HomeMy WebLinkAbout092-2017RESOLUTION NO. 92-2017
APPROVING THE TOWN OF DANVILLE SECTION 415(m)
BENEFIT RESTORATION PLAN
WHEREAS, the Town of Danville provides its employee a defined contribution
retirement plan (the "Town of Danville Money Purchase Pension Plan"), which is tax -
qualified under Code Section 401(a); and
WHEREAS, Section 415(c) of the Internal Revenue Code (the "Code") places limits on
the amount of retirement benefits that can be paid to retirees under a defined contribution
retirement plan that is tax -qualified under Code Section 401(a); and
WHEREAS, for certain employees of the Town the amount of retirement benefits paid
from the Money Purchase Plan is limited by application of Code Section 415(c); and
WHEREAS, the Town established a qualified governmental excess benefit arrangement
(also known as a "Section 415(m) Plan") for the Town Manager and City Attorney,
pursuant to their respective employment contracts with the Town, effective January 1,
2008; and
WHEREAS, the Town has decided to memorialize the qualified governmental excess
benefit arrangement and to set aside such excess benefit amounts for payment under the
Section 415(m) Plan; now, therefore, be it
RESOLVED, by the Danville Town Council that The Town of Danville Section 415(m)
Benefit Restoration Plan (the "Plan") is approved in substantially the form attached
hereto.
APPROVED by the Danville Town Council at a regular meeting on November 21, 2017
by the following vote:
AYES:
NOTES:
ABSTAINED:
ABSENT:
Arnerich, Blackwell, Morgan, Stepper, Storer
None
None
None
APPROVED AS TO FORM:
CITY ATTORNEY
169469.v2
CITY CLE
APPROVING THE TOWN OF DANVILLE SECTION 415(m)
BENEFIT RESTORATION PLAN
WHEREAS, the Town of Danville provides its employee a defined contribution
retirement plan (the "Town of Danville Money Purchase Pension Plan'), which is tax -
qualified under Code Section 401(a); and
WHEREAS, Section 415(c) of the Internal Revenue Code (the "Code") places limits on
the amount of retirement benefits that can be paid to retirees under a defined contribution
retirement plan that is tax -qualified under Code Section 401(a); and
WHEREAS, for certain employees of the Town the amount of retirement benefits paid
from the Money Purchase Plan is limited by application of Code Section 415(c); and
WHEREAS, the Town established a qualified governmental excess benefit arrangement
(also known as a "Section 415(m) Plan') for the Town Manager and City Attorney,
pursuant to their respective employment contracts with the Town, effective January 1,
2008; and
WHEREAS, the Town has decided to memorialize the qualified governmental excess
benefit arrangement and to set aside such excess benefit amounts for payment under the
Section 415(m) Plan; now, therefore, be it
RESOLVED, by the Danville Town Council that The Town of Danville Section 415(m)
Benefit Restoration Plan (the "Plan') is approved in substantially the form attached
hereto.
