to the Retirement Plan made in this
Resolution and also incorporating the effective dates of those amendments.
Adopted by the Common Council and approved by the Mayor of the City of Springfield
this 5th day of May, 1997.
Adopted by a vote of 5 for and 0 against.
ATTEST:
?oaP~
~I __ n 'Mayor
~6~
Cit Recorder
RESOLUTION 97-18
PAGE 8
:&;;1 APPROVED
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DATE:~ 'Cr7
OFFICE OF CITY ATTORNEY