HomeMy WebLinkAbout2002 12 16 Regular C Resolution 2002-39 Amending the City of Winter Springs Retirement Plan
COMMISSION AGENDA
ITEM C
ICONSENT
INFORMATIONAL
PUBLIC HEARING
REGULAR X
,/
necemher 9,2002
Meeting
MGR (l/ /DEPT..... ~
A lIthorization
REQUEST: The Pension Board of Trustees is Requesting the City Commission Approve
Resolution 2002-39 Merging the Money Purchase Plan into the Defined Benefit Plan and
Amending the Defined Benefit Plan.
PURPOSE: To Approve Resolution 2002-39 Amending the City of Winter Springs
Retirement Plan.
CONSIDERATIONS:
. Prior to 10/1/2000, the employees participated in both a defined contribution and a defined
benefit plan.
. During 2000, the employees voted to merge the defined contribution plan into the defined
benefit plan and increase their contribution from 2% to 3% effective 10/1/2000.
. Attached are the documents that reflect this change as well as other minor revisions as
detailed in the Summary of Retirement Plan Changes.
RECOMMENDATION:
Approve Resolution 2002-39 amending the City of Winter Springs Retirement Plan.
ATTACHMENTS:
. Summary of Retirement Plan Changes
. Resolution 2002-39
. Defined Benefit Plan and Trust for Employees of the City of Winter Springs
. Pension Board of Trustee's Draft Meeting Minutes 11/27/02
· Actuarial Impact Statement dated 7/11/00
· Actuarial Impact Statement dated 2/28/00
COMMISSION ACTION:
'\'i' ..;;-..
CITY OF WINTER SPRINGS
SUMMARY OF RETIREMENT PLAN CHANGES
11/21/02
1. Plan Merger (Effective 10/1/00)
A. Money Purchase Plan merged into Defined Benefit Plan.
B. Money Puchase Plan abolished.
C. Participant accounts and all other assets of the Money Purchase
Plan transferred to the Defined Benefit Plan. Particpant
accounts will be available for distribution to the employee upon
retirement. Participant accounts earn interest interest at a rate
equal to the rate on 3D-year treasury securities as published by
the IRS.
2. Excluded Employees - excluded employees include those whose
customary weekly employment is less than 29 hours, and those who
participate in another qualified plan maintained by the City (other than
the Money Purchase Pension Plan). A Plan Participant who becomes
an excluded employee does not accrue benefits attributable to the
period he is excluded, but will receive credit for vesting. An excluded
employee who is not a Plan Participant but becomes eligible will
become a Participant immediately upon satisfaction of eligibility
conditions, and years of service during the period the employee was
excluded will be credited for vesting.
3. City Contributions - the City makes such contributions as are
required to fund the plan on a sound actuarial basis, in accord with
state law.
4. Employee Contributions - employees contribute 3% of
compensation to the retirement plan. Employee contributions are
"picked up" by the City (i.e., they are deducted from the employee's
pay and paid to the retirement plan in pre-tax dollars).
5. Benefit Formula - for service prior to 10/1/00, 2% of average
compensation multiplied by years of service. For service on and after
10/1/00, 3% of average compensation multiplied by years of service.
Limited to 30 years of service.
6. Lump Sum Payments - lump sum payments, which are permitted
under certain circumstances, are limited to $3,500.
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7. Year of Accrual Service - amended to provide for the purchase of
prior service with a federal, state or local government agency,
provided the employee pays the full actuarial cost of such service and
will not receive a benefit for such service under another pension plan.
Also allows any employee who has prior service with the City but did
not make contributions to the Money Purchase Plan or the Defined
Benefit Plan to obtain credited service under the Defined Benefit Plan
by paying the required participant contributions due under both plans
for such service.
8. Floor-Offset Arrangement - repealed (this is the prOVIsion that
reduced a member's benefit under the defined benefit plan by the
value of the benefit accrued under the money purchase plan; since the
money purchase plan has been abolished, this provision is no longer
needed).
9. 1000/0 Vesting of Employee Contributions - employee
contributions to the defined benefit plan are 100% vested. Employees
are entitled to receive a refund of their pre October 1, 2000 employee
contributions while a participant under the Money Purchase Pension
Plan, plus interest at a rate equal to the rate on 3D-year treasury
securities as published by the IRS, upon termination of employment.
Employee contributions to the defined benefit plan on and after
October 1, 2000 are 100% vested and shall be included in the vested
accrued benefit payable to the participant upon normal retirement.
10. Rollover of Distributions -- the plan is amended to permit eligible
rollover distributions to be paid directly to an eligible rollover
retirement plan. The plan is also amended to provide for acceptance
of rollover of an eligible distribution from a qualified plan.
11. Miscellaneous - the plan is amended to incorporate various technical
amendments suggested by the City's former counsel.
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11121/02
RESOLUTION NO. 2002-39
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
WINTER SPRINGS, FLORIDA, MERGING THE MONEY PURCHASE
PENSION PLAN AND TRUST FOR EMPLOYEES OF THE CITY OF
WINTER SPRINGS INTO THE DEFINED BENEFIT PLAN AND TRUST
FOR EMPLOYEES OF THE CITY OF WINTER SPRINGS; AMENDING
THE WITNESSETH CLAUSE TO PROVIDE THAT THE RESTATED
DEFINED BENEFIT PLAN IS EFFECTIVE OCTOBER 1, 1997;
AMENDING ARTICLE I OF THE DEFINED BENEFIT PLAN TO
CLARIFY THE DEFINITION OF "EMPLOYEE"; AMENDING ARTICLE
II OF THE DEFINED BENEFIT PLAN TO DEFINE EMPLOYEES
EXCLUDED FROM THE PLAN AND TO PROVIDE FOR THE
INCLUSION OF EMPLOYEES WITH NON-CONTRIBUTING YEARS OF
SERVICE UNDER CERTAIN CIRCUMSTANCES; AMENDING
ARTICLE III OF THE DEFINED BENEFIT PLAN TO PROVIDE FOR
CITY CONTRIBUTIONS IN AN AMOUNT NECESSARY TO FUND THE
PLAN ON A SOUND ACTUARIAL BASIS, TO CLARIFY THE
LIMITATION ON ANNUAL BENEFITS, TO PROVIDE FOR USE OF
MORTALITY TABLES TO DETEMINE ACTUARIAL EQUIVALENTS,
TO CLARIFY THE MAXIMUM PERMISSIBLE AMOUNT OF ANNUAL
ADDITIONS, TO PROVIDE FOR A DEFINITION OF "APPLICABLE
MORTALITY T ABLE", AND TO ELIMINA TE SECTION 3.07;
AMENDING ARTICLE IV OF THE DEFINED BENEFIT PLAN TO
PROVIDE FOR A THREE PERCENT CONTRIBUTION BY
PARTICIPANTS, TO PROVIDE FOR DIRECT TRANSFER OF
ELIGIBLE ROLLOVER DISTRIBUTIONS, TO PROVIDE FOR THE
"PICK-UP" OF PARTICIPANT CONTRIBUTIONS BY THE
EMPLOYER, TO PROVIDE FOR THE TRANSFER OF THE
PARTICIPANT ACCOUNT BALANCE FROM THE MONEY PURCHASE
PENSION PLAN TO THE DEFINED BENEFIT PLAN AND TRUST, AND
TO PROVIDE FOR THE DISTRIBUTION OF SUCH ACCOUNT
BALANCE UPON NORMAL RETIREMENT; AMENDING ARTICLE V
OF THE DEFINED BENEFIT PLAN TO PROVIDE A THREE PERCENT
BENEFIT MULTIPLIER FOR SERVICE AFTER OCTOBER 1, 2000,
REVISING PROVISIONS RELA TED TO ACCRUAL YEAR OF
SERVICE, AND DELETING THE FLOOR-OFFSET ARRANGEMENT;
AMENDING ARTICLE VI OF THE DEFINED BENEFIT PLAN TO
MODIFY THE AMOUNT PAYABLE TO A PARTICIPANT IN A LUMP
SUM UPON EARLY RETIREMENT; AMENDING ARTICLE VIII OF
THE DEFINED BENEFIT PLAN TO MODIFY THE AMOUNT OF
DEFERRED VESTED PENSION PAYABLE TO A PARTICIPANT IN A