AYES:
NOTES:
ABSTAINED:
ABSENT:
Arnerich, Blackwell, Morgan, Stepper, Storer
None
None
IZrem
APPROVED AS TO FORM:
CITY ATTORNEY
169469.v2
ATTEST:
CITY CL
0
THE TOWN OF DANVILLE
SECTION 415(m) BENEFIT RESTORATION PLAN
(Effective as of January 1, 2008)
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TABLE OF CONTENTS
ARTICLE1 Establishment and Purpose....................................................................................1
Section1.1 -Establishment ....................................................................................................... l
Section1.2 - Purpose................................................................................................................1
Section1.3 - Tax Status............................................................................................................1
ARTICLE2 Definitions................................................................................................................1
Section 2.1 - Beneficiary...........................................................................................................1
Section2.2 - Code.....................................................................................................................1
Section2.3 - Effective Date......................................................................................................1
Section2.4 - Employee.............................................................................................................1
Section2.5 - Employer..............................................................................................................2
Section 2.6 - Employer Contributions.......................................................................................2
Section2.7 - Participant............................................................................................................2
Section2.8 - Plan......................................................................................................................2
Section 2.9 - Plan Administrator...............................................................................................2
Section2.10 - Plan Year..........................................................................................................2
ARTICLE3 Eligibility..................................................................................................................2
Section3.1 - Eligibility .............................................................................................................2
Section3.2 - Participation .........................................................................................................2
ARTICLE4 Benefits.....................................................................................................................2
Section 4.1 - Amount of Benefits...............................................................................................2
Section 4.2 - Form of Benefit Payments...................................................................................3
Section 4.3 - Time of Benefit Payments ...................................................................................3
Section 4.4 - Beneficiary in the Event of Death........................................................................3
Section4.5 - Benefits Unfunded...............................................................................................3
Section4.6 - Vesting.................................................................................................................3
Section4.7 - Taxes....................................................................................................................3
ARTICLE5 Administration.........................................................................................................3
Section 5.1 - Duties of the Administrator................................................................................. 3
Section 5.2 - Finality of Decisions............................................................................................4
Section 5.3 - Claims Procedure.................................................................................................4
Section 5.4 - Correction of Errors.............................................................................................4
ARTICLE6 Amendment and Termination................................................................................5
Section 6.1 - Amendment and Termination..............................................................................5
ARTICLE7 Miscellaneous...........................................................................................................5
Section 7.1 - No Employee Deferrals.......................................................................................5
Section 7.2 - No Use of Money Purchase Plan Assets..............................................................5
Section 7.3 - No Employment Rights.......................................................................................5
Section 7.4 - Unsecured Creditor..............................................................................................5
Section7.5 - Non -Assignability .................................................................................................5
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Section7.6 — Withholding Taxes...............................................................................................6
Section 7.7 — Invalidity of Certain Provisions...........................................................................6
Section7.8 — lncapacity.............................................................................................................6
Section7.9 — Law Applicable ....................................................................................................6
Section 7.10 — Preservation of Retirement Plan Tax Status......................................................6
Section 7.11 — Preservation of Section 415(m) Status..............................................................6
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THE TOWN OF DANVILLE
SECTION 415(m) BENEFIT RESTORATION PLAN
ARTICLE 1
Establishment and Purpose
Section 1.1 — Establishment. The Town of Danville hereby establishes and adopts a retirement
plan entitled "The Town of Danville Section 415(m) Benefit Restoration Plan" (the "Plan")
effective as of January 1, 2008 (the "Effective Date").
Section 1.2 — Purpose. The purpose of the Plan is to provide supplemental retirement benefits to
Employees of The Town of Danville (and such Employees' Beneficiaries) who are members of
The Town of Danville Money Purchase Pension Plan (the "Money Purchase Plan"), but whose
benefits are limited because of application of Section 415 of the Internal Revenue Code of 1986,
as amended (the "Code") and the provisions of the Money Purchase Plan which implement such
section.
Section 1.3 — Tax Status. The Plan is intended to be a "qualified governmental excess benefit
arrangement" under Code Section 415(m). As. such, this Plan is intended to be exempt from
application of Codes Section 409A and 457(f). This Plan shall be deemed a portion of the
Money Purchase Plan solely to the extent required by, and within the meaning of, Section
415(m)(3) of the Code, and not for any other purpose. It is also intended that this Plan be treated
as an "exempt governmental deferred compensation plan" as described in Code Section
3121(v)(3), and that payments are, therefore, not included as wages subject to Social Security
and Medicare taxes. The provisions of the Plan shall be construed and interpreted as necessary
to comply with the purpose and intended tax status as set forth in this Article 1 of the Plan.
ARTICLE 2
Definitions
The capitalized words and phrases used in this Plan shall have the meanings set forth below:
Section 2.1 — Beneficiary. The person or persons named under the provisions of Section 4.4 of
this Plan.
Section 2.2 — Code. The Internal Revenue Code of 1986, as amended, or as it may be amended
from time to time, and any rules and regulations issued thereunder.
Section 2.3 — Effective Date. January 1, 2008.
Section 2.4 — Employee. Any person who provides services to the Employer and who is a
participant of the Money Purchase Plan.
