HomeMy WebLinkAbout55C - RESOLUTION AND AGREEMENT PUBLIC AGENCY RETIREMENT SVCSREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
DECEMBER 19, 2011
TITLE:
RESOLUTION AND AGREEMENT
WITH PUBLIC AGENCY RETIREMENT
SERVICES FOR SOCIAL SECURITY
ALTERNATIVE PROGRAM SERVICES
CITY MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
? As Recommended
? As Amended
? Ordinance on 1ST Reading
? Ordinance on 2"d Reading
? Implementing Resolution
? Set Public Hearing For
CONTINUED TO
FILE NUMBER
1) Adopt a resolution designating Public Agency Retirement Services to provide
administrative and recordkeeping services and Union bank to provide trustee services for
the City's part-time employee retirement plan.
2) Authorize the City Manager and Clerk of the Council to execute the attached agreement
with Public Agency Retirement Services and Union Bank for a period of five years with
provisions for two one-year extensions.
DISCUSSION
The City of Santa Ana is required to provide a retirement plan similar to Social Security for its
temporary and seasonal employees. Government agencies are allowed to participate in a
program designated as a Social Security Alternative Plan (3121 Plan). The 3121 Plan is a
compulsory deferral program that replaces City and participant contributions to Social Security
under federal Omnibus Budget Reconciliation Act 90, Section 11332. The establishment of the
3121 Plan is pursuant to regulations of the Internal Revenue Code §3121. Currently, the Plan
has approximately $3.13million in participant assets, with 2,828 participants and is administered
through the Finance & Management Services Agency.
In February 2010, the City of Santa Ana issued a Request for Proposal (RFP) for administrative,
recordkeeping, communication, and investment management services of the City's 3121 Social
Security Alternative Plan. The City received five vendor proposals. After careful deliberation of
the service model, recordkeeping, administration, management, vendor service team, plan
expenses and fees, and overall proposal responsiveness, the Plan Administrator Committee
recommends Public Agency Retirement Services (PARS) as the new 3121 Social Security Plan
provider.
Unfortunately, during the period of service and contract development the representative for PARS
fell ill and eventually passed. Recently, the City and PARS re-established discussions and City
staff is prepared to move the program forward. The new PARS proposal is intended to enhance
the current services provided to part-time employees as well as the City.
55C-1
Resolution and Agreement with Public Agency
Retirement Services and Union Bank for 3121 Plan
December 19, 2011
Page 2
PARS is one of the largest and longest serving providers of 3121 Plans in the nation servicing
110 California cities with 12 clients in Orange County. PARS, will offer a new 3121-specific
Communications Plan that includes on-site group education forums and materials supported by
locally based staff.
In addition, PARS provides the City the flexibility to select from 3121-designed investment funds
for choosing a meaningful participant investment fund option, rather than being limited to solely
long-term Certificates of Deposit. As well, PARS will significantly improve fund transparency of
accountholder investment performance, liquidity and safety with clearly identified expense fees,
and implementation of Qualified Domestic Relations Order processing. Moreover, greater
service and accountability to City's Plan Administrator Committee including the addition of new
and expanded quarterly/annual staff reporting, establishment of secure records through a digital
archiving program for participant authorization and beneficiary forms, and establishment of new
escheatment process for meeting State of California requirements.
Upon Council authorization, a comprehensive transition plan will take place for the 3121 Plan
over the next 120 days. The conversions will consist of comprehensive communications, multi-
site meetings, and individual participant and retiree appointments to insure employees are
informed and updated on all the new plan improvements and enhancements.
FISCAL IMPACT
There is no fiscal impact associated with this action.
Francisco Gutierrez
Executive Director
Finance & Management Services Agency
FG/ed/tmr
Exhibit: 1. Resolution
2. Agreement
3. Trust Document
4. Alternative Retirement Plan
55C-2
Jxs (11/28/11)
RESOLUTION NO. 2011-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA AUTHORIZING THE AMENDMENT AND
RESTATEMENT OF ITS EXISTING CITY OF SANTA ANA
3121 PART-TIME SOCIAL SECURITY RETIREMENT
PLAN; TERMINATING THE CITY'S RELATIONSHIP WITH
GREAT WEST RETIREMENT SERVICES FOR
ADMINISTRATIVE AND INVESTMENT SERVICES; AND
APPOINTING PARS AS TRUST ADMINISTRATOR OF THE
PLAN AND UNION BANK AS TRUSTEE OF THE PLAN
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana finds determines and
declares as follows:
A. WHEREAS it was determined to be in the City's best interest and its
employees to adopt the City of Santa Ana 3121 Part-Time Social Security
Retirement Plan ("the 3121 Plan"), an Alternative to Social Security Plan,
administered by Great West Retirement Services, for its employees not
eligible for membership in the California Public Employees' Retirement
System ("CalPERS").
B. WHEREAS the City desires to terminate its relationship with Great West
Retirement Services for administrative and investment services related to
the 3121 Plan effective December 19, 2011, or as soon as administratively
feasible.
C. WHEREAS Public Agency Retirement Services ("PARS") has made a
Part-Time Social Security Alternative Retirement Plan available to the City
and its employees and qualifies under California Government Code
Sections 53215-53224 and 20000, OBRA 90 Section 11332, IRC Sections
3121(b)(7)(F) and 457 and meets the meaning of the term "retirement
system" as given by Section 218(b)(4) of the Federal Social Security Act.
D. WHEREAS the City desires to amend and restate its current 3121 Plan
and desires to appoint PARS as Trust Administrator and Recordkeeper
and Union Bank as Trustee for the amended and restated City of Santa
Ana 3121 Part-Time Social Security Alternative Retirement Plan effective
December 19, 2011.
Exhibit 1
Resolution No. 2011-XXX
Page 1 of 3
55C-3
Section 2. NOW THEREFORE, BE IT RESOLVED THAT:
A. The City Council of the City of Santa Ana, pursuant to the City's authority
to amend the existing plan, does hereby adopt the City of Santa Ana 3121
Part-Time Social Security Alternative Retirement Plan (the "Plan") and
Trust as the City's alternate to Social Security plan, replacing the existing
3121 Plan in full, effective December 19, 2011;
B. The City Council hereby appoints PARS as Trust Administrator and
Recordkeeper and Union Bank as Trustee for the Plan effective December
19, 2011;
C. The City Council hereby terminates Great West Retirement Services as
Trust Administrator and Recordkeeper effective December 19, 2011;
D. The City Council hereby authorizes the liquidation and transfer of plan
assets to Union Bank as soon as administratively feasible pursuant to the
terms and conditions of the Great West Retirement Services Guaranteed
Certificate Fund/Daily Interest Guaranteed Fund II;
E. The City Council hereby appoints the Executive Director of Finance and
Management Services, or his/her successor or his/her designee as the
City's Plan Administrator for the Plan;
F. The City's Plan Administrator is hereby authorized to implement the Plan,
execute the PARS legal documents on behalf of the City and to take
whatever additional actions are necessary to maintain the City's
participation in PARS and to maintain compliance of any relevant
regulation issued or as may be issued; therefore, authorizing him/her to
take whatever additional actions are required to administer the City's
PARS Plan.
Section 3. This Resolution shall take effect immediately upon its adoption by
the City Council, and the Clerk of the Council shall attest to and certify the vote adopting
this Resolution.
ADOPTED this day of
2011.
Miguel A. Pulido
Mayor
Resolution No. 2011-XXX
Page 2 of 3
55C-4
As (11/28/11)
APPROVED AS TO FORM:
Joseph Straka, Interim City Attorney
By:
Jose Sandoval
Chief Assistant City Attorney
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, Maria D. Huizar, Clerk of the Council, do hereby attest to and certify that the attached
Resolution No. 2011-XXX to be the original resolution adopted by the City Council of the
City of Santa Ana on
Date:
Clerk of the Council
City of Santa Ana
Resolution No. 2011-XXX
Page 3 of 3
55C-5
55C-6
AGREEMENT FOR ADMINISTRATIVE SERVICES
This Agreement for Administrative Services ("Agreement") is made this 19'h day of
December, 2011, between Phase II Systems, a corporation organized and existing under the
laws of the State of California, doing business as Public Agency Retirement Services
(hereinafter "PARS") and the City of Santa Ana ("Agency").
WHEREAS, Agency has adopted the City of Santa Ana 3121 Part-Time Social Security
Alternative Retirement Plan (the "Plan") effective December 19, 2011, in conjunction with
the PARS Trust Document ("PARS Trust"), and desires to retain PARS, as Trust
Administrator to the PARS Trust, to provide administrative services;
WHEREAS, by written resolution and pursuant to Sections 1.1 and 2.1 of the PARS Trust,
the Agency's governing body has appointed by position or title a Plan Administrator to act
on its behalf in all matters relating to the Plan and PARS Trust ("Plan Administrator");
WHEREAS, pursuant to Section 3.3 of the PARS Trust, the Agency has the power to
delegate certain duties related to the Plan, and PARS accepts those duties pursuant to the
terms contained in the Agreement, and that this Agreement represents the entire delegation of
duties to PARS from the Agency with regards to the Plan;
WHEREAS, PARS accepts the terms of this Agreement with the understanding by the
Agency and Plan Administrator that PARS does not hold custody of any assets of the Plan,
and does not have any independent authority or discretion for the investment, distribution or
escheatment of Plan assets without the express consent of, and direction from the Plan
Administrator.
NOW THEREFORE, THE PARTIES AGREE:
1. Services. PARS will provide the services pertaining to the Plan as described in the
exhibit attached hereto as "Exhibit IA" ("Services") in a timely manner, subject to
the further provisions of this Agreement.
2. Fees for Services. PARS will be compensated for performance of the Services as
described in the exhibit attached hereto as "Exhibit 1 B".
Payment Terms. Payment for the Services will be remitted directly from Plan assets
unless the Agency chooses to make payment directly to PARS. In the event that the
Agency chooses to make payment directly to PARS, it shall be the responsibility of
the Agency to remit payment directly to PARS based upon an invoice prepared by
PARS and delivered to the Agency. If payment is not received by PARS within thirty
(30) days of the invoice delivery date, the balance due shall bear interest at the rate of
1.5% per month. If payment is not received from the Agency within sixty (60) days
of the invoice delivery date, payment plus accrued interest will be remitted directly
from Plan assets, unless PARS has previously received written communication
disputing the subject invoice that is signed by a duly authorized representative of the
Agency.
Exhibit 2
Page 1
55C-7
4. Fees for Services Beyond Scope. Fees for services beyond those specified in this
Agreement will be billed to the Agency at the rates indicated in the PARS standard
fee schedule in effect at the time the services are provided and shall be payable as
described in Section 3 of this Agreement. Before any such services are performed,
PARS will obtain prior Agency authorization and provide the Agency with written
notice of the subject services, terms, and an estimate of the fees therefore.
Information Furnished to PARS. PARS will provide the Services contingent upon
the Agency providing PARS the information specified in the exhibit attached hereto
as "Exhibit IC" ("Data"). It shall be the responsibility of the Agency to certify the
accuracy, content and completeness of the Data so that PARS may rely on such
information without further audit. It shall further be the responsibility of the Agency
to deliver the Data to PARS in such a manner that allows for a reasonable amount of
time for the Services to be performed. Unless specified in Exhibit IA, PARS shall be
under no duty to question Data received from the Agency, to compute contributions
made to the Plan, to determine or inquire whether contributions are adequate to meet
and discharge liabilities under the Plan, or to determine or inquire whether
contributions made to the Plan are in compliance with the Plan or applicable law. In
addition, PARS shall not be liable for non performance of Services if such non
performance is caused by or results from erroneous and/or late delivery of Data from
the Agency. In the event that the Agency fails to provide Data in a complete,
accurate and timely manner and pursuant to the specifications in Exhibit IC, and this
goes uncured for sixty (60) days after having received written notice of such
deficiency, PARS reserves the right, notwithstanding the further provisions of this
Agreement, to terminate this Agreement upon no less than thirty (30) days written
notice to the Agency.
6. Suspension of Contributions. In the event contributions are suspended, either
temporarily or permanently, prior to the complete discharge of PARS' obligations
under this Agreement, PARS reserves the right to bill the Agency for Services under
this Agreement at the rates indicated in PARS' standard fee schedule in effect at the
time the services are provided, subject to the terms established in Section 3 of this
Agreement. Before any such services are performed, PARS will provide the Agency
with written notice of the subject services, terms, and an estimate of the fees
therefore.
7. Plan Distributions. The Plan Administrator is responsible for notifying PARS of
any Participant's eligibility for a distribution, and PARS accepts the Plan
Administrator's contractual delegation of distribution processing and certain
escheatment responsibilities. PARS is entitled to rely on, and is under no duty
whatsoever to audit the efficacy of the Agency's procedures for identifying an
employee's change-in-status or eligibility for a distribution.
Non-Contribution Reports. PARS prepares and submits a periodic Non-
Contribution report to the Plan Administrator which includes all Participants who
have received no new contributions for a period of time, as specified by the Plan
Administrator. PARS is not obligated by law or otherwise to provide a Non-
Contribution report and this report in no way obligates PARS to generate distributions
Page 2
55C-8
without specific instruction from the Agency's Plan Administrator as outlined in
Section 7.