LUMP SUM, CREATING A NEW SECTION 8.05(B) TO PROVIDE FOR
ONE HUNDRED PERCENT VESTING OF REQUIRED PARTICIPANT
CONTRIBUTIONS, AND MAKING TECHNICAL AMENDMENTS;
AMENDING ARTICLE IX OF THE DEFINED BENEFIT PLAN TO
MODIFY THE AMOUNT PAYABLE IN A LUMP SUM TO A
PARTICIPANT'S SURVIVOR; AMENDING ARTICLE X OF THE
DEFINED BENEFIT PLAN TO MODIFY THE AMOUNT OF
NONFORFEIT ABLE ACCRUED BENEFIT ABOVE WHICH A
PARTICIPANT MUST CONSENT IN WRITING FOR ANY
DISTRIBUTION, AND MODIFYING THE AMOUNT OF ACCRUED
BENEFIT, NORMAL RETIREMENT BENEFIT, AND DEATH BENEFIT
PAYABLE TO A PARTICIPANT IN A LUMP SUM; AMENDING
ARTICLE XI OF THE DEFINED BENEFIT PLAN TO PERMIT THE
TRUSTEES TO ACCEPT TRANSFER OF ASSETS IN THE MONEY
PURCHASE PENSION PLAN; PROVIDING FOR CONFLICTS;
PROVIDING FOR SEVERABILITY; PROVIDING AN EFFECTIVE
DATE.
WHEREAS, the City Commission approved certain changes to the City's retirement
program for employees in July 2000 and September 2001; and
WHEREAS, the changes to the retirement program approved by the City Commission
require merging the Money Purchase Pension Plan and Trust for Employees of the City of
Winter Springs Plan and Trust with the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs, and amending provisions of the Defined Benefit Plan and Trust for
Employees of the City of Winter Springs;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF WINTER SPRINGS, FLORIDA:
Section 1.
A. That the Money Purchase Pension Plan and Trust for Employees of the City of Winter
Springs be merged into the Defined Benefit Plan and Trust for the Employees of the City of
Winter Springs, effective October 1, 2000.
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B. That the Money Purchase Plan and Trust for Employees of the City of Winter Springs
cease to exist as of October 1, 2000.
C. That upon the merger of the two plans, all participant accounts and all other assets of
the Money Purchase Plan and Trust for Employees of the City of Winter Springs, together with
earnings and interest thereon, be transferred to and become an integral part of the Defined
Benefit Plan and Trust for Employees of the City of Winter Springs; provided that said
participant accounts shall be available for distribution as permitted by the Defined Benefit Plan
and Trust for Employees ofthe City of Winter Springs.
Section 2.
That the Witnesseth Clause of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
The City of Winter Springs establishescontinues, within this Trust Agreement, a
Plan for the administration and distribution of contributions made by the Employer for
the purpose of providing retirement benefits for eligible Employees. This Plan is an
amended plan. in restated form. the original plan being effective October 1. 1997 and this
restated Plan is also effective October 1. 1997 (except to the extent otherwise provided
herein). The provisions of this Plan apply solely to an Employee whose employment
with the Employer terminates on or after the Effective Date of the Plan. If an Employee's
employment with the Employer terminates prior to the Effective Date, that Employee is
not entitled to any benefit under the Plan.
Section 3.
That Section 1.06 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
1.06 "Employee" means any employee of the Employer. Individuals who
perform services for the Employer in any capacity other than as an Employee. determined
pursuant to the books and records of the Employer (e.g.. independent contractors or
leased employees within the meaning of Code & 414(n). even if such individuals are
reclassified as Employees by any governmental agency (other than the Employer) or
iudicial decision). are not Employees for purposes of the Plan. and thus. are not eligible
to participate in the Plan.
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Section 4.
That Section 2.01 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
2.01 Eligibility. Each Employee (other than an Excluded Employee) becomes
a Participant in the Plan on the first day of the month (if employed on that date)
immediately following the date 6 months after his Employment Commencement Date.
"Employment Commencement Date" means the date on which the Employee first
performs an Hour of Service for the Employer.
(A) Excluded Employee
(1) An Employee IS an Excluded Employee if his customary weekly
employment with the Employer is less than 29 hours. An Employee is an
Excluded Employee if he is actively participating (and "benefiting" within the
meaning of Treas. Reg. & 1.41 O(b )-3) in another qualified plan maintained by the
Employer other than the Money Purchase Pension Plan and Trust for Employees
of the City of Winter Springs. Florida (hereinafter referred to as the "Money
Purchase Plan").
(2) If a Participant has not incurred a Separation from Service but becomes an
Excluded Employee. then during the period such a Participant is an Excluded
Employee. the Participant will not accrue a benefit under the Plan attributable to
any period during which he is an Excluded Employee. However. during such
period of exclusion. the Participant. without regard to employment classification.
continues to receive credit for vesting under Article VIII for each included Year
of Service.
(3) If an Excluded Employee who is not a Participant becomes eligible to
participate in the Plan by reason of a change in employment classification. he will
participate in the Plan immediately if he has satisfied the eligibility conditions of
SectiOn 2.01 and would have been a Participant had he not been an Excluded
Employee during his period of Service. Furthermore. the Plan takes into account
all of the Participant's included Years of Service with the Employer as an
Excluded Employee for purposes of vesting credit under Article VIII.
(B) Employees with Non-Contributing Service. Any Employee who completed Years
of Service prior to adoption of Resolution No. 2002-39. but did not make contributions to
this Trust Fund or to the Money Purchase Plan. shall be credited with Years of Accrual
Service upon payment of the Required Participant Contributions due under this Plan and
the required participant contributions due under the Money Purchase Plan for such
servIce.
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Section 5.
That Section 3.01 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
3.01 Amount.
(A) The Employer alono will make the contributions required to fund the cost of the
benefits provided by this Plan. The Employer intends to make such contributions as are
necessary to fund the Plan on a sound actuarial basis. in accordance with applicable law.
(B) The Employer contributes to this Plan on the condition its contribution is not due
to a mistake of fact. The Trustee, upon written request from the Employer, must return to
the Employer the amount of the Employer's contribution made by the Employer by
mistake of fact. The Trustee will not return any portion of the Employer's contribution
under the provisions of this paragraph more than one year after the Employer made the
contribution by mistake of fact. Furthermore, the Trustee will not increase the amount of
the employer contribution returnable under this Section 3.01 for any earnings attributable
to the contribution, but the Trustee will decrease the Employer contribution returnable for
any losses attributable to it.
Section 6.
