HomeMy WebLinkAbout090-98 RESOLUTION NO. 90-98
AMENDING SECTION 8.10 OF THE TOWN OF DANVILLE
MONEY PURCHASE PENSION PLAN AND TRUST AGREEMENT
WHEREAS, on July 1, 1984, the Town of Danville first established a Defined Contribution
Money Purchase Pension Plan (the Plan) to provide retirement benefits for Town employees, in
accordance with Internal Revenue Code section 401 (a); and
WHEREAS, on June 17, 1997, the Town Council approved modification to the Plan to update
and clarify language in the Plan, and to bring the Plan in compliance with existing policies and
procedures; and
WHEREAS, to minimize the administrative burden of managing the Plan, the Town currently
enforces Section 8, 10 of the Plan, requiring terminated employees with a present value of $3,500
or less at the time of his or her termination of employment to cash out of the Plan; and
WHEREAS, the Taxpayer Relief Act of 1997, passed by Congress on August 5, 1997, changed
the distribution threshold for the cash-out of plan assets for former employees from $3,500 to
$5,000; and
WHEREAS, staff recommends that Section 8.10 of the Plan be modified to take advantage of
the higher cash out level of $5,000, further reducing the administrative burden of managing the
Plan; and
WHEREAS, the proposed change does not affect the Town's financial obligations; now,
therefore, be it
RESOLVED, that the Danville Town Council approve amendment of Section 8.10 of the Town
of Danville Defined Contribution Money Purchase Pension Plan to read as follows:
"SECTION 8.10 Involuntary Cash Outs. Notwithstanding any other provision of
this Article, if the present value of a participant's entire nonforfeitable interest in
his or her account at the time of his or her termination of employment does not
exceed $37500 $5,000, the Plan Administrator shall direct the trustee to distribute
such benefit to the participant or his or her designated beneficiary in a lump sum."
APPROVED by the Danville Town Council at a regular meeting held on June 16, 1998, by the
following vote:
AYES: Waldo,
NOES: None
ABSTAINED: None
ABSENT: None
Arnerich, Doyle, Greenberg, Shimansky
MAYOR
TO FORM:
CITY ATTORNEY
CITY CLERK
PAGE 2 OF RESOLUTION NO. 90-98