9. Escheatment of Unclaimed Accounts. PARS will administer the escheatment of
Participant accounts which are deemed unclaimed pursuant to applicable state and
federal laws, under the conditions further described in the provision.; of this
Agreement. It is acknowledged by the Agency and Plan Administrator that any
escheatment duties that PARS has arise only as a result of contractual, not statutory,
obligations that PARS accepts as a delegatee of the Plan Administrator, as contained
in this Agreement. For the purposes of determining the timing of distributability
under any unclaimed property law, a Participant account becomes "payable or
distributable" as of the date on which the Plan Administrator notifies PARS, in an
acceptable form of notification, of a change-in-status together with the proper
authorization to commence the distribution process.
10. Records. Throughout the duration of this Agreement, and for a period of five (5)
years after termination of this Agreement, PARS shall provide duly authorized
representatives of Agency access to all records and material relating to calculation of
PARS' fees under this Agreement. Such access shall include the right to inspect,
audit and reproduce such records and material and to verify reports furnished in
compliance with the provisions of this Agreement. All information so obtained shall
be accorded confidential treatment as provided under applicable law.
11. Confidentiality. Without the Agency's consent, PARS shall not disclose any
information relating to the Plan except to duly authorized officials of the Agency,
subject to applicable law, and to parties retained by PARS to perform specific
services within this Agreement. The Agency shall not disclose any information
relating to the Plan to individuals not employed by the Agency without the prior
written consent of PARS, except as such disclosures may be required by applicable
law.
12. Independent Contractor. PARS is and at all times hereunder shall be an
independent contractor. As such, neither the Agency nor any of its officers,
employees or agents shall have the power to control the conduct of PARS, its officers,
employees or agents, except as specifically set forth and provided for herein. PARS
shall pay all wages, salaries and other amounts due its employees in connection with
this Agreement and shall be responsible for all reports and obligations respecting
them, such as social security, income tax withholding, unemployment compensation,
workers' compensation and similar matters.
13. Indemnification. PARS and Agency hereby indemnify each other and hold the other
harmless, including their respective officers, directors, employees, agents and
attorneys, from any claim, loss, demand, liability, or expense, including reasonable
attorneys' fees and costs, incurred by the other as a consequence of PARS' or
Agency's, as the case may be, acts, errors or omissions with respect to the
performance of their respective duties hereunder. However nothing contained herein
shall result in any liability express or implied on behalf of PARS for any plan
inadequacies, negligent plan administration or any claim and/or loss arisi:lg out of
Page 3
55C-9
such plan inadequacies and/or negligent plan administration by any plan and/or trust
administrator prior to the retention of PARS as the Trust Administrator pursuant to
the terms and conditions of this Agreement.
14. Compliance with Applicable Law. The Agency shall observe and comply with
federal, state and local laws in effect when this Agreement is executed, or which may
come into effect during the term of this Agreement, regarding the administration of
the Plan. PARS shall observe and comply with federal, state and local laws in effect
when this Agreement is executed, or which may come into effect during the term of
this Agreement, regarding Plan administrative services provided under this
Agreement.
15. Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California. In the event any party institutes legal
proceedings to enforce or interpret this Agreement, venue and jurisdiction shall be in
any state court of competent jurisdiction.
16. Force Majeure. When a party's nonperformance hereunder was beyond the control
and not due to the fault of the party not performing, a party shall be excused from
performing its obligations under this Agreement during the time and to the extent that
it is prevented from performing by such cause, including but not limited to: any
incidence of fire, flood, acts of God, acts of terrorism or war, commandeering of
material, products, plants or facilities by the federal, state or local government, or a
material act or omission by the other party.
17. Ownership of Reports and Documents. The originals of all letters, documents,
reports, and data produced for the purposes of this Agreement shall be delivered to,
and become the property of the Agency. Copies may be made for PARS but shall not
be furnished to others without written authorization from Agency.
18. Designees. The Plan Administrator of the Agency, or their designee, shall have the
authority to act for and exercise any of the rights of the Agency as set forth in this
Agreement, subsequent to and in accordance with the written authority granted by the
Governing Body of the Agency, a copy of which writing shall be delivered to PARS.
Any officer of PARS, or his or her designees, shall have the authority to act for and
exercise any of the rights of PARS as set forth in this Agreement.
19. Notices. All notices hereunder and communications regarding the interpretation of
the terms of this Agreement, or changes thereto, shall be effected by delivery of the
notices in person or by depositing the notices in the U.S. mail, registered or certified
mail, return receipt requested, postage prepaid and addressed as follows:
(A) To PARS: PARS; 4350 Von Karman Avenue, Suite 100, Newport Beach, CA
92660; Attention: President
(B) To Agency: City of Santa Ana; 20 Civic Center Plaza, M-17, P.O. Box 1988,
Santa Ana, CA 92702; Attention: Executive Director of Finance and
Management Services
Notices shall be deemed given on the date received by the addressee.
Page 4
55C-10
20. Term of Agreement. This Agreement shall remain in effect for the period beginning
December 19, 2011 and ending December 31, 2014 ("Term"). This Agreement will
continue unchanged for successive twelve month periods following the Term unless
either party gives written notice to the other party of the intent to terminate prior to
ninety (90) days before the end of the Term.
21. Amendment. This Agreement may not be amended orally, but only by a written
instrument executed by the parties hereto.
22. Entire Agreement. This Agreement, including exhibits, contains the entire
understanding of the parties with respect to the subject matter set forth in this
Agreement. In the event a conflict arises between the parties with respect to any
term, condition or provision of this Agreement, the remaining terms, conditions and
provisions shall remain in full force and legal effect. No waiver of any term or
condition of this Agreement by any party shall be construed by the other as a
continuing waiver of such term or condition.
23. Attorneys Fees. In the event any action is taken by a party hereto to enforce the
terms of this Agreement the prevailing party herein shall be entitled to receive its
reasonable attorney's fees.
24. Counterparts. This Agreement may be executed in any number of counterparts, and
in that event, each counterpart shall be deemed a complete original and be
enforceable without reference to any other counterpart.
25. Headings. Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.
26. Effective Date. This Agreement shall be effective and control the obligations and
duties of the parties hereto as of the date first above written.
AGENCY:
BY:
TITLE: Executive Director of Finance and Management Services
DATE:
PARS:
BY:
TITLE:
DATE:
Page 5
55C-11
55C-12
EXHIBIT IA
SERVICES
PARS will provide the following services for the City of Santa Ana 3121 Part-Time Social
Security Alternative Retirement Plan:
1. Plan Installation Services:
(A) Meeting with appropriate Agency personnel to discuss plan provisions,
implementation timelines, benefit communication strategies, data reporting and
contribution submission requirements;
(B) Providing the necessary analysis and advisory services to finalize these elements of
the Plan;
(C) Providing the documentation needed to establish the Plan for review by Agency legal
counsel, which must be reviewed and approved by the Agency, as demonstrated by
the execution of this Agreement prior to the commencement of PARS services.
2. Plan Administration Services:
(A) Monitoring the receipt of Plan contributions made by the Agency to the trustee of the
PARS Trust ("Trustee"), based upon information received from the Agency and the
Trustee;
(B) Performing periodic accounting of Plan assets, including the allocation of employer
and employee contributions, distributions, investment activity and expenses (if
applicable) to individual Participant accounts, based upon information received from
the Agency and/or Trustee;
(C) Acting as ongoing liaison between the Participant and the Agency in regard to
distribution payments, which shall include use by the Participants of toll-free
telephone communication to PARS;
(D) Coordinating the processing of Participant distribution payments pursuant to
authorized written Agency certification of distribution eligibility, authorized direction
by the Agency, the provisions further contained in this Agreement, and the provisions
of the Plan;
(E) Directing Trustee to make Participant distribution payments, pursuant to the Agency
authorization provisions in this Agreement, and producing required tax filings
regarding said distribution payments;
(F) Notifying the Trustee of the amount of Plan assets available for further investment
and management, or, the amount of Plan assets necessary to be liquidated in order to
fund Participant distribution payments;
(G) Coordinating actions with the Trustee as directed by the Plan Administrator within
the scope this Agreement;
(H) Preparing and submitting a periodic Non-Contribution report which includes all
Participants who have received no new contributions for a period of time as specified
Page 6
55C-13
by the Plan Administrator, unless directed by the Agency otherwise. PARS is not
obligated by law or otherwise to provide a Non-Contribution report and this report in
no way obligates PARS to generate distributions without specific instruction from the
Agency Plan Administrator as outlined in Section 7 of this Agreement;
(I) Preparing and submitting a monthly report of Plan activity to the Agency, unless
directed by the Agency otherwise;
(J) Preparing and submitting an annual report of Plan activity to the Agency;
(K) Preparing individual annual statements and mailing in bulk to the Agency, unless
directed by the Agency otherwise.
3. Plan Compliance Services: Coordinating and preparing amendments to the Trust, Plan
and other associated legal documents required by federal and/or state agencies to
maintain the Plan in compliance, for review by Agency legal counsel.
4. PARS is not licensed to provide and does not offer tax, accounting, legal, investment or
actuarial advice.
Page 7
55C-14
EXHIBIT 1 B
FEES FOR SERVICES
PARS will be compensated for performance of Services, as described in Exhibit IA
based upon the following schedule:
(A) A distribution fee equal to $20.00 per terminated Participant ("Distribution Fee"),
which shall be deducted solely from the terminating Participant's account or paid by
the Agency. If the total value of the Participant's account is less than $100.00 then
the Distribution Fee will not exceed the Employer contributed portion of the account.
Distribution Fee Payment Option (Please select one option below):
El Distribution Fee shall be paid solely from the terminating Participant's
account.
? Distribution Fee shall be paid by the Agency.
(B) An annual asset fee paid by the Agency or from Plan Assets based on the following
schedule ("Asset Fee"):
For Plan Assets from: Annual Rate:
$0 to $2,500,000 1.50%
$2,500,001 to $5,000,000 1.25%
$5,000,001 to $10,000,000 1.00%
$10,000,001 and above 0.75%
Annual rates are prorated and paid monthly. The annual Asset Fee shall be
calculated by the following formula [Annual Rate divided by 12 (months of the year)
multiplied by the Plan asset balance at the end of the month within each asset range].
If the Asset Fee is taken from Plan Assets, the total Asset Fees due in a given month
shall be allocated proportionately among Participants of the Agency's Plan in that
month, based on account balance. Trustee and Investment Management Fees are not
included.
Annual Asset Fee Payment Option (Please select one option below):
? Annual Asset Fee shall be invoiced and paid by the Agency.
El Annual Asset Fee shall be paid from Plan Assets.
(C) A fee equal to the out of pocket costs charged to PARS by an outside contractor for
formatting contribution data on to a suitable magnetic media, charged only if the
contribution data received by PARS from the Agency is not on readable magnetic
media ("Data Processing Fee").
Page 8
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55C-16
EXHIBIT 1 C
DATA REQUIREMENTS
PARS will provide the Services under this Agreement contingent upon receiving the
following information:
1. Contribution Data - transmitted to PARS by email or on an IBM formatted disk (360K,
1.2 MB or 1.44 MB) in ASCII code or Excel formats containing the following items of
employee information related to the covered payroll period:
(A) Agency name
(B) Employee's legal name
(C) Employee's social security number
(D) Payroll date
(E) Employer contribution amount
(F) Employee contribution amount
2. Distribution Data - written Plan Administrator's (or authorized Designee's) direction to
commence distribution processing, which contains the following items of Participant
information:
(A) Agency name
(B) Participant's legal name
(C) Participant's social security number
(D) Participant's address
(E) Participant's phone number
(F) Participant's birthdate
(G) Participant's condition of eligibility
(H) Participant's effective date of eligibility
(I) Signed certification of distribution eligibility from the Plan Administrator, or
authorized Designee
3. Executed Legal Documents:
(A) Certified Resolution
(B) Plan Document
(C) Trust Agreement
(D) Trustee Investment Forms
4. Other information pertinent to the Services as reasonably requested by PARS.
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55C-18
PARS BENEFIT TRUST
FBO
CITY OF SANTA ANA
PARS 3121 PART-TIME SOCIAL SECURITY
ALTERNATIVE RETIREMENT PLAN
Effective December 19, 2011
TRUST DOCUMENT
Exhibit 3
55C-19
TABLE OF CONTENTS
ARTICLE PAGE
I Trust Fund 3
II Investments 4
III Trustee's Powers 7
IV Trustee's Duties 12
V Restrictions on Transfer 13
VI Resignation, Removal and Succession 14
VII Amendment 14
VIII Liabilities 15
IX Duration and Termination 18
X Miscellaneous 19
2
55C-20
PARS Benefit Trust FBO City of Santa Ana
PARS 3121 Part-Time Social Security Alternative Retirement Plan Effective December 19,
2011
This Trust Agreement (the "Trust Agreement" or "Trust") is made by and among the City of Santa
Ana (the "Agency") as the sponsor of the PARS Benefit Trust FBO City of Santa Ana PARS
3121 Part-Time Social Security Alternative Retirement Plan Effective December 19, 2011 (the
"Plan"), the Plan Administrator or the Plan's administrative committee (the "Plan Administrator"),
Union Bank, N.A., a national banking association as Trustee ("Union Bank, N.A." or the "Trustee")
and Public Agency Retirement Services as Trust Administrator (the "Trust Administrator").
PURPOSE
The Agency has established the PARS Benefit Trust FBO City of Santa Ana PARS 3121 Part-
Time Social Security Alternative Retirement Plan Effective December 19, 2011 for the benefit
of eligible employees.