That Section 3.05 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
3.05 Limitation on Annual Benefit. A Participant's Annual Benefit payable at
any time within a Limitation Year may not exceed the limitations of this Section 3.05,
even if the benefit formula under the Plan would produce a greater Annual Benefit.
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(B) Commencement prior to age 62. If a Participant's Annual Benefit commences
prior to his attaining age 62, the Retirement Committee will adjust the $90,000 (or the
larger adjusted dollar amount) limitation of this Section 3.05 to the Actuarial Equivalent
of an Annual Benefit equal to such dollar limitation commencing at age 62. The
Actuarial Equivalent under the immediately preceding sentence may not be less than
$75,000 in the event a Participant's Annual Benefit commences at or after age 55. In the
event a Participant's Annual Benefit commences prior to age 55, the Actuarial Equivalent
will equal the greater of (1) the Actuarial Equivalent of a $75,000 Annual Benefit
commencing at age 55 or (2) the Actuarial Equivalent of a $90,000 (or larger adjusted
dollar amount) Annual Benefit commencing at age 62. To determine the Actuarial
Equivalent under this paragraph, the Retirement Committee will use an interest rate
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assumption equal to the greater of 5% per annum or the rate specified in Section 1.12 and
the Applicable Mortality Table.
(C) Commencement after age 65. If a Participant's Annual Benefit commences after
his attaining age 65, the Retirement Committee will adjust the $90,000 (or larger adjusted
dollar amount) limitation of this Section 3.05 to the Actuarial Equivalent of an Annual
Benefit equal to such dollar limitation commencing at age 65. To determine the Actuarial
Equivalent under this paragraph, the Retirement Committee will use an interest rate
assumption equal to the lesser of 5% per annum or the rate specified in Section 1.12 and
the Applicable Mortality Table.
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(E) Adjustment for Years of ServiceN ears of Participation Less Than 10. The
maximum ,^..nnual Benefit$90.000 (or such larger adiusted dollar amount) limitation
described in this Section 3.05 applies to a Participant who has completed at least 10
Years of Service \yith the Employer, for purposes of the 100%. a';erage Compensation
limitation and has completed at least 10 Years of Participation in the Plan, for purposes of
the dollar limitatiofl. If a Participant has less than 10 Years of Service with the Employer
at the time benefits commence, the Retirement Committee will multiply his 100%
average Compensation limitatiofl by a fraetion, the numerator of'lIhich is the number of
Years of Service (including fractional years) with the Employer and the denominator of
which is 10. If a Participant has less than 1 0 Years of Participation in the Plan at the time
his benefits commence, the Retirement Committee will multiply his dollar limitation by a
fraction, the numerator of which is the number of Years of Participation (including
fractional years) in the Plan and the denominator of which is 10. The reductions
described in this paragraph will not reduce a Participant's maximum .^..nnual Benefitdollar
limitation to less than one-tenth of the maximum f\..~.nual Benefitdollar limitation
determined without regard to the reductions.
(F) Alternate Forms of Payment. If the Trustee pays the Participant's benefit in a form
other than an Annual Benefit, the benefit paid may not exceed the Actuarial Equivalent of
the maximum Annual Benefit payable as a straight life annuity. To determine the
Actuarial Equivalent under this paragraph, the Retirement Committee will use an interest
rate assumption equal to the greater of 5% per annum or the rate specified in Section 1.12
and the Applicable Mortality Table.
Section 7.
That Section 3.06 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
3.06 Definitions - Article III. The definitions in this Section 3.06 apply to the
limitation provisions of Part 2 of Article III. For purposes of Article III, the following
terms mean:
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(A) General Definitions.
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(4) Annual Addition. Annual Additions are the following amounts allocated
on behalf of a Participant for a Limitation Year, under a defined contribution plan
maintained by the Employer: (i) all Employer contributions; (ii) all forfeitures;
and (iii) all Employee contributions. Except to the extent provided in Treasury
regulations, Annual Additions include excess contributions described in Code
~401(k), excess aggregate contributions described in Code ~401(m), irrespective
of whether the plan distributes or forfeits such excess amounts. Excess deferrals
under Code ~402(g) are not Annual Additions unless distributed after the
correction period described in Code S402(g). Amounts allocated after March 31,
1984, to an individual medical account (as defined in Code ~415(l)(2)) included
as part of a defined benefit plan maintained by the Employer also are Annual
Additions. Furthermore, Annual Additions include contributions paid or accrued
after December 31, 1985, for taxable years ending after December 31, 1985,
attributable to post-retirement medical benefits allocated to the separate account
ofa key employee (as defined in Code S419A(d)(3)) under a welfare benefit fund
(Code ~419(e)) maintained by the Employer. For a Limitation Year, the Annual
Additions allocated on behalf of any Participant, to all defined contribution plans
maintained by the Employer, may not exceed the Maximum Permissible Amount.
The "Maximum Permissible Amount" is the lesser of (I) $30,000 (or, if greater,
one fourth of the defined benefit dollar limitation$30.000 amount as adiusted
under Code ~415(b)(1 )(A)4), or (II) 25% of the Participant's Compensation for
the Limitation Year. If there is a short Limitation Year because of a change in
Limitation Year, the Retirement Committee will multiply the $30,000 limitation
(or larger limitation) on Annual Additions by the following fraction:
Number of months in the short Limitation Year
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(5) Year of Service. /\ Plan Year during '.vhich an Employee eompletes at
least 1,000 Hours of Applicable Mortality Table. The Applicable Mortality Table
means the mortality table specified in Code & 417(e)(3) and set forth in Revenue
Ruling 95-6 (or any applicable subsequent pronouncement issued by Internal
Revenue Service.
Section 8.
That Section 3.07 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be eliminated.
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Section 9.
That Section 4.01 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
4.01 Participant Contributions. The Plan does not permit nor require Participant
contributions. Required Participant Contributions. The Plan did not permit nor require
Participant Contributions prior to October 1. 2000. Effective October 1. 2000. each
Participant is required to contribute 3% of Compensation to the Plan. which contribution
shall be considered the Required Participant Contribution. The required participant
contribution shall be deducted from each Participant's Compensation whenever such
Compensation is paid. and remitted to the Trustee. Required participant contributions
shall be considered an Employer "pick-up" contribution and shall be designated as
employer contributions pursuant to Section 414(h) of the Internal Revenue Code.
contingent upon the contributions being excluded from the Participant's gross income for
federal income tax purposes. For all other purposes of this Plan. such contributions shall
be considered Participant contributions.
Section 10.
That Section 4.02 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
4.02 Participant Rollover Contributions. The Plan does not permit Participant
rollover contributionsDirect Transfers of Eligible Rollover Distributions.
(A) General. This section applies to distributions made on or after October 1. 2002.
Notwithstanding any provision of the plan to the contrary that would otherwise limit a
distributee's election under this section. a distributee may elect. at the time and in the
manner prescribed by the board. to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the distribute in a direct rollover.
(B) Definitions.
(1 ) "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 distribute or the ioint lives (or ioint life
expectancies) of the distribute 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; and the portion of
any distribution that is not includible in gross income. Any portion of any
distribution which would be includible in gross income will be an eligible rollover
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distribution if the distribution is made to an individual retirement account
described in section 408(a). to an individual retirement annuity described in
section 408(b) or to a qualified defined contribution plan described in section
401(a) or 403(a) that agrees to separately account for amounts so transferred.
including separately accounting for the portion of such distribution which is not
so includible.