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Section 2.5 — Employer. The Town of Danville or any successor to such Employer which adopts
the Money Purchase Plan.
Section 2.6 — Employer Contributions. Contributions made by the Employer under Section 3.01
of the Money Purchase Plan.
Section 2.7 — Participant. An Employee who participates in the Plan pursuant to Section 3.2 of
the Plan.
Section 2.8 — Plan. The Town of Danville Section 415(m) Benefit Restoration Plan, as may be
amended from time to time.
Section 2.9 — Plan Administrator. The Town Council of the Town of Danville.
Section 2.10 — Plan Year. A calendar year.
Any word or phrase that is not a defined term in this section, which is a defined word or term in
Money Purchase Plan and is used in this Plan, shall have the same meaning as the Plan in which
it appears.
ARTICLE 3
Eligibility
Section 3.1 — Eli ig bility. Any Employee or his Beneficiary shall be eligible for coverage under
this Plan if such Employee was not able to receive his or her entire contributions to the Money
Purchase Plan because of the application of Code Section 415 and has been designated by the
Employer, in its sole discretion, as eligible for the Plan. No one other than a person described in
this Article shall receive any benefits under this Plan, except as required by qualified domestic
relations orders or applicable law.
Section 3.2 — Participation. An eligible Employee shall commence participation in the Plan on
the first date, on or after the Effective Date, when the amount of benefits paid under the Money
Purchase Plan is limited because of application of Code Section 415, as determined below in
Section 4.1. Participation in this Plan shall cease as of the first date for which contributions are
no longer limited by Code Section 415, or when the Participant's benefits under the Money
Purchase Plan otherwise cease. If any Participant has ceased participating in the Plan, but at a
later date his or her Money Purchase Plan benefits are again limited by Code Section 415, he or
she shall again commence participation as provided in this Section 3.2.
ARTICLE 4
Benefits
Section 4.1 — Amount of Benefits. The benefit payable under this Plan shall be equal to the total
Employer Contributions which would have been allocated on behalf of the eligible Employee
under the Money Purchase Plan for each Plan Year without regard to the limits under Code
Section 415, reduced by the actual amount of Employer Contributions that were allocated on
behalf of the eligible Employee for each Plan Year taking into account the limits of Code Section
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415, adjusted to take into account investment income and gain or losses as determined by the
Plan Administrator. The Plan Administrator shall establish a notional account for each eligible
Employee and contribute the excess amount described above at such time and in such manner as
it so determines. The notional account shall be invested in such manner as the Plan
Administrator determines, including investing in the investment options available under the
Money Purchase Plan as directed by the eligible Employee. Earnings, gains, losses and expenses
shall be allocated to the eligible Employee's notional account at such time and in such manner as
determined by the Plan Administrator.
Section 4.2 — Form of Benefit Payments. Benefits payable to or on behalf of an Employee or his
Beneficiary resulting from the provisions of subsection 4.1 shall be paid in cash in a single lump
sum or a series of substantially equal installments. A Participant may make an election as to the
form of his or her distribution under the Plan at any time prior to the date distribution of the
Participant's benefits is scheduled to commence in accordance with procedures determined by
the Plan Administrator in its discretion. If a Participant has failed to elect a form of distribution,
distribution shall be made in the form of a single lump sum.
Section 4.3 — Time of Benefit Pam. Benefits due under this Plan shall be paid at such time
or times following the Employee's termination, retirement or death as the Plan Administrator in
its discretion determines.
Section 4.4 — Beneficiary in the Event of Death. Upon the death of a Participant, any remaining
benefit payments due under this Plan shall be distributed to (1) the Beneficiary designated by the
Employee under this Plan, or if none, (2) the Beneficiary designated by the Employee under the
Money Purchase Plan, or if none, (3) the estate of the deceased Participant. The designation of
Beneficiary under this Plan shall be made on a form specified by the Employer (or if applicable,
the Money Purchase Plan) and may be changed from time to time in the manner prescribed by
the Employer.