The Agency has established this Trust for the exclusive purpose of providing Plan benefits to its
employees ("Participants") and their beneficiaries ("Beneficiaries") and defraying reasonable
expenses of the Plan and Trust. The Agency has reserved the right to amend this Trust from time to
time. The Plan Administrator for this Plan and Trust shall mean the person who holds a particular
position or title designated by the Agency's governing body.
The Plan provides that, from time to time, cash and other assets may be provided or foravarded to the
Trustee by the Agency to be held and administered in trust for the uses and purposes of the Plan,
solely for the purpose of providing such benefits. Subject to specific conditions set forth in this
Trust Agreement, the Trustee agrees that it will receive cash and other property of the Plan
acceptable to the Trustee, constituting Plan contributions from the Agency or transfers for the benefit
of the Plan, and shall hold and invest such cash and other property (the "Assets") for the uses and
purposes and upon the terms and conditions stated in this Trust Agreement (the "Trust"). The
Agency intends that the Plan shall qualify under Section 457(b) of the Internal Revenue Code of
1986, as amended (the "Code"), and that the Trust hereby created shall be treated as a trust exempt
from tax under Section 501 of the Code, and shall not be subject to any claims of the Agency's
creditors.
ARTICLE I
TRUST FUND
1.1 Signing Authority. The Agency's Board of Trustees, Board of Directors or other duly
authorized governing body shall certify in writing to the Trustee the names and specimen signatures
of all those who are authorized to act as, and on behalf of, the Plan Administrator, and those names
and specimen signatures shall be updated as necessary by such governing board or other duly
authorized officer of the Agency.
1.2 Acceptance of Assets. All contributions or transfers shall be received by the Trustee in
cash or in any other property acceptable to the Trustee. The Trust shall consist of the contributions
and transfers of Assets received by the Trustee, together with the income and earnings from such
3
55C-21
Assets, and any increments accruing to them. The Trustee shall manage and administer the Trust
without distinction between principal and income. The Trustee shall have no other duty to compute
any amount to be transferred or paid to it by the Agency and it shall not be responsible for the
collection of any contributions or transfers due to the Trust.
1.3 Establishment of Trust. The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Agency and shall be used exclusively for the uses and
purposes of Participants and Beneficiaries as herein set forth. Participants and Beneficiaries shall
have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust.
1.4 Ongoing Contributions to Trust. Agency, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other property acceptable to the Trustee to augment
the principal to be held, administered and disposed of by Trustee as provided in this Trust
Agreement. Neither the Trustee nor any Participant shall have any right to compel such additional
deposits.
1.5 No Duty of Trustee to Enforce Collection. Notwithstanding anything herein to the
contrary, the Trustee shall have no authority or obligation to enforce the collection of any
contribution or transfer to the Trust.
1.6 Plan Administration. The Agency and not the Trustee shall be responsible for
administering the Plan (including without limitation determining the rights of the Agency's
employees to participate in the Plan, determining any Participant's right to benefits under such Plan),
and issuing statements to Participants of their interest in the Trust and Plan.
1.7 Participant Accounts. The Agency shall maintain, or cause to be maintained, a separate
account for each Participant under the Plan (the "Account") in which it shall keep a record of the
share of such Participant under such Plan in the Trust. The Agency may appoint a third-party
administrator or record-keeper (the "Record-keeper") to maintain such Accounts. A Participant's
Account under the Plan shall represent the portion of the Trust allocated to provide such Participant
benefits under such Plan. If the Trustee is directed by the Agency to segregate the Trust into
separate Accounts for each Participant, at the time it makes a contribution to the Trust, the Agency
shall certify to the Trustee the amount of such contribution being made in respect of each Participant
under the Plan.
1.8 Tax Reporting. The Agency and not the Trustee shall be responsible for all income tax
reporting and calculation and payment of any wage withholding or other tax requirements in
connection with the Trust and any contributions thereto, and any income earned thereby, and
payments or distributions therefrom, and Agency agrees to indemnify and defend Trustee against
any liability for any such taxes, interest or penalties resulting from or relating to the Trust, provided,
however, that Union Bank, N.A., as Trustee shall file such tax reports for the Trust as required by
law and as agreed to by the parties in writing from time to time.
ARTICLE II
INVESTMENTS
2.1 Plan Administrator Authority. Except as otherwise provided in this Article II, the Plan
55C-22
Administrator appointed by the Agency shall have all power over and responsibility for the
management, disposition, and investment of the Trust Assets, and the Trustee shall comply with
proper written directions of the Plan Administrator concerning those Assets. The Plan Administrator
shall not issue directions in violation of the terms of the Plan and Trust or prohibited by any
applicable federal or state laws or regulations governing the establishment and operation of trusts by
governmental entities for the purpose of providing retirement benefits for their employees or other
individuals providing services to such entities, including, but not limited to, laws governing the
actions of plan fiduciaries ("Statutes"). Except to the extent required by applicable state or federal
law or regulations, or otherwise provided in this Trust Agreement, the Trustee shall have no duty or
responsibility to review, initiate action, or make recommendations regarding Trust Assets and shall
follow investment directions and retain Assets until directed in writing by the Plan Administrator to
dispose of them. The Trustee shall not be liable for any investment decisions of the Plan
Administrator or any investment losses in the Account attributable to investment decisions of the
Plan Administrator.
2.2 Trustee as ManaEer. The Plan Administrator may also delegate all or a portion of its
investment authority to the Trustee for all or a portion of the Trust Assets. Upon written acceptance
of that delegation, the Trustee shall have full power and authority to invest and reinvest that portion
of the Trust so designated by the Plan Administrator in investments of any kind. The Trustee shall
be responsible for proper diversification of the Assets only if all the Plan Assets are subject to its
management.
The Plan Administrator shall have the responsibility for establishing and carrying out a
funding policy and method consistent with the objectives of the Plan, taking into consideration the
Plan's short-term and long-term financial needs (hereinafter referred to as the "Permissible
Investment Guidelines"). The Trustee's responsibility for investment and diversification of the
Assets in the portion of the Trust for which Trustee has investment discretion shall be subject to, and
is limited by, the funding policy and investment guidelines issued to it by the Plan Administrator and
any Statutes.
It is understood and acknowledged that the Plan Administrator, rather than the Trustee,
shall be responsible for the funding policy, for overall diversification of Trust Assets (unless the
Trustee has investment responsibility for all Plan Assets), for benefit allocation, distribution, and for
overall compliance of the Trust with statutory limitations on the amount of the Trust's investment in
any assets.
2.3 Insurance Contract. The Plan Administrator may direct the Trustee in writing to invest
assets of the Trust in group or individual insurance contracts of all kinds authorized under the Plan,
Statutes and Permissible Investment Guidelines provided such contracts are issued by an insurance
company or companies qualified to do business in more than one state, and the Plan Administrator
shall have the sole responsibility and shall direct the Trustee with respect to such insurance
contracts. The administration of these insurance contracts shall be the sole responsibility of the Plan
Administrator, and the Trustee shall follow the directions of the Plan Administrator with respect to
the administration of any such contracts.
2.4 Independent Investment Manager. The Plan Administrator may appoint one or more
investment managers to direct the Trustee in the investment of all or a specified portion of the Trust
5
55C-23
Assets. Any investment manager shall be a qualified investment advisor under the Investment
Advisors Act of 1940. The Plan Administrator may also remove any investment manager. The Plan
Administrator shall promptly notify the Trustee in writing of the appointment or removal of any
investment manager.
The Plan Administrator shall cause the investment manager to acknowledge to the Trustee in writing
that the investment manager is a fiduciary with respect to the Plan and Trust. If the foregoing
conditions are met, the investment manager shall have the power to manage, acquire, retain, or
dispose of any Trust Assets subject to the investment manager's management and direction. The
Trustee shall not be liable for the acts or omissions of such investment manager, or be under an
obligation to review the investments of, or to invest or otherwise manage any asset of the Trust that
is subject to the management and direction of such investment manager.
2.5 Participant Directed Accounts. The Agency may, by written resolution and execution of
the Adoption Agreement, terminate the Plan Administrator's right to direct the investment and
management of all or any portion of the Assets of the Trust and allow Participants to direct their own
account balances ("Participant Directed Accounts"). Notwithstanding any other provision of this
Trust Agreement, for Participant Directed Accounts, the Trustee shall be entitled to act upon proper
directions of the Plan Administrator, Record-keeper, and Participants including directions in writing,
or oral instructions which Trustee in its discretion may follow without receipt of written instructions,
instruction given by photostatic teletransmission using facsimile signature, or those instructions
which are digitally recorded on the Union Bank Voice Response Unit ("VRU") or internet website.
Trustee is hereby authorized to record conversations and transmissions made in connection with the
Trust. Trustee's recording or lack of recording of any such oral, internet or digital instructions,
and/or receipt or lack of receipt of facsimile transmissions, as reflected in the Trustee's records
maintained in the ordinary course of business shall constitute conclusive proof of Trustee's receipt or
non-receipt of such instructions.
The Trustee and/or Record-keeper shall not be liable in any manner for investment or other losses or
other liability attributable to Participant's directions, or lack thereof, or exercise of control over the
investments of their Participant Directed Accounts. Likewise, the Trustee and/or Record-keeper
shall have no duty or responsibility to review, monitor or make recommendations regarding
investments made at the direction of the Participants or the Plan Administrator. In order for Agency
to be relieved of investment fiduciary liability, the requirements of California law including Section
53213.5 of the California Government Code must be met. The Plan Administrator shall establish
uniform and nondiscriminatory rules for the operation of the Participant Directed Accounts,
including whether the Participant shall direct the Trustee or direct the Plan Administrator who then
directs the Record-keeper and the Record-keeper forwards such directions to the Trustee. Agency
shall designate whether Participant Directed Accounts are to be established pursuant to the
provisions of section 2.5(a) or 2.5(b), below:
(a) Participant Direction in Individually Directed Accounts. If the Agency has so
elected, Participants may have investment direction power over their own segregated account
balances ("Individually Directed Account" or "IDA"). Investments may be directed by Participants
into assets administratively acceptable to Trustee, as limited by guidelines developed by the Plan
Administrator (the "Permissible Investment Guidelines"). Plan Administrator shall notify
Participants of the Plan's Permissible Investment Guidelines as in effect from time to time. In the
absence of directions from a Participant, the Plan Administrator may direct the investment of the
55C-24
IDA. The Trustee may refuse to comply with the directions of the Participant to invest is assets other
than those listed in its Permissible Investments Guidelines or with directions which the Trustee
deems to be improper or contrary to the provisions of the Plan and Trust or the Internal Revenue
Code and shall have no liability for such refusal.
(b) Participant Directed Account within Plan Administrator Selected Investment Options
("Directed Accounts"): If the Agency so elects, and directs the Trustee to execute appropriate legal
agreements, the Participant's Account Balance shall be segregated into a Participant Directed
Account ("Directed Account"), over which the Participant may direct investment into one or more
investment alternatives ("Investment Options"). The Plan Administrator or its appointed Investment
Fiduciary shall have full responsibility for designating the Investment Options under the Plan and for
selecting the underlying investment vehicle(s) for each designated Investment Option into which a
Participant may direct investment of his or her Directed Account. To the extent allowed by law,
neither the Agency, the Plan Administrator, the Record-keeper, nor the Trustee shall have any
responsibility for monitoring the directions of the Participant nor shall the Agency, the Plan
Administrator, the Record-keeper or the Trustee be liable in any manner for investment or other
losses or other liability for following directions of a Participant.
(c) If Directed Accounts are established, notwithstanding any other provision of this
Trust Agreement, the Agency may appoint the Trustee to provide ministerial administrative services
for such accounts by so indicating in the Agency's Plan, provided that an acceptable service
agreement has been executed by and between the Agency, the Plan Administrator, the Trustee and
the Record-keeper.
ARTICLE III
TRUSTEE'S POWERS
3.1 General Trustee's Powers. Except as otherwise provided in Article II, the Trustee shall
have full power and authority with respect to property held in the Trust to do all such acts, take all
proceedings, and exercise all such rights and privileges, whether specifically referred to or not in this
document, as could be done, taken or exercised by the absolute owner, including, without limitation,
the following:
(a) To invest and reinvest the Trust or any part hereof in any one or more kind, type,
class, item or parcel of property, real, personal or mixed, tangible or intangible; or in any one or
more kind, type, class, item or issue of investment or security; or in any one or more kind, type, class
or item of obligation, secured or unsecured; or in any combination of them; and to retain the property
associated with such investment or reinvestment for the period of time that the Trustee deems
appropriate.
(b) To buy, sell, assign, transfer, acquire, loan, lease (for any purpose, including
mineral leases, and for terms within or extending beyond the life of this Trust), exchange and in any
other manner to acquire, manage, deal with and dispose of all or any part of the Trust property, for
cash or credit and upon any reasonable terms and conditions.