(2) "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. 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 and which agrees to separately account for amounts transferred into such
plan from this plan. an annuity contract described in section 403(b) of the Code.
or a qualified trust described in section 401(a) of the Code. that accepts the
distributee's eligible rollover distribution. This definition shall also apply in the
case of an eligible rollover distribution to the surviving spouse.
(3) "Distributee" includes an employee or former employee. In addition. the
employee's or former employee's surviving spouse is a distributee with regard to
the interest of the spouse.
(4) "Direct rollover" is a payment by the plan to the eligible retirement plan
specified by the distributee.
(C) Rollovers or Transfers into the Fund. On or after the effective date of Resolution.
the fund will accept member rollover cash contributions and/or direct cash rollovers of
distributions for the purchase of permissive service credit under the Plan. as follows:
(1) Direct Rollovers or Member Rollover Contributions from Other Plans.
The Plan will accept either a direct rollover of an eligible rollover distribution or a
member contribution of an eligible rollover distribution from a Qualified plan
described in section 403(a) of the Code. from an annuity contract described in
section 403(b) of the Code, or from an eligible plan under section 457(b) of the
Code. which is maintained by a state. political subdivision of a state. or any
agency or instrumentality of a state or political subdivision of a state.
(2) Member Rollover Contributions from 401(a) Plans and lRAs. The Plan
will accept a member rollover contribution of the portion of a distribution from
qualified 'Plan described in section 401(a) of the Code. or from an individual
retirement account or annuity described in section 408(a) or 408(b) of the Code.
that is eligible to be rolled over and would otherwise be includible in the
member's gross income.
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Section 11.
That a new Section 4.03 of the Defined Benefit Plan and Trust for Employees of the City
of Winter Springs be created to read as follows:
4.03 Participant Account Balance Transferred from Money Purchase Pension
Plan. A Participant's account balance transferred from the Money Purchase Pension Plan
and Trust for Employees of the City of Winter Springs pursuant to Resolution No. 2002-
39. shall become an integral part of this Trust Fund; provided that such account balance.
plus interest at a rate equal to the interest rate on 30-year treasury securities as published
in the Internal Revenue Bulletin determined as of the calendar month preceding the first
day of the Plan year. shall be part of the Accrued Benefit payable to a Participant upon
normal retirement except as reduced in accordance with section 8.05.
Section 12.
That Section 5.02 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
5.02 Amount of Normal Retirement Pension/Accrued Benefit. The Annual
Benefit limitations of Article III apply to the determination of a Participant's normal
retirement pension and Accrued Benefit in the manner prescribed in Section 3.05(H).
(A) Normal Retirement Pension.
(1) Benefit Formula. A Participant's normal retirement pension equals 2% of
the Participant's Average Compensation multiplied by his Years of Accrual
Service for service prior to October L 2000. and 3 % of the Participant's Average
Compensation multiplied by his Years of Accrual Service for service on and after
October 1. 2000. Such pension will be adiusted for anv distribution in accordance
with section 8.05. The maximum number of Years of Accrual Service taken into
account in the normal retirement pension is 30.
(2) Average Compensation. Average Compensation is the average of the
Participant's Plan Compensation for the Averaging Period in the Participant's
Compensation History which results in the highest Average Compensation. A
Participant's Compensation History is the Participant's entire period of
employment with the Employer. The Averaging Period is 3 consecutive
Compensation periods (or the entire period of employment, if shorter). A
Compensation period is the 12-month period ending on the last day of the Plan
Year.
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(B) Accrued Benefit. Subject to the Annual Benefit limitations of Article III, a
Participant's Accrued Benefit is the normal retirement pension accrued by the Participant
under the accrual formula provided in this paragraph (B).
(1) Method of Accrual. As of any date, a Participant's Accrued Benefit is his
normal retirement pension calculated as of the determination date, based on the
Years of Accrual Service credited as of such date.
(2) Year of Accrual Service. Years of Accrual Service are Years of Service as
determined under Section 8.06, including Years of Service completed prior to his
participation in the Plan. Any Employee who completed Years of Service prior to
the adoption of Resolution No.2002-39 but did not make contributions to this
Trust Fund or to the Money Purchase Pension Plan shall be credited with Years of
Accrual Service upon payment of the Required Participant Contributions due
under this Plan and the required participant contributions due under the Money
Purchase Pension Plan for such service. Years of Accrual Service also include
"Years of Qualified Service". Years of Qualified Service means any or all years
of service performed by the Participant as an employee of the Government of the
United States. any State or political subdivision thereof or any agency or
instrumentality of any of the foregoing. other than the Employer. but onl y if all of
the following conditions are satisfied:
(a) the Participant makes a voluntary contribution to the Plan. in an amount
necessary to fund the benefit attributable to such Years of Qualified Service (as
determined by the actuary for the Plan. utilizing actuarial assumptions used for
Plan funding purposes) and which does not exceed the amount necessary to fund
the benefit attributable to such Years of Qualified Service;
(b) the Participant makes the voluntary contribution described in paragraph
(a) above. in one lump sum payment to the Plan prior to receiving credit for such
Years of Qualified Service;
(c) the Participant's Accrued Benefit is either 100% Nonforfeitable at the time
he makes the voluntary contribution described in paragraph (a) above or will
become 100% Nonforfeitable immediately after receiving credit for such Years of
Qualified Service; and
(d) the crediting of such Years of Qualified Service must not cause the
Participant to receive a retirement benefit for the same Years of Qualified Service
under more than one retirement plan.
(3). Floor offset arrangement. The Employer also maintains the Money Pur0hase
Pension Plan and Trust for Employees of the City of Winter Springs, Florida (the "Money
Purchase Plan") and the Participants in this Plan also participate in the Money Purchase
Plan. The Retirement Committee will reduce the Participant's :\cerued Benefit in this
Plan by the :\ctuarial Equivalent benefit derived from the portion of the Participant's
11
vested account balance in the Money Purchase Plan attributable to employer
contributions and required participant contributions made pursuant to the terms of the
Money Purchase Plan (including any distributions and/or direct transfers made from the
account balance of such Participant prior to the benefit commencement date under this
Plan). The interest rate used to determine the Actuarial Equivalent benefit derived from
the Money Purchase Plan is the rate specified in Section 1.12 of this Plan. A mortality
assl:lmption '.vill not apply to determine the Actuarial Equivalent of distributions and/or
direct transfers made from the Participant's account balance in the Money Purchase Plan
nor to determine the f"ctuarial Equi';alent benefit from the Participant's vested account
balance in the Money Purchase Plan for the period prior to the benefit commencement
date under this Plan.
Section 13.
That Section 6.01 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
6.01 Eligibility for Early Retirement Pension. A Participant who has received
credit for at least 10 Years of Accrual Service (as defined in Section 8.06)and has
attained age 55 may elect an early retirement pension. A Participant who separates from
service after satisfying the service requirement but not the age requirement may elect to
receive an early retirement pension upon satisfying the age requirement. In addition, a
Participant who has completed 25 Years of Accrual Service (as defined in Section 8.06)
may elect an early retirement pension. A Participant's early retirement pension is his
Nonforfeitable Accrued Benefit payable at Normal Retirement Date without actuarial
reduction for early commencement but only if benefits commence on or after the
Participant attains age 55. If an eligible Participant elects to commence his early
retirement pension prior to attaining age 55, such Participant's early retirement pension is
the Actuarial Equivalent of his Nonforfeitable Accrued Benefit payable at age 55.
Section 14.