Section 4.5 — Benefits Unfunded. Benefits payable under this Plan shall be paid by the Employer
each year out of its general assets and shall not be funded in any manner. The Employer shall
also pay all costs, charges and expenses relating to establishing and maintaining this Plan.
Section 4.6 — Vesting. An Employee shall be 100% vested in the benefit under this Plan at all
times.
Section 4.7 — Taxes. The Employer shall have full authority to withhold any and all taxes that
are or may be due from all amounts paid under the Plan (including but not limited to income and
payroll taxes), to pay them to the appropriate government agency, and to file and distribute
necessary or appropriate tax reports and forms.
ARTICLE 5
Administration
Section 5.1 — Duties of the Administrator. This Plan shall be administered by the Plan
Administrator in accordance with the Plan's terms and purposes. The Plan Administrator shall
determine the amount and manner of payments of the benefits due to or on behalf of each
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Participant and/or his Beneficiary from this Plan and shall cause them to be paid accordingly.
The Plan Administrator has full discretionary authority to administer the Plan on a day-to-day
basis. The Plan Administrator may designate other persons to assist in performing such
administrative duties, including, but not limited to, agents, accountants, counsel, consultants and
record keepers.
Section 5.2 — Finality of Decisions. The decisions made by and the actions taken by the Plan
Administrator in the administration of this Plan shall be final and conclusive on all persons, and
such person shall not be subject to individual liability with respect to this Plan.
Section 5.3 — Claims Procedure. A claim for benefits under the Plan must be made to the Plan
Administrator in writing. The Plan Administrator shall provide adequate notice in writing within
ninety (90) days of the receipt of the claim for benefits to any Participant or Beneficiary whose
claim for benefits under the Plan has been denied, setting forth the specific reasons for such
denial, written in as simple language as possible. If a claim is denied, in whole or in part, the
Plan Administrator shall send the claimant a notice of denial explaining the reasons for denial of
the claim. A claimant whose claim has been denied, or his authorized representative, may
request a review of the denial, but such a request must be in writing, and must be submitted to
the Plan Administrator within sixty (60) days after the claimant's receipt of the notice of denial.
Upon appeal for review by a claimant whose claim for benefits from the Plan has been denied in
whole or in part, the claimant shall be given an opportunity to review the Plan document with a
representative of the Plan Administrator and shall further be given the opportunity to submit in
writing any statement or comments material or relevant to the claim.
The review of a claim which has been denied shall be made by the Plan Administrator within
sixty (60) days of the receipt of the request for review, unless the Plan Administrator determines
that special circumstances required additional time, in which case a decision shall be rendered
not later than one hundred twenty (120) days after receipt of the request for review. The decision
of the review shall be in writing and shall include specific reasons for the decision, written in as
simple language as possible with specific reference to the pertinent Plan provisions on which the
decision is based.
No action at law or equity will be brought to recover benefits under the Plan unless such action is
commenced within one (1) year after the date the claimant is notified of the Plan Administrator's
final decision on review. Except as required by applicable law, no action at law or equity shall
be brought to recover benefits under this Plan unless and until the claimant has: (a) submitted a
claim for benefits; (b) been notified in writing by the Plan Administrator that the requested
benefits (or portion thereof) are denied; (c) filed a written request for a review of the Plan
Administrator denial; and (d) been notified in writing that the denial has been affirmed.
Section 5.4 — Correction of Errors. If an error or omission is discovered in the administration of
the Plan, the Plan Administrator, or its authorized designee, shall take such equitable action as
may be necessary or appropriate to correct the error consistent with guidance from the Internal
Revenue Service. Any overpayment of benefits from this Plan shall be returned to the Employer
immediately on demand by the Plan Administrator. The Plan Administrator may take all
necessary or appropriate action, including but not limited to filing suit, to recover overpayments
of benefits under the Plan. Overpayments may be set off against subsequent benefit payments
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owed under the Plan. Additionally, any person who receives or holds any overpayments shall
hold such amounts in trust for the benefit of the Employer.