(c) To make "deposits" with any bank or savings and loan institution, including any
such facility of the Trustee or an affiliate thereof provided that the deposit bears a reasonable rate of
55C-25
interest;
(d) To retain all or any portion of the Trust in cash temporarily awaiting investment or
for the purpose of making distributions or other payments, without liability for interest thereon,
notwithstanding Trustee's receipt of "float" from such uninvested cash;
(e) To place uninvested cash and cash awaiting distribution in one or more mutual
funds and/or commingled investment funds maintained by or made available by the Trustee, and to
receive compensation from the sponsor of such fund(s) for services rendered, separate and apart
from any trustee's fees hereunder. Trustee or Trustee's affiliate may also be compensated for
providing investment advisory and other services to any such mutual fund or commingled
investment funds. Agency acknowledges receipt of prospectuses for such funds;
(0 To borrow money for the purposes of the Trust from any source other than a party
in interest of the Plan, with or without giving security and to pay interest, to issue promissory notes
and to secure the repayment thereof by pledging all or any part of the Trust assets;
(g) To take all of the following actions as directed by a fiduciary or other person with
investment discretion over the Trust assets; to vote proxies of any stocks, bonds or other securities;
to give general or special proxies or powers of attorney with or without power of substitution; to
exercise any conversion privileges, subscription rights or other options, and to make any payments
incidental thereto; to consent to or otherwise participate in corporate reorganizations or other
changes affecting corporate securities and to delegate discretionary powers and to pay any
assessments or charges in connection therewith; and generally to exercise any of the powers of an
owner with respect to stocks, bonds, securities or other property held in the Trust;
(h) To make, execute, acknowledge and deliver any and all documents of transfer and
conveyance and any and all other instruments that may be necessary or appropriate to carry out the
powers herein granted;
(i) To pay, or cause to be paid, from the Trust any and all real or personal property
taxes, income taxes or other taxes or assessments of any or all kinds levied or assessed upon or with
respect to the Trust or the Plan;
0) To enter into, modify, renew and terminate annuity contracts of deposit
administration of immediate participation or other group or individual type with one or more
insurance companies and to pay or deposit all or any part of the Trust thereunder; to provide in any
such contract for the investment of all or any part of funds so deposited with the insurance company
in securities under separate accounts; to exercise and claim all rights and benefits granted to the
contract holder by any such contracts;
(k) To exercise all the further rights, powers, options and privileges granted, provided
for, or vested in trustees generally under applicable federal or state laws, as amended from time to
time, it being intended that, except as herein otherwise provided, the powers conferred upon the
Trustee herein shall not be construed as being in limitation of any authority conferred by law, but
shall be construed as in addition thereto.
8
55C-26
3.2 Additional Powers. In addition to the other powers enumerated above, and whether or not
the Plan Administrator has retained investment authority, the Trustee in any and all events is
authorized and empowered:
(a) To invest funds in any type of interest-bearing account including without limitation,
time certificates of deposit or interest-bearing accounts issued by Union Bank, N.A., or any mutual
fund or short term investment fund ("Fund"), whether sponsored or advised by Union Bank, N.A. or
any affiliate thereof; Union Bank, N.A. or its affiliate may be compensated for providing investment
advice or other services to such Fund, in addition to any Trustee's fees received pursuant to this
Trust Agreement; provided, that such compensation is reasonable;
(b) To cause all or any part of the Trust to be held in the name of the Trustee (which in
such instance need not disclose its fiduciary capacity) or, as permitted by law, in the name of any
nominee, and to acquire for the Trust any investment in bearer form; but the books and records of
the Trust shall at all times show that all such investments are a part of the Trust and the Trustee shall
hold evidences of title to all such investments;
(c) To serve as custodian with respect to the Trust assets with the sole exception of
insurance policy or annuity contracts, the underlying assets of which shall be maintained by the
insurance company issuer;
(d) To employ such agents and counsel as may be reasonably necessary in managing
and protecting the Trust assets and to pay them reasonable compensation; to employ any broker-
dealer, including any broker-dealer affiliated with the Trustee, and pay to such broker-dealer its
standard commissions; to settle, compromise or abandon all claims and demands in favor of or
against the Trust; and to charge any premium on bonds purchased;
(e) In addition to the powers listed herein, to do all other acts necessary or desirable for
the proper administration of the Trust, as though the absolute owner thereof and to exercise and
perform any and all of the other powers and duties specified in this Trust Agreement;
(0 To abandon, compromise, contest, arbitrate or settle claims or demands; to
prosecute, compromise and defend lawsuits, but without obligation to do so, all at the risk and
expense of the Trust;
(g) To permit such inspections of documents at the principal office of the Trustee as are
required by law, subpoena or demand by United States agency and to disclose the Agency's name to
issuers of securities in connection with shareholder communications unless directed otherwise in
writing;
(h) To comply with all requirements imposed by applicable state Statutes or other
applicable provisions of state or federal law;
(i) To seek written instructions from the Agency, Plan Administrator or other fiduciary
or, to the extent Participants are permitted to direct the investment of all or any portion of their
Accounts under the Plan, from a Participant, on any matter and await written instructions from such
person without incurring any liability. If at any time the Agency, the Plan Administrator, a fiduciary
55C-27
or Participant should fail to give directions to the Trustee, the Trustee may but is not required to act
in the manner that in its discretion seems advisable under the circumstances for carrying out the
purposes of this Trust. Such actions shall be conclusive on the Plan Administrator and the Agency
and the Participant if written notice of the proposed action is given to the Plan Adminis°.rator five (5)
days prior to the action being taken, and the Trustee receives no response;
0) As directed by the Plan Administrator:
(i) To cause the benefits provided under the Plan to be paid directly to the
persons entitled thereto under the Plan, and in the amounts and in the manner specified, or to
disburse such sums to the Agency, who shall be responsible to distribute sums due; and make
appropriate tax reports to Participants, Beneficiaries and taxing authorities, and to charge such
payments against the Trust with respect to which such benefits are payable;
(ii) To compensate such executive, consultant, actuarial, accounting, investment,
appraisal, administrative, clerical, secretarial, custodial, depository and legal, personnel and other
employees or assistants as are engaged by the Plan Administrator in connection with the
administration of the Plan and to pay from the Trust the necessary expenses of such, personnel,
employees and assistants, to the extent not paid by the Agency and directed by the Plan
Administrator;
(iii) To impose a reasonable charge to cover the cost of furnishing to Participants
or Beneficiaries upon their written request documents as may be legally required by applicable state
or federal law or regulations;
(iv) To act upon proper directions of the Agency, the Plan Administrator or any
other fiduciary or Participant including directions in writing, or oral instructions which Trustee in its
discretion may follow prior to receipt of written instructions, instruction given by photostatic
teletransmission using facsimile signature, or those instructions which are digitally recorded on the
Trustee's oral recording or VRU communications system. If oral or digital instructions are given, to
act upon those in Trustee's discretion prior to receipt of written instructions. Trustee's recording or
lack of recording of any such oral or digital instructions taken in Trustee's ordinary course of
business shall constitute conclusive proof of Trustee's receipt or non-receipt of the oral or digital or
VRU instructions;
In exercising the power and authority under this subparagraph (iv), the Trustee will perform
telephonic verification to the Plan Administrator, or other authorized representative properly
designated by the Plan Administrator or the Agency, or such other security procedure selected by the
Plan Administrator prior to wire transfer of funds as the Trustee may require. The Plan
Administrator, the Agency, and the Plan assume all risk with respect to delays or transfers if the
Trustee is unable to reach the Plan Administrator or other authorized representative properly
designated by the Plan Administrator, or in the event of delay as a result of attempts to comply with
any other security procedure selected by the Plan Administrator in connection with wire transfers or
otherwise;
(v) To pay from the Trust the expenses reasonably incurred in the administration
of the Trust as provided in the Plan, to the extent such expenses are not paid by the Agency pursuant
to Section 10.2;
10
55C-28
(vi) To maintain insurance for such purposes, in such amounts and with such
companies as the Plan Administrator shall elect, including insurance to cover liability or losses
occurring by reason of the acts or omissions of fiduciaries (but only if such insurance permits
recourse by the insurer against a fiduciary in the case of a breach of a fiduciary obligation by such
fiduciary).
3.3 Delegatee. The Plan Administrator may delegate certain authority, powers and duties to an
entity to act in those matters specified in the delegation ("Delegatee"). Any such delegation must be
in a writing that names and identifies the Delegatee, states the effective date of the delegation,
specifies the authority and duties delegated, is executed by the Plan Administrator and is
acknowledged in writing by the Delegatee, the Trust Administrator (if not the Delegatee) and the
Trustee. Such delegation shall be effective until the Trustee and the Trust Administrator are directed
in writing by the Plan Administrator that the delegation has been rescinded or modified.
3.4 Directions to Trustee. Except as otherwise provided in this Trust Agreement, all
directions to the Trustee from the Plan Administrator or Delegatee must be in writing and must be
signed by the Plan Administrator or Delegatee, as the case may be. For all purposes of this Trust
Agreement, direction shall include any certification, notice, authorization, application or instruction
of the Plan Administrator, Delegatee or Trustee appropriately communicated. The above
notwithstanding direction may be implied if the Plan Administrator or Delegatee has knowledge of
the Trustee's intentions and fails to file written objection.
The Trustee shall have the power and duty to comply promptly with all proper direction of the Plan
Administrator, or Delegatee, appointed in accordance with the provisions of this Trust Agreement.
In the case of any direction deemed by the Trustee to be unclear or ambiguous the Trustee may seek
written instructions from the Plan Administrator, the Agency or the Delegatee on such matter and
await their written instructions without incurring any liability. If at any time the Plan Administrator
or the Delegatee should fail to give directions to the Trustee, the Trustee may act in the manner that
in its discretion seems advisable under the circumstances for carrying out the purposes of the Trust
which may include not taking any action. The Trustee may request directions or clarification of
directions received and may delay acting until clarification is received. In the absence of timely
direction or clarification, or if the Trustee considers any direction to be a violation of the Trust
Agreement or any applicable law, the Trustee shall in its sole discretion take appropriate action, or
refuse to act upon a direction.
3.5 Trust Administrator. The Plan Administrator has appointed PARS as the Trust
Administrator. The Trust Administrator has accepted its appointment subject to the Plan
Administrator's delegation of authority, to act as such, pursuant to Section 3.3 of this Trust
Agreement. The Trust Administrator's duties involve the performance of the following services
pursuant to the provisions of this trust agreement and the Agreement for Administrative Services:
(a) Performing periodic accounting of the Trust;
(b) Directing the Trustee to (i) make distributions from the Trust, as directed and
authorized by the Plan Administrator pursuant to the Agreement for Administrative
Services, to Participants pursuant to the provisions of the Agency's Plan and, (ii)
liquidate assets in order to make such distributions;
11
55C-29
(c) Notifying the Investment Fiduciary of the amount of Assets in the Trust available for
further investment and management by the Investment Fiduciary;
(d) Allocating contributions, earnings and expenses to the Trust;
(e) Directing the Trustee to pay insurance premiums, to pay the fees of the Trust
Administrator and to do such other acts as shall be appropriate to carry out the intent
of the Trust.
(f) Such other services as the Agency and the Trust Administrator may agree.
3.6 Additional Trust Administrator Services. The Plan Administrator may at any time retain
the Trust Administrator as its agent to perform any act, keep any records or accounts and make any
computations which are required of the Agency or the Plan Administrator by this Trust Agreement
or by the Agency's Plan. The Trust Administrator shall be separately compensated for such service
and such services shall not be deemed to be contrary to the Trust Agreement.
3.7 Trust Administrator's Compensation. As may be agreed upon from time to time by the
Agency and Trust Administrator, the Trust Administrator will be paid reasonable compensation for
services rendered or reimbursed for expenses properly and actually incurred in the performance of
duties with respect to the Trust in accordance with Section 53217 of the California Government
Code.
3.8 Resignation or Removal of Trust Administrator. The Trust Administrator may resign at
any time by giving at least one hundred twenty (120) days written notice to the Plan Administrator
and the Trustee.
ARTICLE IV
TRUSTEE'S DUTIES
4.1 Powers Subiect to Duties. The Trustee shall exercise any of the foregoing powers from
time to time as required by any applicable federal or state law.
4.2 Records. The Trustee shall maintain or cause to be maintained suitable records, data and
information relating to its functions hereunder. The Trustee shall keep accurate and detailed
accounts of all investments, receipts, disbursements and other actions hereunder. Its books and
records relating to the Trust shall be open to inspection and audit at all reasonable times by the
Agency, the Plan Administrator or their duly authorized representatives.
4.3 Accounts. Within ninety days after the close of each Plan Year and within ninety days
after the resignation or removal of the Trustee as provided in Article VI hereof, the Trustee shall
render to the Agency a written account showing in reasonable summary the investments, receipts,
disbursements and other transactions engaged in by the Trustee during the preceding Plan Year or
accounting period with respect to the Trust. Such written accounts shall set forth the assets and
liabilities of the Trust. The Agency or Plan Administrator shall have ninety days after the Trustee's
mailing of each such written account within which to file with the Trustee written objections. Upon
the expiration of each such period, the Trustee shall be forever released and discharged from all
12
55C-30
liability and accountability to the Agency, the Plan Administrator and Participants with respect to the
propriety of its acts and transactions shown in such account except with respect to any such acts or
transactions as to which the Agency files written objections within such ninety-day period with the
Trustee.
4.4 Reports. The Trustee shall file such descriptions and reports and shall furnish such
information and make such other publications, disclosures, registrations and other filings as are
required of the Trustee by the Code or any other applicable law or regulation.
4.5 Follow Plan Administrator and Investment Manager Direction. The Trustee shall have
the power and duty to comply promptly with all proper directions of the Plan Administrator, the
Agency, and any duly appointed investment manager. Except as to investment directions received
from the Plan Administrator or investment manager, the Trustee shall not act on any directions or
requests received from Participants.