That Section 6.02 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
6.02 Payment of Early Retirement Pension.
(aA) If the present value of the Participant's early retirement pension does not exceed
$~3.500, the Trustee will pay the early retirement pension in lump sum, as soon as
administratively practicable after the Participant's Separation from Service or, if later,
after the Participant satisfies the eligibility requirements for an early retirement pension.
(bB) If the present value of the Participant's early retirement pension exceeds
$~3.500, the Trustee will pay the early retirement pension in the form and as of the
12
date elected by the Participant. A participant may elect to commence his early retirement
pension as of the first day of any month during the period he is eligible for the early
retirement pension and after he has separated from Service. If the Participant fails to
designate a distribution date, then the Trustee will commence payment of the early
retirement pension in accordance with Article X.
Section 15.
That Section 8.03 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
8.03 Payment of Deferred Vested Pension.
(aA) If the present value of the Participant's deferred vested pension does not exceed
$~3.500, the Trustee will pay the deferred vested pension in lump sum, as soon as
administratively practicable following the Participant's Separation from Service. In no
event may the distribution occur later than the 60th day following the close of the Plan
Year in which the Participant attains Normal Retirement Age.
(b~) If the present value of the Participant's deferred vested pension exceeds
$~3.500, the Trustee will pay the deferred vested pension in the form elected by the
Participant. A Participant may elect to commence his deferred vested pension after the
Participant's Normal Retirement Date. If the Participant fails to elect a distribution date,
then the Trustee will commence payment of the deferred vested pension in accordance
with Article X.
Section 16.
That a new Section 8.05(B) of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be created to read as follows:
8.05 Vesting Schedule.
**********
(B) 1 00% Vesting of Required Participant Contributions. Each Participant is
immediately 100% vested with respect to his Required Participant Contributions. A
Participant is entitled to receive a return of his Required Participant Contributions.
contributed while a participant under the Money Purchase Plan prior to October 1. 2000.
upon termination of employment. together with simple interest at a rate equal to the
interest rate on 30-year treasury securities as published in the Internal Revenue Bulletin
determined as ofthe calendar month preceding the first day of the Plan year. The amount
received as a distribution by the Participant shall be used to reduce the Accrued Benefit.
if any. at his Normal Retirement Date. Required Participant Contributions contributed on
13
and after October 1. 2000 are 100% vested and shall be included in the deferred vested
benefit payable to the Participant upon normal retirement date.
Section 17.
That subsections (B), (C), and (D) of Section 8.05 of the Defined Benefit Plan and Trust
for Employees of the City of Winter Springs be redesignated as subsections (C), (D), and (E)
respectively, and that the first sentence of redesignated Section 8.05(C) is amended as follows:
8.05(BC) Vesting Schedule. Subject to Section 8.05(A) and Section 8.05(B), a
Participant's nonforfeitable percentage of his Accrued Benefit equals the percentage in
the following schedule:
Section 18.
That Section 8.08 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
8.08 Included Years of Service - Vesting. For purposes of determining "Years
of Service" under Section 8.06, the Plan takes into account all Years of Qualified Service
credited to a Participant pursuant to Section 5.02(B) and all Years of Service an
Employee completes with the Employer except:
(aA) Any Year of Service completed before a Break in Service, unless the Employee
completes a Year of Service after the Break in Service. This Break in Service rule will
not operate to recredit any Year of Service disregarded under clause (&B).
(b~) Any Year of Service completed before a Break in Service if the number of the
Participant's consecutive Breaks in Service equals of exceeds the greater of 5 or the
aggregate number of the Years of Service prior to the Break. This Break in Service rule
applies only if the Participant is 0% vested in his Accrued Benefit derived from Employer
contributions at the time he has a Break in Service. Furthermore, the aggregate number
of Years of Service before a Break in Service does not include any Years of Service not
required to be taken into account under this exception by reason of any prior Break in
Service. If the Retirement Committee Retirement Committee disregards the Participant's
Years of Service under this exception, the Plan forfeits his pre-Break in Service Accrued
Benefit.
(eC) Any Year of Service before the Plan Year in which the Participant attained the
age of 18.
Section 19.
14
That subsections (B) and (C) of Section 9.01 of the Defined Benefit Plan and Trust for
Employees of the City of Winter Springs be amended as follows:
9.01 Preretirement Survivor Annuity - Eligibility. If a married Participant dies
prior to his annuity starting date, the Retirement Committee will direct the Trustee to
distribute to the Participant's surviving spouse a preretirement survivor annuity, unless
the Participant has a valid waiver election (as described in Section 9.02) in effect, or
unless the Participant and his spouse were not married throughout the one year period
ending on the date of his death.
**********
(B) Present Value Not Greater Than $~3.500. If the present value of the
preretirement survivor annuity is not greater than $~3.500, the Trustee will make the
distribution in a lump sum, in lieu of the preretirement survivor annuity. The distribution
must occur on or before the annuity starting date.
(C) Surviving Spouse Elections. If the present value of the preretirement survivor
annuity exceeds $~3.500, the Participant's surviving spouse may elect to have the
Trustee commence payment of the preretirement survivor annuity as of the first day of
any month following the Participant's death, but not later than the applicable mandatory
distribution period described in Article X. A surviving spouse also may elect any form of
payment described in Article X, in lieu of the preretirement survivor annuity (other than a
joint and survivor annuity). In the absence of an election by the surviving spouse, the
Retirement Committee will direct the Trustee to distribute the preretirement survivor
annuity as soon as administratively practicable following the close of the Plan Year in
which the latest of the following events occurs: (1) the Participant's death; (2) the date the
Retirement Committee receives notification of or otherwise confirms the Participant's
death; or (3) the date the Participant would have attained Normal Retirement Age.
Section 20.
That subsection (A) of Section 10.01 of the Defined Benefit Plan and Trust for
Employees ofthe City of Winter Springs be amended as follows:
10.01 Form of Benefit. Subject to the requirements of Section 10.02, the
Retirement Committee will direct the Trustee to pay a Participant his Nonforfeitable
Accrued Benefit in a form permitted under Section 10.05. Annuity payments will
continue until the last scheduled payment coincident with or immediately preceding the
date of the Participant's death or, if applicable, the date of his survivor's death.
(A) Consent. A Participant must consent, in writing, to any distribution described in
this Article X if the present value of the Participant's Nonforfeitable Accrued Benefit
exceeds $~3.500, and the distribution commences prior to the Participant's attaining
15 '
Normal Retirement Age. Furthermore, the Participant's spouse also must consent, in
writing, to any distribution for which Section 10.02 requires the spouse's consent. For
purposes of the consent requirements under this Article X, if the present value of the
Participant's Nonforfeitable Accrued Benefit, at the time of any distribution, exceeds
$~3.500, the Retirement Committee will treat that present value as exceeding
$~3.500 for purposes of all subsequent Plan distributions to the Participant.
Section 21.
That subsection (B) of Section 10.02 of the Defined Benefit Plan and Trust for
Employees ofthe City of Winter Springs be amended as follows:
10.02 Qualified Joint and Survivor Annuity.
**********
(B) Present Value Not Greater Than $~3.500. If the present value of the
Participant's Accrued Benefit is not greater than $~3.500, the Trustee will pay the
Participant's pension in a lump sum, in lieu of a qualified joint and survivor annuity. The
distribution must occur on or before the annuity starting date. The consent requirements
ofthis Article X do not apply to a Participant subject to this paragraph.
Section 22.