ARTICLE 6
Amendment and Termination
Section 6.1 — Amendment and Termination. While the Employer intends to maintain this Plan in
conjunction with the Money Purchase Plan for as long as necessary, the Employer reserves the
right to amend and/or terminate it at any time for whatever reasons it may deem appropriate by
action of the Plan Administrator.
ARTICLE 7
Miscellaneous
Section 7.1 — No Employee Deferrals. No employee contributions or deferrals shall be made or
allowed under the Plan at any time. In accordance with Section 415(m), no election to defer
compensation under this Plan shall be provided, at any time or in any manner, to any person.
Section 7.2 — No Use of Money Purchase Plan Assets. Except as specifically allowed by
governing federal and state law (including but not limited to governing federal and state tax
laws), Employer assets used to provide benefits under this Plan shall not be commingled with the
monies of the Money Purchase Plan or any other qualified plans, nor shall this Plan ever receive
or use any assets from the Money Purchase Plan.
Section 7.3 — No Employment Rights. Nothing contained in this Plan shall be construed as a
contract of employment between the Employer and any Employee, or as a right of any Employee
to be continued in employment or as a limitation of the right of the Employer to discharge any
Employee with or without cause.
Section 7.4 — Unsecured Creditor. Employees and their Beneficiaries, heirs and successors under
this Plan shall have solely those rights of an unsecured creditor of the Employer. Any and all
assets of the Employer shall not be deemed to be held in trust for any Employee, their
Beneficiaries, heirs and successors, nor shall any assets be considered security for the
performance of obligations of the Employer and said assets shall at all times remain unpledged,
unrestricted general assets of the Employer. The Employer's obligation under the Plan shall be
an unsecured and unfunded promise to pay benefits at a future date.
Section 7.5 — Non -Assignability. The Participant and their Beneficiaries, heirs and successors
shall not have any right to commute, sell, pledge, assign, transfer or otherwise convey the right to
receive any payment under this Plan. The right to any payment of benefit shall be non -
assignable and non -transferable. This Section 7.5 shall not apply to any benefit payable to an
alternate payee pursuant to an order determined by the Plan Administrator to be a qualified
domestic relations order under applicable law.
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Section 7.6 — Withholding Taxes. The Employer may take any appropriate arrangements to
deduct from all amounts paid under the Plan any taxes required to be withheld by any
government or governmental agency.
Section 7.7 — Invalidity of Certain Provisions. If any provision of this Plan is held invalid or
unenforceable, such invalidity or unenforceabilility shall not affect any other. provision hereof
and this Plan shall be construed and enforced as if such provision had not been included.
Section 7.8 — Incapacity. In the event that any Participant is unable to care for his affairs because
of illness or accident, any payment due may be paid to the Participant's spouse, parent, brother,
sister or other person deemed by the Plan Administrator to have incurred expenses for the care of
such Participant, unless a duly qualified guardian or other legal representative has been
appointed.
Section 7.9 — Law Applicable. This Plan shall be governed by the laws of the State of California
and applicable federal law.
Section 7.10 — Preservation of Retirement Plan Tax Status. This Plan shall not in any way
jeopardize the tax qualified status of the Money Purchase Plan. To maintain this qualified status,
the Plan Administrator shall have the authority to take all necessary or appropriate action,
including but not limited to amending this Plan and the rules governing this Plan, solely for the
purpose of complying with applicable federal tax laws and regulations. The Plan Administrator
shall inform the Employer of any such changes as soon as possible.
Section 7.11 — Preservation of Section 415(m) Status. The Plan Administrator shall have the
authority to make appropriate amendments to the Plan in order to accommodate changes in the
Internal Revenue Code and United States Treasury Regulations in a manner that will preserve the
status of the Plan under Section 415(m) of the Code; provided such amendment does not
materially increase the cost to the Court of benefits paid under the Plan. The Plan Administrator
shall also have the authority to make appropriate amendments to the Plan in order to comply with
changes in California State law, to the extent applicable; provided such amendment does not
materially increase the cost to the Employer of benefits paid under the Plan. The Plan
Administrator shall inform the Employer of any such changes as soon as possible.
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