Loading...
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) 169134.v4 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 I 169134.v4 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 ii 169134.v4 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. 1 169134A 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 2 169134.v4 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 3 169134A 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 C! 169134.v4 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. 5 169134A 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. 31 169134.0