That subsections (B) and (E) of Section 10.03 of the Defined Benefit Plan and Trust for
Employees of the City of Winter Springs be amended as follows:
10.03 Commencement of Benefits. The Retirement Committee must direct the
Trustee to commence distribution of benefits in accordance with this Section 10.03,
subject to the mandatory distribution requirements of Section 10.06.
**********
(B) Distribution to Participant Who Separates from Service After Normal Retirement
Date. The Retirement Committee will direct the Trustee to commence distribution to the
Participant:
(1) Present Value of Normal Retirement Pension Not Exceeding $~3.500.
In lump sum, as soon as administratively practicable following the Participant's
separation from Service, but not later than the 60th day following the close of the
Plan Year in which that separation from Service occurs.
(2) Present Value of Normal Retirement Pension Exceeds $~3.500. In the
form and at the time elected by the Participant, as permitted under this Article X.
16
The Participant may elect to commence distribution as soon as administratively
practicable following separation from Service or as of the first day of any
subsequent month.
**********
(E) Death of the Participant. If the Participant had commenced distribution prior to
his death, the Retirement Committee will direct the Trustee to make distribution to the
Participant's Beneficiary in accordance with the distribution method in effect at the time
of death. If the deceased Participant had not commenced distribution, the Retirement
Committee will direct the Trustee to distribute the Participant's death benefit in
accordance with paragraph (1) or paragraph (2), whichever applies, subject to the
requirements of Article IX.
(1) Present Value of Death Benefit Does Not Exceed $~3.500. In lump
sum, as soon as administratively practicable following the date on which the
Retirement Committee receives notification of or otherwise confirms the
Participant's death.
(2) Present Value of Death Benefit Exceeds $~3.500. In the form and at
the time elected by the Participant or, if applicable by the Beneficiary, as
permitted under this Article X. Unless otherwise elected by the Participant and to
the extent permitted under Section 10.06, a Beneficiary may elect to commence
distribution of the Participant's death benefit as of the first day of any month
following the date the Retirement Committee receives notification of or otherwise
confirms the Participant's death. In addition to the other forms of distribution
available under this Article X, and to the extent permitted under Section 10.06, a
Beneficiary may elect to receive the Participant's death benefit in monthly,
quarterly or annual installments over a 5 year period, unless the Participant
elected otherwise. In the absence of an election, the Retirement Committee will
direct the Trustee to distribute the Participant's death benefit in five annual
installment payments commencing as soon as administratively practicable
following the end of the Plan Year that the Retirement Committee receives
notification of or otherwise confirms the Participant's death.
Section 22.
That the first paragraph of Section 10.07 of the Defined Benefit Plan and Trust for
Employees of the City of Winter Springs be amended as follows:
10.07 Distributions Under Domestic Relations Orders. Nothing contained in this
Plan will prevent the Trustee, in accordance with the direction of the Retirement
Committee, from complying with the provisions of a qualified domestic relations order
(as defined in Code S414(p)). The Retirement Committee may adopt any written
procedures relating to a qualified domestic relations order which the Retirement
Committee deems necessary for proper administration of the Plan. This~ Plan
17
specificllllydoes not permits distribution to an alternate payee under a qualified domestic
relations order at any time, irrespective of '.vhetheruntil the Participant ftas-attained~ his
earliest retirement age (as defined under Code S414(p)) under the Plan. A distribution to
an alternate payee prior to the Participant's attainment of earliest retirement age is
available only if: (1) the order specifies distribution at that time or permits an agreement
between the Plan and the alternate payee to authorize an earlier distribution; and (2) if the
present value of the alternate payee's benefits under the Plan exceeds $5,000, and the
order requires, the alternate payee consents to any distribution occurring prior to the
Partieipant's attainment of earliest retirement age. Nothing in this Section 10.07 permits a
Participant a right to receive distribution at a time otherwise not permitted under the Plan
nor does it permit the alternate payee to receive a form of payment not permitted under
the Plan.
Section 23.
That the first paragraph of Section 11.05 of the Defined Benefit Plan and Trust for
Employees of the City of Winter Springs be amended as follows:
11.05 Merger/Direct Transfers. The Trustee will not consent to, or be a party to,
any merger or consolidation with another plan, or to a transfer of assets or liabilities to
another plan, unless immediately after the merger, consolidation or transfer, the surviving
Plan provides each Participant a benefit equal to or greater than the benefit each
Participant would have received had the Plan terminated immediately before the merger
or consolidation or transfer. The Trustee possesses the specific authority to enter into
merger agreements or direct transfer of assets agreements with the trustees of other
retirement plans described in Code ~401(a), and to accept the direct transfer of plan
assets, or to transfer plan assets, as a party to any such agreement. If the Trustee accepts a
transfer of assets from other retirement plans described in Code ~401(a) (other than the
Money Purchase Plan) on behalf of a Participant, the Trustee shall utilize such assets to
provide additional Accrued Benefits for such Participant. The Trustee possesses the
specific authority to accept a transfer of assets of all or any portion of a Participant's
account in the Money Purchase Plan.
Section 24.
That this resolution shall supersede any and all conflicting provisions of any previously
adopted resolutions.
Section 25.
That should any section or prOVISIOn of this resolution or any portion thereof, any
paragraph, sentence, or word be declared by a court of competent jurisdiction to be invalid, such
18
decision shall not affect the validity of the remainder hereof as a whole or part thereof other than
the part declared to be invalid.
Section 26.
That this resolution shall take effect as of October 1, 2000.
PASSED and ADOJ>>TED this _ day of
, 2002.
MAYOR
ATTEST:
CITY CLERK
19
"
DEFINED BENEFIT PLAN AND TRUST
FOR
EMPLOYEES OF THE
CITY OF WINTER SPRINGS
November 21, 2002 Revision
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS
1.01 "Plan"
1.02 "Employer"
1.03 "Trustee"
1.04 "Plan Administrator"
1.05 "Retirement Committee"
1.06 "Employee"
1.07 [Reserved]
1.08 "Participant"
1.09 "Beneficiary"
1.10 Compensation Definitions
1.11 "Accrued Benefit"