ARTICLE V
RESTRICTIONS ON TRANSFER
5.1 Persons to Receive Pavment.
(a) As directed by the Plan Administrator, the Trustee shall, except as otherwise
provided in subsection (b), pay all amounts distributable hereunder only to the person or persons
designated under the Plan or deposit to the Participant's or Beneficiary's checking or savings account
and not to any other person or corporation, and only to the extent of assets held in the Trust. The
Plan Administrator's instructions to the Trustee regarding whether or not to make distributions, and
the amount of such distributions, shall be conclusive on all Participants and Beneficiaries.
(b) In the event any controversy shall arise as to the person or persons to whom any
distribution or payment is to be made by the Trustee, or as to any other matter arising in the
administration of the Plan or Trust, the Trustee may, (i) retain the amount in controversy pending
resolution of the controversy, (ii) file an action seeking declaratory relief, or (iii) interplead the
Trust Assets in issue, and (iv) name the Agency and/or any or all persons making conflicting
demands as necessary parties.
(c) The Trustee shall not be liable for the payment of any interest or income on any
amount withheld or interpleaded under subsection (b).
(d) The expenses incurred by the Trustee for taking any action under subsection (b)
shall be charged by the Trustee to the Trust unless paid by the Agency.
5.2 Assignment and Alienation Prohibited. In accordance with Section 457 of the Code,
Trust Assets shall not be subject to any claims of Agency or other creditors. Additionally, no benefit
or interest available hereunder shall be subject in any manner to assignment or alienation, whether
voluntarily or involuntarily, or to legal process except as permitted in the Internal Revenue Code,
applicable state or federal law, or as provided in the Plan.
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55C-31
ARTICLE VI
RESIGNATION, REMOVAL AND SUCCESSION
6.1 Resignation or Removal of Trustee. The Trustee may resign at any time upon ninety
days' prior written notice to the Agency (which notice may be waived by the Agency). Agency may
remove the Trustee upon ninety days' prior written notice to the Trustee (which notice may be
waived by the Trustee).
6.2 Designation of Successor. Upon notice of the Trustee's resignation or removal, Agency
shall promptly designate a Successor Trustee who will accept transfer of the assets of the Trust. If
no Successor Trustee is designated within thirty days of notice of Trustee's resignation or removal,
the Plan Administrator shall designate a Successor Trustee.
6.3 Court Appointment of Successor. If neither the Agency nor the Plan Administrator
designates a Successor Trustee within thirty days after the Trustee gives notice of resignation or
receives notice of removal, the Trustee may, at the expense of the Trust, apply to a court of
competent jurisdiction to appoint a Successor Trustee. Until a Successor Trustee is appointed, and
all Trust assets are delivered to the Successor Trustee, the Trustee shall be entitled to be
compensated for its services according to its published fee schedule then in effect for acting as
Trustee in accordance with the Plan and Trust.
6.4 Successor's Powers. A Successor Trustee shall have the same powers and duties as those
conferred upon the original Trustee hereunder. A resigning Trustee shall transfer the Trust Assets
and shall deliver the books, accounts and records of the Trust to the Successor Trustee as soon as
practicable. The resigning Trustee is authorized, however, to reserve such amount from the Assets
of the Trust as may be necessary for the payment of its fees and expenses incurred prior to its
resignation, and the Trust Assets shall remain liable to reimburse the resigning Trustee for any costs,
expenses or attorneys' fees or losses incurred, whether before or after resignation, due solely to
Trustee's holding title to and administration of the Trust Assets.
6.5 Successor's Duties. A Successor Trustee shall have no duty to audit or otherwise inquire
into the acts and transactions of its predecessor.
ARTICLE VII
AMENDMENT
7.1 Power to Amend. The Agency shall have the right at any time, and from time to time, to
modify or amend this Trust Agreement in whole or in part, effective upon thirty days' prior written
notice to the Trustee, provided, however, that the Trustee's duties and responsibilities shall not be
amended without the Trustee's express written consent.
14
55C-32
7.2 Limitation on Amendment. No amendment shall be made, at any time, under which any
part of the Trust may be diverted to purposes other than for the exclusive benefit of Participants and
their Beneficiaries.
7.3 Conformity with Law. Notwithstanding anything herein to the contrary, this Trust
Agreement may be amended prospectively or retroactively at any time by the Agency if deemed
necessary to conform to the provisions and requirements of the Internal Revenue Code or regulations
promulgated pursuant thereto in order to maintain the tax-exempt status hereof thereunder, or to
conform to the provisions and requirements of any law, regulation, order or ruling affecting the
character or purpose of the Plan or Trust. No such Amendment shall be effective to add or change
the Trustee's powers or duties absent Trustee's written consent.
ARTICLE VIII
LIABILITIES
8.1 Declaration of Intent. Nothing in this Article purports to relieve a fiduciary from liability
for any responsibility, obligation or duty under any applicable Statutes. However, to the full extent
permitted by law, it is the intent of this Article to relieve each fiduciary from all liability for any acts
or omissions of any other fiduciary or any other person and to declare the absence of liabilities of all
persons referred to in this Article to the extent not imposed by law or by provisions of this Trust
Agreement. Each of the following Sections, in declaring such limitations, is set forth without
limiting the generality of this Section but in each case shall be subject to the provisions, limitations
and policies set forth in this Section.
8.2 General Limitations of Liability.
(a) No fiduciary shall be liable with respect to a breach of fiduciary duty under any
applicable Statutes if such breach was committed before he or she became a fiduciary or after he or
she ceased to be a fiduciary.
(b) No fiduciary shall be liable for any act or omission of any other person to whom
fiduciary responsibilities (other than Trustee responsibilities) are allocated by the Plan, the Trust
Agreement or by a fiduciary.
8.3 Liability of the Trustee.
(a) The Trustee shall have no powers, duties or responsibilities with regard to the
administration of the Plan or to determine the rights or benefits of any person having or claiming an
interest under the Plan or in the Trust or under this Trust Agreement or to examine or control any
disposition of the Trust or part thereof which is directed by the Plan Administrator.
(b) The Trustee shall have no liability for the adequacy of contributions for the
purposes of the Plan or for enforcement of the payment thereof.
(c) The Trustee shall have no liability for the acts or omissions of the Agency or the
Plan Administrator.
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(d) The Trustee shall have no liability for following proper directions of a fiduciary, the
Agency, the Plan Administrator or a Participant when such directions are made in accordance with
this Trust Agreement.
(e) During such period or periods of time, if any person other than the Trustee,
including but not limited to a Participant, is directing the investment and management of Trust
Assets, the Trustee shall have no obligation to determine the existence of any conversion,
redemption, exchange, subscription or other right relating to any securities purchased on the
directions of such person if notice of any such right was given prior to the purchase of such
securities. If such notice is given after the purchase of such securities, the Trustee shall notify the
Plan Administrator, which shall transmit the notice to the directing party. The Trustee shall have no
obligation to exercise any such right unless it is informed of the existence of the right and is
instructed to exercise such right, in writing, by a fiduciary or a Participant through the Plan
Administrator within a reasonable time prior to the expiration of such right.
(0 During such period or periods of time, if the Trustee is directed to purchase
securities issued by any foreign government or agency thereof, or by any corporation domiciled
outside of the United States, it shall be the responsibility of the directing party to advise the Trustee
in writing with respect to any laws or regulations of any foreign countries or any United States
territories or possessions which shall apply, in any manner whatsoever, to such securiti.-s, including,
but not limited to, receipt of dividends or interest by the Trustee for such securities.
(g) If the Plan and Trust cease to be subject to Sections 457 and 501 of the Code, the
Agency shall immediately notify Trustee. Agency shall indemnify the Trustee for any federal or
state income taxes, and any federal estate and state estate or inheritance taxes which the Trustee is
required to pay as a result of a distribution made at the direction of the Plan Administrator, in which
event the Agency shall be subrogated to the right of the Trustee to proceed against such Participant,
Beneficiary, the executor of the estate of a deceased Participant or any other person for
reimbursement of the amount paid and any taxes due.
8.4 Indemnification of Trustee by Agency.
(a) The Trustee shall not be liable for, and the Agency agrees to indemnify and hold the
Trustee harmless from and against any claims, demands, loss or liability imposed on the Trustee,
including reasonable attorneys' fees and costs incurred by the Trustee, caused by and related to (i)
any acts taken in accordance with any directions (or any failure to act in the absence of such
directions) from the Plan Administrator, or any other party to whom Plan Administrator has given
authority to direct the Trustee, which the Trustee reasonably believes to have been given by any of
them; (ii) the negligence or willful misconduct of the Plan Administrator, or any other person
designated to act on Plan Administrator's behalf; or (iii) the Plan Administrator's execution of its
duties under this Trust Agreement, except in the event of the Trustee's own negligence or material
breach of this Agreement which directly causes the loss to the Trust.
(b) The Agency further agrees to indemnify the Trustee for and against any claims,
demands or liabilities imposed on the Trustee, including reasonable attorneys' fees and costs
incurred by the Trustee, which exceed amounts payable or available from the Trust, arising as a
result of claims asserted by a third person or persons, not otherwise described in (a), and whether
16
55C-34
such person or persons are related to the Trust, for action or failure to take action with respect to
Trust Assets.
8.5 Indemnification of Agency by Trustee. The Trustee agrees to indemnify the Agency
against, and hold the Agency harmless from, all liabilities and claims (including reasonable
attorney's fees and costs incurred by the Agency) against the Agency as a result of any breach of
fiduciary responsibility by the Trustee which proximately causes loss to the Trust, and where Trustee
knowingly participates in such a breach, knowingly undertakes to conceal such breach, has actual
knowledge of such breach and fails to take reasonable action to remedy such breach or through its
negligence or willful misconduct in performing its duties under this Agreement, proximately causes
loss to the Trust.
8.6 Indemnification of Trustee by Trust Administrator. The Trustee shall not be liable for,
and Trust Administrator shall indemnify and hold the Trustee (including its officers, agents,
employees and attorneys) harmless from and against any claims, demand, loss, costs, expense or
liability imposed on the indemnified party, including reasonable attorneys' fees and costs incurred
by the indemnified party, arising as a result of Trust Administrator's active or passive negligent act
or omission or willful misconduct in the execution or performance of its duties under this
Agreement.
8.7 Indemnification of Trust Administrator by Trustee. The Trust Administrator shall not be
liable for, and Trustee shall indemnify and hold the Trust Administrator (including its officers,
agents, employees and attorneys) harmless from and against any claims, demand, loss, costs,
expense or liability imposed on the indemnified party, including reasonable attorneys' fees and costs
incurred by the indemnified party, arising as a result of Trustee's active or passive negligent act or
omission or willful misconduct in the execution or performance of its duties under this Agreement.
8.8 Indemnification of Agency by Trust Administrator. The Agency shall not be liable for,
and Trust Administrator shall indemnify and hold the Agency (including its officers, agents,
employees and attorneys) harmless from and against any claims, demand, loss, costs, expense or
liability imposed on the indemnified party, including reasonable attorneys' fees and costs incurred
by the indemnified party, arising as a result of Trust Administrator's active or passive negligent act
or omission or willful misconduct in the execution or performance of its duties under this
Agreement.
8.9 Indemnification of Trust Administrator by Agency. The Trust Administrator shall not be
liable for, and Agency shall indemnify and hold the Trust Administrator (including its officers,
agents, employees and attorneys) harmless from and against any claims, demand, loss, costs,
expense or liability imposed on the indemnified party, including reasonable attorneys' fees and costs
incurred by the indemnified party, arising as a result of Agency's active or passive negligent act or
omission or willful misconduct in the execution or performance of its duties under this Agreement.
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ARTICLE IX
DURATION AND TERMINATION
9.1 Termination. It is intended that this Trust shall be treated as being exempt from tax under
Section 501(a) of the Code and that the Plan referred to herein shall qualify under Section 457(b) of
the Code. However, notwithstanding any other provisions of the Trust, if the Internal Revenue
Service is requested to issue to the Agency a favorable written determination or ruling with respect
to the initial qualification of the Plan and exemption of the Trust from tax and such request is denied,
the Trustee shall, after receiving a written direction from the Plan Administrator, pay to each
Participant that portion of the Trust applicable to said Participant's voluntary contributions, if any,
and provided the Plan so states, pay to the Agency any part of the Trust attributable to Agency
contributions then remaining in the Trustee's possession, less any investment losses and Trustee's
fees and costs incurred to date of distribution. As a condition to such repayment, Agency shall be
solely responsible for any tax reporting and withholding required, and the Agency agrees to
indemnify, defend, and hold the Trustee harmless from all claims, actions, demands, or liabilities
arising in connection with such repayment, and provided further that such repayment will occur
within one year after the date the request for qualified status is denied.
9.2 Exclusive Benefit. This Trust may be terminated at any time by the Agency, and upon
such termination, the Trust Assets shall be distributed by the Trustee as and when directed by the
Plan Administrator in accordance with the provisions of this Trust Agreement and the Plan
document. From the date of termination of the Plan and until the final distribution of the Trust, the
Trustee shall continue to have all the powers provided under this Trust that are necessary or
desirable for the orderly liquidation and distribution of the Trust. In no instance upon any
termination, or discontinuance and subsequent distribution shall the Trust or any part of it be used
for, or diverted to, purposes other than for the exclusive benefit of Participants, their Beneficiaries,
and defraying the administrative expenses of the Plan and Trust until all Plan liabilities have been
satisfied, except in the instance of the failure of the Trust initially to qualify for tax-exempt status as
set forth in Section 9.1 and in the event of a return of assets mistakenly contributed as set forth in
Section 9.3.