1.12 Actuarial Definitions and Related Rules.
1.13 "Plan Entry Date"
1.14 "Plan Year"
1.15 "Effective Date"
1.16 "Nonforfeitable"
1.17 "Accounting Date"
1.18 "Trust"
1.19 "Trust Fund"
1.20 "Nontransferable Annuity"
1.21 [Reserved]
1.22 "Code"
1.23 "Service"
1.24 Definitions and Special Rules Relating to Hours of Service
1.25 "Disability"
1.1
1.1
1.1
1.1
1.1
1.1
1.1
1.1
1.1
1.1
1.2
1.3
1.3
1.3
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.6
ARTICLE II - EMPLOYEE PARTICIPANTS
2.0 I Eligibility
2.02 Break in Service - Eligibility
2.03 Participation upon Re-employment
2.1
2.1
2.1
2.1
ARTICLE III - EMPLOYER CONTRffiUTIONS
3.01 Amount
3.02 Determination of Contribution
3.03 Time of Payment of Contribution
3.04 Nonvested Accrued Benefit
3.05 Limitation on Annual Benefit
3.06 Definitions - Article III
3.07 Overall Limitations
3.1
3.1
3.1
3.1
3.1
3.1
3.3
3.6
ARTICLE IV - PARTICIPANT CONTRIBUTIONS
4.01 Participant Contributions
4.02 Participant Rollover Contributions
4.03 Participant Contributions Transferred from Money Purchase Pension Plan
4.1
4.1
4.1
4.1
ARTICLE V - NORMAL RETIREMENT BENEFIT
5.01 Normal Retirement Age/Normal Retirement Date
5.02 Amount of Normal Retirement Pension/Accrued Benefit
5.03 Normal Form of Benefit
5.04 Late Retirement
5.1
5.1
5.1
5.2
5.2
ARTICLE VI - EARLY RETIREMENT PENSION
6.01 Eligibility for Early Retirement Pension
6.02 Payment of Early Retirement Pension
6.1
6.1
6.1
ARTICLE VII - DISABILITY PENSION
7.01 Disability Pension
7.1
7.1
ARTICLE VIII - DEFERRED VESTED PENSION - DEATH BENEFIT
8.01 Deferred Vested Pension
8.02 Amount of Deferred Vested Pension
8.03 Payment of Deferred Vested Pension
8.04 Pre-Retirement Death Benefit
8.05 Vesting Schedule
8.06 Year of Service - Vesting
8.07 Break in Service - Vesting
8.08 Included Years of Service - Vesting
8.09 Disregard of Accrued Benefit
8.1
8.1
8.1
8.1
8.1
8.1
8.2
8.3
8.3
8.3
ARTICLE IX - PRERETIREMENT SURVIVOR ANNUITY
9.01 Preretirement Survivor Annuity - Eligibility
9.02 Waiver Election - Preretirement Survivor Annuity
9.03 Reduction of Pension Benefits
9.1
9.1
9.1
9.2
ARTICLE X - PAYMENT OF ACCRUED BENEFIT - OPTIONAL FORMS OF
PAYMENT
10.01 Form of Benefit
10.02 Qualified Joint and Survivor Annuity
10.03 Commencement of Benefits
10.04 Waiver Election - Qualified Joint and Survivor Annuity
10.05 Optional Forms of Distribution
10.06 Mandatory Distributions
10.07 Distributions Under Domestic Relations Orders
10.]
10.]
10.~
10.~
10.'::
10.'::
10.~
10.~
11
ARTICLE XI - MISCELLANEOUS PROVISIONS AFFECTING THE PAYMENT OF
BENEFITS
11.01 General
11.02 Nonduplication of Benefits
11.03 [Reserved]
11.04 No Disregard of Service
11.05 Merger/Direct Transfers
II. ]
ll.l
11.1
11. ]
11.1
11. ]
ARTICLE XII - OTHER PROVISIONS AFFECTING BENEFITS
12.01 Assignment or Alienation
12.02 [Reserved]
12.03 [Reserved]
12.04 Distribution Upon Termination of Trust
12.05 Overfunding
12.]
12. ]
12.]
12. ]
12. ]
12.]
ARTICLE XIII - EMPLOYER ADMINISTRATIVE PROVISIONS
13.01 Information to Committee
13.02 No Liability
13.03 Indemnity of Plan Administrator and Committee
13.]
13.]
13.]
13.]
ARTICLE XIV - PARTICIPANT ADMINISTRATIVE PROVISIONS
14.01 Beneficiary Designation
14.02 No Beneficiary Designation/Death of Beneficiary
14.03 Personal Data to Committee
14.04 Address for Notification
14.05 Notice of Change in Terms
14.06 Litigation Against the Trust
14.07 Information Available
14.08 Appeal Procedure for Denial of Benefits
14.]
14.]
14.]
14.]
14.]
14.:
14.:
14.:
14.:
ARTICLE XV - RETIREMENT COMMITTEE - DUTIES WITH RESPECT TO
PARTICIPANTS' ACCRUED BENEFITS
15.01 Members' Compensation, Expenses
15.02 Term
15.03 Powers
15.04 General
15.05 Funding Policy
15.06 Manner of Action
15.07 Authorized Representative
15.08 Interested Member
15.09 Participant Records
15.10 Unclaimed Accrued Benefit - Procedure
15.]
15. ]
15. ]
15. ]
15.]
15.:
15.:
15.:
15.:
15.:
15.:
ARTICLE XVI - TRUSTEE, POWERS AND DUTIES
16.01 Acceptance
16. ]
16. ]
III
16.02 Receipt of Contributions
16.03 Investment Powers
16.04 Records and Statements
16.05 Fees and Expenses From Fund
16.06 Parties to Litigation
16.07 Professional Agents
16.08 Distribution Directions
16.09 Third Party/Multiple Trustees
16.10 Resignation
16.11 Removal
16.12 Interim Duties and Successor Trustee
16.13 Valuation of Trust.
16.14 Limitation on Liability - If Investment Manager, Ancillary Trustee or
Independent Fiduciary Appointed
16.15 Investment in Group Trust Fund / Combined Trust
16.]
16.]
16.:
16.:
16.:
16.:
16.'
16.'
16.'
16.'
16.'
16.~
16.~
16.~
ARTICLE XVII - INVESTMENT IN INSURANCE OR ANNUITY CONTRACTS
17.01 Purchase of Life Insurance and Annuity Contracts
17.]
17.]
ARTICLE XVIII - MISCELLANEOUS
18.01 Evidence
18.02 No Responsibility for Employer Action
18.03 Fiduciaries Not Insurers
18.04 Waiver of Notice
18.05 Successors
18.06 Word Usage
18.07 State Law
18.08 Employment Not Guaranteed
18.]
18.]
18. ]
18.]
18. ]
18.]
18.]
18.]
18.]
ARTICLE XIX - EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
19.01 Exclusive Benefit
19.02 Amendment By Employer
19.03 Discontinuance
19.04 Full Vesting on Termination
19.05 Termination
19.]
19.]
19. ]
19.]
19.:
19.:
Article A - Appendix to Plan and Trust Agreement
Execution Page
19.:
19.'
IV
Defined Benefit Plan and Trust for
Employees of the City of Winter Springs
The City of Winter Springs, a municipality incorporated under the laws of the State of
Florida, makes this Agreement with the Board of Trustees of the City of Winter Springs, as Trustee.
WITNESSETH:
The City of Winter Springs establishescontinues, within this Trust Agreement, a Plan for the
administration and distribution of contributions made by the Employer for the purpose of providing
retirement benefits for eligible Employees. This Plan is an amended plan. in restated form. the
original plan being effective October 1. 1997 and this restated Plan is also effective October 1. 1997
(except to the extent otherwise provided herein). The provisions of this Plan apply solely to an
Employee whose employment with the Employer terminates on or after the Effective Date of the
Plan. If an Employee's employment with the Employer terminates prior to the Effective Date, that
Employee is not entitled to any benefit under the Plan.
Now, therefore, in consideration of their mutual covenants, the Employer and the Trustee
agree as follows:
ARTICLE I - DEFINITIONS
1.01 "Plan" means the retirement plan established by the Employer in the form of this
Agreement, designated as the Defined Benefit Plan and Trust for Employees of the City of Winter
Springs.
1.02 "Employer" means the City of Winter Springs.
1.03 "Trustee" means the Board of Trustees of the City of Winter Springs, or any
successor in office who in writing accepts the position of Trustee.
1.04 "Plan Administrator" is the Employer unless the Employer designates another person
to hold the position of Plan Administrator. In addition to his other duties, the Plan Administrator
has full responsibility for compliance with any reporting and disclosure rules applicable to the Plan.
1.05 "Retirement Committee" means the Board of Trustees of the City of Winter Springs,
or any successor who in writing accepts the position of the Retirement Committee.