9.3 Return of Mistaken Contributions. Notwithstanding any other provision of this
Agreement, it is specifically provided that if a contribution or any portion thereof is made by the
Agency by virtue of a mistake of fact, the Trustee shall, upon written request of the Agency, return
such amounts as may be permitted by law to the Agency.
9.4 Duration. This Trust shall continue in full force and effect for the maximum period of
time permitted by law and in any event until the expiration of twenty-one years after the death of the
last surviving person who was living at the time of execution hereof who at any time becomes a
Participant in the Plan, unless this Trust is sooner terminated in accordance with the Plan or the
terms of this Trust Agreement.
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ARTICLE X
MISCELLANEOUS
10.1 Delegation. By written notice to the Trustee, the Plan Administrator or the Agency may
authorize the Trustee to act on matters in the ordinary course of the business of the Trust or on
specific matters upon the signature of its delegate.
10.2 Expenses and Taxes.
(a) The Agency, or at its option, the Trust, shall pay the Trustee its expenses in
administering the Trust and reasonable compensation for its services as Trustee at a rate to be agreed
upon by the parties to this Agreement, based upon Trustee's published fee schedule. However, the
Trustee reserves the right to alter this rate of compensation at any time by providing the Agency with
notice of such change at least thirty days prior to its effective date. Reasonable compensation shall
include compensation for any extraordinary services or computations required, such as determination
of valuation of assets when current market values are not published and interest on funds to cover
overdrafts. The Trustee shall have a lien on the Trust for compensation and for any reasonable
expenses including counsel, appraisal, or accounting fees, and these may be withdrawn from the
Trust as and when viewed and payable, or if Agency has elected to pay expenses of the Trust, may
be withdrawn from the Trust unless paid by the Agency within thirty days after mailing of the
written billing by the Trustee.
(b) Reasonable counsel fees, reasonable costs, expenses, and charges of the Trustee
incurred or made in the performance of its duties, including but not limited to expenses relating to
investment of the Trust such as broker's commissions, stamp taxes, and similar items and all taxes of
any and all kinds that may be levied or assessed under existing or future laws upon or in respect to
the Trust or the income thereof shall be paid from the Trust Assets, unless paid by the Agency.
10.3 Third Parties.
(a) No person dealing with the Trustee shall be required to follow the application of
purchase money paid or money loaned to the Trustee or inquire as to whether the Trustee has
complied with the requirements hereof.
(b) In any judicial or administrative proceedings, only the Agency and the Trustee shall
be necessary parties and no Participant or other person having or claiming any interest in the Trust
shall be entitled to any notice or service of process (except as required by law). Any judgment,
decision or award entered in any such proceeding or action shall be conclusive upon all interested
persons.
10.4 Successor Agency. If any successor to an Agency continues the Plan adopted by the
Agency, such successor shall concurrently become a successor first party to this Trust Agreement by
giving written notice of its adoption of the Plan and this Trust Agreement to the Trustee by duly
authorized persons; such successor Agency shall become a signatory to this Trust Agreement upon
its written notice to Trustee of the Successor's adoption hereof.
10.5 Relation to Plan. All words and phrases used herein shall have the same meanings as in
the Plan, and this Trust Agreement and the Plan shall be read and construed together. Whenever the
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Plan provides that the Trustee shall act as therein prescribed, the Trustee shall be and is hereby
authorized and empowered to do so for all purposes as fully as though specifically so provided
herein or so directed by the Plan Administrator. The Trustee shall furnish the Agency with copies of
the Trust Agreement and all amendments thereto.
10.6 Use of Trust Funds. Except as provided in Section 9.2 and 9.3, under no circumstances
shall any part of the Trust be recoverable by the Agency from the Trustee or from any Participant or
former Participant, his or her Beneficiaries, or any other person or be used for or diverted to
purposes other than for the exclusive purposes of providing benefits to Participants and their
Beneficiaries, provided, however, that:
(a) An Agency's excess contribution may be returned to such Agency in accordance
with the provisions of the Plan, and
(b) The portion, if any, of the Trust attributable to an Agency not required for the
satisfaction of all liabilities to Participants and their Beneficiaries shall, upon such Agency's
termination of the Plan, revert to such Agency.
10.7 Location of Trust Fund Assets. Except as authorized by applicable state or federal laws
or regulations, the indicia of ownership of any assets of the Trust and Plan shall not Le maintained
outside the jurisdiction of the District Courts of the United States.
10.8 Arbitration of Disputes. Any dispute under this Agreement shall be resolved by
submission of the issue to a member of the American Arbitration Association who is chosen by the
Agency and the Trustee. If the Agency and the Trustee cannot agree on such a choice, each shall
nominate a member of the American Arbitration Association, and the two nominees will then select
an arbitrator. Expenses of the arbitration shall be paid as decided by the arbitrator. Venue and
jurisdation shall be in the State of California, County of Orange.
10.9 Partial Invalidity. If any provision of this Trust Agreement is held to be invalid or
unenforceable for any reason, this Agreement shall be construed and enforced as if such provisions
had not been included and such illegality or invalidity shall not affect the remaining portions of this
Trust Agreement, unless such invalidity prevents accomplishment of the objectives and purposes of
this Trust Agreement and the Plan. In the event of any such holding, the parties will immediately
amend this Trust Agreement as necessary to remedy any such defect.
10.10 Construction. This Trust Agreement shall be constructed, administered and enforced
according to the Internal Revenue Code and where state law is applicable, under applicable Statutes
and laws of the State of California applied fairly and equitably in accordance with the purposes of
the Plan.
***Signature Page Follows***
20
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ADOPTION
Executed this day of , 201
City of Santa Ana, Sponsor of: PARS Benefit Trust FBO City of Santa Ana PARS 3121 Part-
Time Social Security Alternative Retirement Plan Effective December 19, 2011.
By:
(Signature)
Executive Director of Finance and Management Services
(typed or printed name)
(title)
UNION BANK, N.A.
TRUSTEE
Accepted this _ day of 120
By:
(Signature)
(typed or printed name)
(title)
PUBLIC AGENCY RETIREMENT SERVICES
TRUST ADMINISTRATOR
Accepted this _ day of , 20
By:
(Signature)
(typed or printed name)
(title)
Accepted this _ day of , 20
By:
(Signature)
(typed or printed name)
(title)
21
55C-39
55C-40
THE CITY OF SANTA ANA
PUBLIC AGENCY RETIREMENT SYSTEM
3121 PART-TIME SOCIAL SECURITY
ALTERNATIVE RETIREMENT PLAN
Amended and Restated
Effective December 19, 2011
Exhibit .4
NB 1:564577.3
55C-41
INTRODUCTION
The City of Santa Ana (the "Employer") has adopted this deferred compensation
plan for the benefit of its eligible employees. This document is a full amendment and
restatement of the City of Santa Ana 3121 Part-Time Seasonal Temporary Deferred
Compensation Plan adopted effective January 1, 1992.
It is intended that this plan and the trust established to hold the assets of the plan
shall be an eligible deferred compensation plan under Section 457 of the Internal
Revenue Code of 1986, together with any amendments thereto (the "Code"). It is further
intended that the plan shall meet all of the requirements of a government alternative
retirement system under Code Section 3121(b)(7)(F). It is also intended that this plan
and the trust established hereunder shall meet the requirements of a pension trust under
California Government Code sections 53215 - 53224, or their successor sections. At any
time prior to the satisfaction of all liabilities with respect to participants and their
beneficiaries under the trust created pursuant to this plan, the trust assets shall not be used
for, or diverted to, purposes other than the exclusive benefit of participants or their
beneficiaries, as prescribed in Section 457(g)(1) of the Code.
NB 1:564577.3
55C-42
ARTICLE I
PARTICIPATION
1.1 Eligibility for Benefits.
An Eligible Employee shall become a Participant on the first day the Employee is
not accruing a benefit under another Retirement System provided by the Employer.
1.2 Participation.
Participation of a Participant shall commence as of the date specified in Section
1.1 and shall continue during the Participant's employment with the Employer and until
the occurrence of a Break in Employment or until the Participant is no longer an Eligible
Employee or commences benefit accruals under another Retirement System provided by
the Employer.
An Employee who becomes an Eligible Employee while on an Approved
Absence shall not become a Participant until the end of his or her Approved Absence; but
a Participant who is on Approved Absence shall continue as a Participant during the
period of his or her Approved Absence.
1.3 Reemployment as an Eligible Employee.
An Eligible Employee who has become a Participant in accordance with Section
1. 1, but who ceases to be a Participant in accordance with Section 1.2, will again become
a Participant immediately upon meeting the requirements of Section 1.1.
1.4 Qualified Military Service.
Notwithstanding any provision of the Plan to the contrary, contributions, benefits,
and service credit with respect to qualified military service will be provided in
accordance with Section 414(u) of the Code. In the case of a Participant who dies while
performing qualified military service, the survivors of the Participant are entitled to any
NB 1:564577.3 2
55C-43
additional benefits (other than benefit accruals relating to the period of qualified military
service) provided under the Plan had the Participant resumed and then terminated
employment on account of death.
1.5 Designation of Beneficiary.
(a) Each Participant shall designate in writing the Beneficiary or Beneficiaries
whom such Participant desires to receive the benefits (if any) that are payable under this
Plan in the event of the Participant's death. Such designation must be evidences by a
written instrument filed with the Employer, on a form prescribed by the Employer, and
signed by the Participant.
(b) Except as set forth in subsection (c), the Beneficiary of a married
Participant shall be the Participant's spouse at the date of death, unless the written
consent of such spouse is provided upon a form acceptable to the Employer. If no valid
designation of Beneficiary, along with a valid spousal consent, is on file with the
Employer at the time of the death of the Participant, or if for any reason at the sole
discretion of the Employer, such designation is defective, then (except as set forth in
subsection (c)) the spouse of such Participant shall be conclusively deemed to be the
Beneficiary designated to receive such benefit.
(c) The spousal consent required under subsection (b) shall not be required if
Participant declares in writing that one of the following conditions exists:
(i) The Participant is not married;
(ii) The Participant does not know, and has taken all reasonable steps
to determine, the whereabouts of the spouse;
(iii) The spouse is incapable of executing the acknowledgment because
of an incapacitating mental or physical condition;
N131:564577.3 3
55C-44
(iv) The Participant and spouse have executed a marriage settlement
agreement that makes the community property laws inapplicable to the marriage;
or
(v) The current spouse has no identifiable community property interest
in the benefits.
(d) Upon the Employer being provided with written notice of the dissolution
of marriage of a Participant, any earlier designation of the Participant's former spouse as
a Beneficiary shall be treated as though the Participant's former spouse had predeceased
the Participant, unless prior to payment of benefits on behalf of the Participant (i) the
Participant executes and delivers another Beneficiary designation that complies with this
Section 1.5 and that clearly names such former spouse as a Beneficiary, or (ii) there is
delivered to the Plan a domestic relations order providing that the former spouse is to be
treated as the Beneficiary. In any case in which the Participant's former spouse is treated
under the Participant's Beneficiary designation as having predeceased the Participant, no
heirs or other beneficiaries of the former spouse shall receive benefits from the Plan as a
Beneficiary of the Participant except as provided otherwise in the Participant's
Beneficiary designation.
(e) For purposes of this Section 1.5 only: (1) all references to 'marriage' shall
also include 'registered domestic partnerships,' (2) individuals in a 'registered domestic
partnership' shall be considered `married,' and (3) all references to a 'spouse' shall also
include a `registered domestic partner.' A `registered domestic partner' and a `registered
domestic partnership' refers to persons and partnerships satisfying the requirements of
the California Family Code and officially registered as of the date of death with the
NB 15645773 4
55C-45
Secretary of State as such in accordance with Section 298.5 of the California Family
Code.
NB 1564577.3
55C-46
ARTICLE II
CONTRIBUTIONS
2.1 Employer Contributions.
For each day that an Eligible Employee remains a Participant under this Plan, the
Employer shall contribute three and seventy-five hundredths percent (3.75%) of his or
her Compensation to his or her Account. The Employer shall contribute such amounts to
the Trust at such times as are determined by the Employer in its discretion, but no less
frequently than annually.
2.2 Employee Contributions.
For each day that an Eligible Employee remains a Participant under this Plan, the
Employee shall contribute three and seventy-five hundredths percent (3.75%) of his or
her Compensation to his or her Account. Such contributions shall be pre-tax
contributions accomplished by means of compensation reduction and shall be credited to
his or her Account. The Employee shall contribute such amounts to the Trust at such
times as are determined by the Employer in its discretion, but no less frequently than
annually.
2.3 Limitations on Contributions.
(a) Normal Limitation. Except as provided in Subsection (b) below, the
maximum amount which may be contributed on behalf of a Participant for any taxable
year of the Participant (the "Normal Limitation") shall not exceed the lesser of (i) the
Applicable Dollar Amount or (ii) one hundred percent (100%) of the Participant's
Compensation.
(b) Catch-Up Limitation. For each of a Participant's last three (3) taxable
years ending before the Participant attains Normal Retirement Age, the maximum amount
NB 1:564577.3 6
55C-47
which may be contributed on behalf of that Participant for that taxable year (the "Catch-
Up Limitation") shall be the lesser of (i) twice the Applicable Dollar Amount or (ii) the
amount determined under the immediately following sentence. The amount referred to in
Section 2.3(b)(ii) is the sum of (i) the Normal Limitation for the taxable year as
determined under Subsection (a) above, plus (ii) so much of the Normal Limitation for
prior taxable years in which the Participant was eligible to participate under the Plan,
beginning after 1978, as has not been previously used for contributions under Subsection
(a) or this Subsection (b).
The Catch-Up Limitation is available to a Participant during one three-year period
only. If the Participant uses the Catch-Up Limitation and then postpones retirement or
returns to work after retirement, the Catch-Up Limitation shall not be available again.
The provisions of this Subsection (b) shall be interpreted and administered in accordance
with Regulations issued under Code Section 457 including, without limitation, special
rules concerning application of the coordination limits in effect under Code Section 457
(c)(2) prior to 2002 for purposes of determining the amounts referred to in Section
2.3(b)(ii) for years prior to 2002.
2.4 No Other Contributions.
No contributions other than as provided in Section 2.1 and Section 2.2 shall be
made to this Plan. This Plan shall not accept rollover contributions or transfers from
other plans.
2.5 Coordination With Other Plans.
If a Participant participates in more than one eligible deferred compensation plan
(as defined in Section 457(b) of the Code) other than a plan that is a qualified
governmental excess benefit arrangement (as defined in Section 415(m)(3) of the Code),
NB 1564577.3 7
55C-48
the maximum deferral under all such eligible deferred compensation plans shall not
exceed the Normal Limitation described in Section 2.3(a) (as modified by any adjustment
provided under Section 2.3(b)). The Employer shall distribute the amount of a
Participant's deferral in excess of the distribution limitations stated in Section 2.3,
together with allocable net income, as soon as administratively practicable after the Plan
determines that the amount is an excess deferral. For purposes of determining whether
there is an excess deferral under Section 2.3, all plans under which a Participant
participates as a result of his employment with the Employer shall be treated as a single
plan.
NB 1:5645773 8
55C-49
ARTICLE III
VESTING
3.1 Vesting.
Each Participant is one hundred percent (100%) vested in their respective
Accounts at all times.
NB 1:564577.3
55C-50
ARTICLE IV
DISTRIBUTIONS
4.1 Distribution of Benefits.
(a) Benefits shall become distributable to a Participant (or the Participant's
Beneficiary in case of the Participant's death) upon the Participant's Break in
Employment. The amount of the benefits distributable to a Participant shall be the vested
amount credited to such Participant's Account as of the most recent Valuation Date.
Notwithstanding any other provision of this Plan, all distributions shall be in the form of
a single cash lump sum paid as soon as administratively practicable after the date benefits
become distributable.
(b) In the event of the death of a Participant prior to distribution, distribution
of the Participant's vested Account shall be made to his or her Beneficiary in a cash lump
sum as soon as practicable after the Participant's death, but in no event later than the last
day of the calendar year following the calendar year in which the death occurs.
(c) This Plan is subject to the minimum distribution requirements contained in
Code Section 457(d)(2) and 401(a)(9) and the regulations thereunder. These
requirements are set forth in Appendix A of this Plan.
4.2 In Service Distributions
In accordance with Section 457(e)(9)(A), a Participant who is no longer eligible
to participate because he is no longer in the class of Eligible Employees, but who has not
terminated employment with the Employer, shall be eligible for a limited in-service
distribution if (i) the Participant's benefit is not more than five thousand dollars
($5,000.00), (ii) no amount has been deferred under this Plan for the Participant during
NB 1564577.3 10
55C-51
the two (2) year period ending on the date of the distribution, and (iii) there has been no
previous distribution to the Participant from this Plan under this Section 4.2.
4.3 Qualified Domestic Relations Order.
(a) Subject to procedures established by the Employer, benefits may be paid
from the balance of a Participant's Account in accordance with a Qualified Domestic
Relations Order. This Section 4.3 is included in the Plan to comply with Section 414(p)
of the Code, the regulations thereunder, and such regulations as the Secretary of the
Treasury may publish under Code Sections 414(p)(11) and 414(p)(12).
(b) Procedure.
(i) Upon receipt of a Qualified Domestic Relations Order, the
Employer will establish an Account for the benefit of the Alternate Payee
specified in such order. The Employer will then transfer balances in accordance
with the terms of such order from the Participant's Account to the Alternate
Payee's Account. The Alternate Payee's Account, except as otherwise provided
herein, will remain subject to all the rules of the Plan.
(ii) An Alternate Payee under a Qualified Domestic Relations Order
may designate the investment vehicles in which the balances in the Alternate
Payee's Account will be invested, limited to the investment alternatives provided
by the Plan.
(iii) An Alternate Payee under a Qualified Domestic Relations Order
may designate beneficiaries to receive any amount to which the Alternate Payee
may be entitled to receive in the event of death.
(iv) All amounts credited to an Alternate Payee's Account will be
payable to the Alternate Payee or the Alternate Payee's beneficiary in accordance
NB 1: 564577, 3 11
55C-52
with the terms of this Plan and the Qualified Domestic Relations Order. Such an
order may provide for payment to the Alternate Payee prior to the Participant's
Break in Employment.
4.4 Direct Rollovers.
(a) Availability. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this Plan, a distributee may elect,
at the time and in the manner prescribed by the Employer, to have any portion of an
Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by
the distributee in a Direct Rollover.
(b) Definitions. For purposes of this Section 4.4, the following terms shall
have the meanings set forth below.
(i) Eligible Rollover Distribution. An Eligible Rollover Distribution
is any distribution of all or any portion of the balance to the credit of the
distributee, except that an Eligible Rollover Distribution does not include: any
distribution that is one of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten years or more;
any distribution to the extent such distribution is required under Section 401(a)(9)
of the Code, any hardship distribution, and the portion of any distribution that is
not includible in gross income.
(ii) Eligible Retirement Plan. An Eligible Retirement Plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, a qualified
NB 1:5645773 12
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trust described in Section 401(a) of the Code, an annuity plan described in Section
403(a) of the Code, an eligible deferred compensation plan described in Section
457(b) of the Code which is maintained by an eligible employer described in
Section 457(e)(1)(A) of the Code, or an annuity contract described in Section
403(b) that accepts the distributee's Eligible Rollover Distribution. With respect
to Eligible Rollover Distributions made on or after January 1, 2008, "Eligible
Retirement Plan" shall also include a Roth IRA as described in Section 408A(b)
of the Code, provided that the distributee is not restricted from making such a
rollover from the Plan to a Roth IRA pursuant to Section 408A(c) of the Code.
A distributee includes an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the Alternate Payee under a
Qualified Domestic Relations Order, as defined in Section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former spouse. In addition,
a Beneficiary other than an individual described in the preceding sentence is a
distributee with regard to the interest of the Participant, subject to the limitation
that an Eligible Retirement Plan with respect to such distributee is an individual
retirement account or individual retirement annuity that will be treated as an
inherited individual retirement account or annuity under Section 402(c)(I 1) of the
Code.
(iii) Direct Rollover. A Direct Rollover is a payment by the Plan to the
Eligible Retirement Plan specified by the distributee.
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4.5 Purchase of Service Credit.
If a Participant is also a participant in a defined benefit governmental plan (as
defined in Code Section 414(d)), such Participant may request that the Employer transfer
amounts from his or her Account for (a) the purchase of permissive service credit (as
defined in Code Section 415(n)(3)(A)) under such plan, or (b) a repayment to which
Code Section 415 does not apply by reason of Code Section 415(k)(3). Such transfer
requests shall be granted in the sole discretion of the Employer, and if granted, shall be
made directly to the defined benefit governmental plan.
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ARTICLE V
ADMINISTRATION, AMENDMENT AND TERMINATION
5.1 Rules and Regulations.
The Employer has full discretionary authority to supervise and control the
operation of this Plan in accordance with its terms and may make rules and regulations
for the administration of this Plan that are not inconsistent with the terms and provisions
hereof. The Employer shall in its discretion determine any questions arising in
connection with the interpretation, application or administration of the Plan (including
any question of fact) and its decisions or actions in respect thereof shall be conclusive
and binding upon all persons and parties.
The Employer shall have all discretionary powers necessary to accomplish its
purposes, including, but not by way of limitation, the following:
(a) To determine all questions relating to an Employee's eligibility;
(b) To construe and interpret the terms and provisions of the Plan and to
determine any question of fact;
(c) To compute, certify to, and direct the Trustee with regard to the amount
and kind of benefits payable to the Participants and their Beneficiaries;
(d) To authorize all disbursements by the Trustee from the Trust;
(e) To maintain all records that may be necessary for the administration of the
Plan other than those maintained by the Trustee; and
(0 To appoint a plan administrator or any other agent, and to delegate to them
or to the Trustee such powers and duties in connection with the administration of the Plan
as it may from time to time prescribe, and to designate each such administrator or agent
as a fiduciary with regard to matters delegated to him.
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With respect to management and control of investments, the Employer shall have
the power to direct the Trustee in writing with respect to the investment of the Trust
assets or any part thereof.
Expenses and fees in connection with the administration of the Plan and the Trust
shall be paid from the Trust assets to the fullest extent permitted by law, unless the
Employer determines otherwise. In accordance with Section 53217 of the California
Government Code, the Employer may elect to make contributions to the Trust sufficient
to defray the expenses of administering the Plan or may pay such expenses directly.
5.2 Amendment and Termination.
The Employer shall have the right to amend, modify or terminate this Plan at any
time. The Employer shall not be liable for the payment of any benefits under this Plan
and all benefits hereunder shall be payable solely from the assets of the Trust.
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ARTICLE VI
MISCELLANEOUS
6.1 Participant's Right Not Subiect to Execution.
The right of a Participant to a benefit under this Plan is not assignable and is not
subject to execution or any other process whatsoever, except to the extent permitted by
the Code of Civil Procedure and the Family Code of the State of California. Any
payment hereunder required under the California Family Code to a person other than the
Participant must not alter the form or amount of benefits hereunder except to the extent
provided in a Qualified Domestic Relations Order (as defined in Code Section 414(p))
prior to the Participant's Break in Employment.
6.2 Investment.
All contributions, interest earned, and any assets of the Plan shall at all times be
invested and managed in accordance with the requirements of the California Government
Code.
6.3 Valuation.
The value of the Trust under the Plan shall be established periodically as
determined by the Employer in its discretion (but no less frequently than annually) and
investment gains and losses thereon shall be allocated to the Participants' Accounts.
Notwithstanding anything to the contrary herein, if the Employer determines that
Accounts should be valued on a more frequent basis or that an alternative method of
allocating earnings and losses would better serve the interests of the Participants or their
Beneficiaries or could more readily be implemented, the Employer may make such
changes; provided that any alternative method must result in Plan earnings being
allocated on the general basis of Account balances.
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6.4 Unclaimed Benefits.
Each Participant and Beneficiary of a deceased Participant shall file with the
Employer from time to time in writing, his or her home address and each change of home
address. Any communication addressed to the Participant or the Beneficiary at his or her
last home address filed with the Employer, or if no such address was filed, then at his or
her last home address as shown on the Employer's records, shall be binding on the
Participant or Beneficiary for all purposes of the Plan. The Employer shall not be
obligated to search for or ascertain the whereabouts of any Participant or Beneficiary, and
the Participant's Account balance shall be subject to the abandoned property law of the
applicable jurisdiction.
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ARTICLE VII
7.1 Definitions.
DEFINITIONS
"Account" means the account maintained by the Employer for each Participant
that is credited with the amounts provided herein.
"Alternate Payee" means any spouse, former spouse, child or other dependent of
a Participant who is recognized by a Domestic Relations Order (as defined under
"Qualified Domestic Relations Order" below) as having a right to receive all, or a portion
of, the benefits payable under this Plan with respect to such Participant.
"Amended Effective Date" means December 19, 2011.
"Applicable Dollar Amount" means the "applicable dollar amount" as defined
in Code Section 457(e)(15) (as adjusted from time-to-time as set forth in Code Section
457(e)(15)).
"Approved Absence" means a leave of absence (without pay) granted to an
Employee under the Employer's established leave policy.
"Beneficiary" means the person, persons, trust or trusts designated by a
Participant, or, in the absence of a designation, entitled by will or the laws of descent and
distribution, to receive the benefit specified under this Plan if the Participant dies and
means the Participant's executor or administrator if no other beneficiary is designated and
able to act under the circumstances.
"Break in Employment" means any termination of employment by reason of
resignation, discharge, retirement, disability, death, or other event constituting a
"severance from employment" as defined under Code Section 457(d)(1)(A)(ii).
NB 1:564577.3 19
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"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Compensation" means all compensation paid to a Participant that is attributable
to services performed for the Employer and is includible in the Participant's gross income
for the Plan Year. Notwithstanding the foregoing, Compensation shall have the meaning
of "includible compensation" as defined in Code Section 457(e).
"Effective Date" means January 1, 1992.
"Eligible Employee" means all of those Employees of the Employer whose
participation in this Plan is not prohibited or restricted by the provisions of a collective
bargaining agreement or another plan or retirement system maintained by the Employer.
Additionally, Employees who are exempt from coverage under Social Security by federal
law or regulation shall not be Eligible Employees.
"Employee" means an employee of the Employer.
"Employer" means the City of Santa Ana that has adopted this Plan.
"Normal Retirement Age" means the range of ages from 55 through and
including 70 1/2 as designated by the Participant. Any Participant who works beyond
age 70 1/2 may designate a Normal Retirement Age greater than 70 1/2; provided,
however that Normal Retirement Age may not be later than the date or age at which the
Participant terminates employment with the Employer.
"Participant" means a Participant under Article I hereof.
"Plan" means the City of Santa Ana Public Agency Retirement System 3121
Part-Time Social Security Alternative Retirement Plan.
"Plan Year" means the consecutive twelve-month period beginning on July
and ending on June 30.
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"Qualified Domestic Relations Order" means a Domestic Relations Order (as
defined herein) which (a) creates or recognizes the existence of an Alternate Payee's right
to, or assigns to an Alternate Payee the right to, receive all or a portion of the benefits
payable to a Participant under this Plan; (b) clearly specifies (i) the name and the last
known mailing address of the Participant and the name and mailing address of each
Alternate Payee covered by the order, (ii) the amount or percentage of the Participant's
benefits to be paid by this Plan to each such Alternate Payee, or the manner in which such
amount or percentage is to be determined, (iii) the number of payments or period to
which such order applies and (iv) that it applies to this Plan; and (c) does not (i) require
this Plan to provide any type or form of benefit, or any option, not otherwise provided
under the Plan, (ii) require this Plan to provide increased benefits (determined on the
basis of actuarial value), or (iii) require the payment of benefits to an Alternate Payee
which are required to be paid to another Alternate Payee under another order previously
determined to be a Qualified Domestic Relations Order. For purposes of this Plan, a
"Domestic Relations Order" means any judgment, decree, or order (including approval of
a property settlement agreement) which (a) relates to the provisions of child support,
alimony payments, or marital property rights to a spouse, former spouse, child, or other
dependent of a Participant and (b) is made pursuant to a State domestic relations law
(including a community property law).
"Retirement System" means any plan that meets the requirements for a
retirement system under Section 3121(b)(7)(F) of the Code and the final Regulations
thereunder.
"Social Security" means the Social Security program as set forth in Title 42 of
the United States Code, section 301 et sea.
NB 1:564577.3 21
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"Trust" means the trust established as part of the Public Agency Retirement
Trust to hold the assets of the Plan.
"Trustee" means the trustee of the Trust.
"Valuation Date" means the last day of the Plan Year or such other day on which
the assets of the Trust are valued and the value of each Participant's Account is
determined.
NB 1:564577.3 22
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ADOPTION OF
THE CITY OF SANTA ANA
PUBLIC AGENCY RETIREMENT SYSTEM
3121 PART-TIME SOCIAL SECURITY ALTERNATIVE RETIREMENT PLAN
The City of Santa Ana Public Agency Retirement System 3121 Part-Time Social
Security Alternative Retirement Plan is hereby adopted effective December 19, 2011.
BY:
TITLE: Executive Director of Finance & Manaeement Services
DATE:
55C-64
APPENDIX A
Minimum Distribution Requirements
A.1 General Rules.
(a) Effective Date. The provisions of this Appendix A will apply for purposes of
determining required minimum distributions for calendar years beginning with the
2003 calendar year.
(b) Precedence. The requirements of this Appendix A will take precedence over any
inconsistent provisions of the Plan provided that this Appendix A shall not be
considered to allow a Participant or Beneficiary to delay a distribution or elect an
optional form of benefit not otherwise provided in the Plan.
(c) Requirements of Treasury Regulations Incorporated. All distributions required
under this Appendix A will be determined and made in accordance wirh the
Treasury regulations under Section 401(a)(9) of the Internal Revenue Code.
A.2 Time and Manner of Distribution.
(a) Required Beginning Date. The Participant's entire interest will be distributed, or
begin to be distributed, to the Participant no later than the Participant's Required
Beginning Date.
(b) Death of Participant Before Distributions Begin. If the Participant dies before
distributions begin, the Participant's entire interest will be distributed, or begin to
be distributed, no later than as follows:
(1) If the Participant's surviving spouse is the Participant's sole Designated
Beneficiary, then, except as provided elsewhere in this Appendix A,
distributions to the surviving spouse will begin by December 31 of the
calendar year immediately following the calendar year in which the
Participant died, or by December 31 of the calendar year in which the
Participant would have attained age 70'/2, if later.
(2) If the Participant's surviving spouse is not the Participant's sole
Designated Beneficiary, then, except as provided elsewhere in this
Appendix A, distributions to the Designated Beneficiary will begin by
December 31 of the calendar year immediately following the calendar year
in which the Participant died.
(3) If there is no Designated Beneficiary as of September 30 of the year
following the year of the Participant's death, the Participant's entire
interest will be distributed by December 31 of the calendar year containing
the fifth anniversary of the Participant's death.
(4) If the Participant's surviving spouse is the Participant's sole Designated
Beneficiary and the surviving spouse dies after the Participant but before
NB 1564577.3 A-1
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distributions to the surviving spouse begin, this Section A.2(b), other than
Section A.2(b)(1), will apply as if the surviving spouse were the
Participant.
For purposes of this Section A.2(b) and Section A.4, unless Section A.2(b)(4)
applies, distributions are considered to begin on the Participant's Required
Beginning Date. If Section A.2(b)(4) applies, distributions are considered to
begin on the date distributions are required to begin to the surviving spouse under
Section A.2(b)(1).
(c) Forms of Distribution. Unless the Participant's interest is distributed in the form
of a single sum on or before the Required Beginning Date, as of the first
Distribution Calendar Year distributions will be made in accordance with Sections
A.3 and AA of this Appendix A.
A.3 Required Minimum Distributions During Participant's Lifetime.
(a) Amount of Required Minimum Distribution For Each Distribution Calendar Year.
During the Participant's lifetime, the minimum amount that will be distributed for
each Distribution Calendar Year is the lesser of:
(1) the quotient obtained by dividing the Participant's Account Balance by the
distribution period in the Uniform Lifetime Table set forth in Section
1.401(a)(9)-9 of the Treasury regulations, using the Participant's agc as of
the Participant's birthday in the Distribution Calendar Year; or
(2) if the Participant's sole Designated Beneficiary for the Distribution
Calendar Year is the Participant's spouse, the quotient obtained by
dividing the Participant's Account Balance by the number in the Joint and
Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury
regulations, using the Participant's and spouse's attained ages as of the
Participant's and spouse's birthdays in the Distribution Calendar Year.
(b) Lifetime Required Minimum Distributions Continue Throuah Year of
Participant's Death. Required minimum distributions will be determined under
this Section A.3 beginning with the first Distribution Calendar Year and up to and
including the Distribution Calendar Year that includes the Participant's date of
death.
AA Required Minimum Distributions After Participant's Death.
(a) Death On or After Date Distributions Beain.
(1) Participant Survived by Designated Beneficiary. If the Participant dies on
or after the date distributions begin and there is a Designated Beneficiary,
the minimum amount that will be distributed for each Distribution
Calendar Year after the year of the Participant's death is the quotient
obtained by dividing the Participant's Account Balance by the longer of
the remaining Life Expectancy of the Participant or the remaining Life
N131 564577.3 A-2
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Expectancy of the Participant's Designated Beneficiary, determined as
follows:
(A) The Participant's remaining Life Expectancy is calculated using
the age of the Participant in the year of death, reduced by one for
each subsequent year.
(B) If the Participant's surviving spouse is the Participant's sole
Designated Beneficiary, the remaining Life Expectancy of the
surviving spouse is calculated for each Distribution Calendar Year
after the year of the Participant's death using the surviving
spouse's age as of the spouse's birthday in that year. For
Distribution Calendar Years after the year of the surviving
spouse's death, the remaining Life Expectancy of the surviving
spouse is calculated using the age of the surviving spouse as of the
spouse's birthday in the calendar year of the spouse's death,
reduced by one for each subsequent calendar year.
(C) If the Participant's surviving spouse is not the Participant's sole
Designated Beneficiary, the Designated Beneficiary's remaining
Life Expectancy is calculated using the age of the beneficiary in
the year following the year of the Participant's death, reduced by
one for each subsequent year.
(2) No Designated Beneficial. If the Participant dies on or after the date
distributions begin and there is no Designated Beneficiary as of September
30 of the year after the year of the Participant's death, the minimum
amount that will be distributed for each Distribution Calendar Year after
the year of the Participant's death is the quotient obtained by dividing the
Participant's Account Balance by the Participant's remaining Life
Expectancy calculated using the age of the Participant in the year of death,
reduced by one for each subsequent year.
(b) Death Before Date Distributions Begin.
(1) Participant Survived b Designated Beneficiary. Except as prcvided
elsewhere in this Appendix A, if the Participant dies before the date
distributions begin and there is a Designated Beneficiary, the minimum
amount that will be distributed for each Distribution Calendar Year after
the year of the Participant's death is the quotient obtained by dividing the
Participant's Account Balance by the remaining Life Expectancy of the
Participant's Designated Beneficiary, determined as provided in Section
AA(a).
(2) No Designated Beneficiary. If the Participant dies before the date
distributions begin and there is no Designated Beneficiary as of September
30 of the year following the year of the Participant's death, distribution of
the Participant's entire interest will be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death.
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(3) Death of Surviving Spouse Before Distributions to Surviving Spouse Are
Required to Begin. If the Participant dies before the date distributions
begin, the Participant's surviving spouse is the Participant's sole
Designated Beneficiary, and the surviving spouse dies before distributions
are required to begin to the surviving spouse under Section A.2(b)(1), this
Section AA(b) will apply as if the surviving spouse were the Participant.
A.5 Definitions. For purposes of this Appendix A, the following terms shall have the
meanings set forth below:
(a) Designated Beneficiary. The individual who is designated as the beneficiary
under Section 1.5 of the Plan is the designated beneficiary under Section
401(a)(9) of the Internal Revenue Code and Section 1.401(a)(9)-1, Q&A-4, of the
Treasury regulations.
(b) Distribution Calendar Year. A calendar year for which a minimum distribution is
required. For distributions beginning before the Participant's death, the first
distribution calendar year is the calendar year immediately preceding the calendar
year which contains the Participant's Required Beginning Date. For distributions
beginning after the Participant's death, the first distribution calendar year is the
calendar year in which distributions are required to begin under Section A.2(b)
The required minimum distribution for the participant's first distribution calendar
year will be made on or before the Participant's Required Beginning Date. The
required minimum distribution for other distribution calendar years, including the
required minimum distribution for the distribution calendar year in which the
Participant's Required Beginning Date occurs, will be made on or before
December 31 of that distribution calendar year.
(c) Life Expectancy. Life expectancy as computed by use of the Single Life Table in
Section 1.401(a)(9)-9 of the Treasury regulations.
(d) Participant's Account Balance. The account balance as of the last valuation date
in the calendar year immediately preceding the Distribution Calendar Year
(valuation calendar year) increased by the amount of any contributions made and
allocated or forfeitures allocated to the account balance as of dates in the
valuation calendar year after the valuation date and decreased by distributions
made in the valuation calendar year after the valuation date. The account balance
for the valuation calendar year includes any amounts rolled over or transferred to
the Plan either in the valuation calendar year or in the distribution calendar year if
distributed or transferred in the valuation calendar year.
(e) Required Beginning Date. The Required Beginning Date means April 1 of the
calendar year following the later of (a) the calendar year in which the Parti,:ipant
attains age seventy and a half (70 '/2), or (b) the calendar year in which the
Employee has a Break in Employment.
NB 1:564577.3 A-4
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A.6 Effective Date of Plan Amendment for Section 401(a)(9) Final and
Temporary Treasury Regulations.
Appendix A applies for purposes of determining required minimum distributions for
Distribution Calendar Years beginning with the 2003 calendar year.
NB 1:564577.3 A_5
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TABLE OF CONTENTS
Page
Introduction ........................................................................................................... 1
Article I Participation ........................................................................................................2
1.1 Eligibility for Benefits ................................................................................ 2
1.2 Participation ................................................................................................2
1.3 Reemployment as an Eligible Employee .................................................... 2
1.4 Qualified Military Service ..........................................................................2
1.5 Designation of Beneficiary ......................................................................... 3
Article II Contributions ..................................................................................................... 6
2.1 Employer Contributions ............................................................................. 6
2.2 Employee Contributions ............................................................................. 6
2.3 Limitations on Contributions ...................................................................... 6
2.4 No Other Contributions .............................................................................. 7
2.5 Coordination With Other Plans .................................................................. 7
Article III Vesting .............................................................................................................9
3.1 Vesting ........................................................................................................9
Article IV Distributions .................................................................................................. 10
4.1 Distribution of Benefits ............................................................................ 10
4.2 In Service Distributions ........................................................................... 10
4.3 Qualified Domestic Relations Order ........................................................ 11
4.4 Direct Rollovers ....................................................................................... 12
4.5 Purchase of Service Credit ....................................................................... 14
Article V Administration, Amendment And Termination .............................................. 15
5.1 Rules and Regulations .............................................................................. 15
5.2 Amendment and Termination ................................................................... 16
Article VI Miscellaneous ................................................................................................ 17
6.1 Participant's Right Not Subject to Execution ........................................... 17
6.2 Investment ................................................................................................ 17
6.3 Valuation .................................................................................................. 17
N131:564577.3
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TABLE OF CONTENTS
(continued)
Page
6.4 Unclaimed Benefits .................................................................................. 18
Article VII Definitions .................................................................................................... 19
7.1 Definitions ................................................................................................ 19
Appendix A Minimum Distribution Requirements ......................................................A-1
NB 1:564577.3 -ii-
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An extra section break has been inserted above this paragraph. Do not delete this section
break if you plan to add text after the Table of Contents/Authorities. Deleting this break
will cause Table of Contents/Authorities headers and footers to appear on any pages
following the Table of Contents/Authorities.
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