1.06 "Employee" means any employee of the Employer. Individuals who perform services
for the Employer in any capacity other than as an Employee. determined pursuant to the books and
records of the Employer (e.g.. independent contractors or leased employees within the meaning of
Code & 414(n). even if such individuals are reclassified as Employees by any governmental agency
(other than the Employer) or iudicial decision). are not Employees for purposes of the Plan. and thus.
are not eligible to participate in the Plan.
1.1
1.07 [Reserved]
1.08 "Participant" is an Employee who is eligible to be and becomes a Participant in
accordance with the provisions of Section 2.01.
1.09 "Beneficiary" is a person designated by a Participant or by the Plan who is or may
become entitled to a benefit under the Plan. A Beneficiary who becomes entitled to a benefit under
the Plan remains a Beneficiary under the Plan until the Trustee has fully distributed his benefit to
him. A Beneficiary's right to (and the Plan Administrator's, the Retirement Committee's or a
Trustee's duty to provide to the Beneficiary) information or data concerning the Plan does not arise
until he first becomes entitled to receive a benefit under the Plan.
1.10 Compensation Definitions. Any reference in this Plan to Compensation is a reference
to the definition in this Section 1.10, unless the Plan reference specifies a modification to this
definition. The Retirement Committee will take into account only Compensation actually paid for
the relevant period.
(A) Total Compensation. "Total Compensation" means wages, salaries, and other amounts
received (whether or not paid in cash) for personal services actually rendered in the course of
employment with the Employer, but only to the extent included in gross income. This definition
includes, but is not limited to commissions, overtime pay and bonuses. With respect to the Plan
Years beginning prior to October 1, 1998, Total Compensation does not include elective
contributions. With respect to Plan Years beginning on and after October 1, 1998, Total
Compensation includes elective contributions. Total Compensation also does not include:
(1) Employer contributions to a plan of deferred compensation to the extent the
contributions are not included in the gross income of the Employee for the taxable year in
which contributed, on behalf of an Employee to a Simplified Employee Pension Plan to the
extent such contributions are excludible from the Employee's gross income, and any
distributions from a plan of deferred compensation, regardless of whether such amounts are
includible in the gross income of the Employee when distributed.
(2) Other amounts which receive special tax benefits, such as premiums for group term
life insurance (but only to the extent that the premiums are not includible in the gross income
of the Employee), or contributions made by an Employer towards the purchase of an annuity
contract described in Code ~403(b) (whether or not the contributions are excludible from the
gross income of the Employee).
(B) Plan Compensation. Plan Compensation means Total Compensation described in Section
1.10(A), except that Plan Compensation includes elective contributions for all Plan Years. Plan
Compensation applies to determine a Participant's benefit formula and Accrued Benefit under Article
v.
(C) Elective Contributions. Elective contributions are amounts excludible from the Employee's
gross income under Code ~~ 125, 402(e)(3), 402(h) or 403(b), and contributed by the Employer, at
1.2
the Employee's election, to a Code S401(k) arrangement, a Simplified Employee Pension, cafeteria
plan or tax-sheltered annuity. Elective contributions also include: (1) Compensation deferred under
a Code ~457 plan maintained by the Employer; and (2) Employee contributions "picked up" by the
Employer and, pursuant to Code S414(h)(2), treated as Employer contributions.
(D) Limitations on Compensation.
(1) Compensation Limitation. For any Plan Year beginning after December 31, 1995, the
Retirement Committee must take into account no more Plan Compensation than the
Compensation Limitation prescribed by Code ~401(a)(17). The Compensation Limitation
is $150,000 for the 1996 Plan Year. For Plan Years beginning after December 31, 1996, the
Compensation Limitation is the adjusted dollar amount determined in accordance with Code
~401 (a)(17).
The Compensation Limitation in effect for any Plan Year (or for any 12-month
Compensation period) is the Compensation Limitation in effect at the beginning of that Plan
Year (or other 12-month period). For a Plan Year (or other Compensation measuring period)
of less than 12 months, the Compensation Limitation is a prorated dollar amount, determined
by multiplying the Compensation Limitation by a fraction equal to the number of months in
the short period divided by 12.
(2) Average Compensation. When determining Average Compensation for a Plan Year
beginning after December 31, 1995, Compensation for any prior Compensation period is
subject to the Compensation Limitation in effect for that prior Compensation period, using
$150,000 as the Compensation Limit in effect for any prior Compensation period.
1.11 "Accrued Benefit" means the benefit determined under Article V.
1.12 Actuarial Definitions and Related Rules.
(A) Definitions.
(1) "Actuarial Equivalent" means a benefit of equal value computed by using the
following assumptions, subject to the requirements of this Section 1.12:
Pre- Retirement Interest: 8%
and Mortality: 1983 Group Annuity Mortality Table, Male Rates
Post-Retirement Set Back Two Years for Females
(2) "Present value" means the single sum Actuarial Equivalent of the Participant's
Accrued Benefit.
(3) "Actuary" means an enrolled actuary selected by the Retirement Committee to
provide actuarial services for the Plan.
1.3
(B) Interest Rate. When determining the amount of a Participant's distribution or the present
value of the Participant's Accrued Benefit, the interest rate used to make an Actuarial Equivalent
determination is the applicable interest rate specified in Section 1.12(A).
1.13 "Plan Entry Date" means the date(s), specified in Section 2.01.
1.14 "Plan Year" means the fiscal year of the Plan, a 12 consecutive month period ending
every September 30.
1.15 "Effective Date" of this Plan is October 1, 1997.
1.16 "Nonforfeitable" means a Participant's or Beneficiary's unconditional claim, legally
enforceable against the Plan, to the Participant's Accrued Benefit.
1.17 "Accounting Date" is the first day of the Plan Year.
1.18 "Trust" means the separate Trust created under the Plan.
1.19 "Trust Fund" means all property of every kind held or acquired by the Trustee under
the Plan.
1.20 "Nontransferable Annuity" means an annuity which by its terms provides that it may
not be sold, assigned, discounted, pledged as collateral for a loan or security for the performance of
an obligation or for any purpose to any person other than the insurance company. If the Trustee
distributes an annuity contract, the contract must be a Nontransferable Annuity.
1.21 [Reserved]
1.22 "Code" means the Internal Revenue Code of 1986, as amended.
1.23 "Service" means any period of time the Employee is in the employ of the Employer,
including any period the Employee is on an unpaid leave of absence authorized by the Employer
under a uniform, nondiscriminatory policy applicable to all Employees. "Separation from Service"
means a separation from Service with the Employer maintaining this Plan.
1.24 Definitions and Special Rules Relating to Hours of Service
(A) Definition of Hours of Service. "Hour of Service" means:
(1) Each Hour of Service for which the Employer, either directly or indirectly, pays an
Employee, or for which the Employee is entitled to payment, for the performance of duties.
The Retirement Committee credits Hours of Service under this paragraph (1) to the
Employee for the computation period in which the Employee performs the duties,
irrespective of when paid;
1.4
(2) Each Hour of Service for back pay, irrespective of mitigation of damages, to which
the Employer has agreed or for which the Employee has received an award. The Retirement
Committee credits Hours of Service under this paragraph (2) to the Employee for the
computation period(s) to which the award or the agreement pertains rather than for the
computation period in which the award, agreement or payment is made; and
(3) Each Hour of Service for which the Employer, either directly or indirectly, pays an
Employee, or for which the Employee is entitled to payment (irrespective of whether the
employment relationship is terminated), for reasons other than for the performance of duties
during a computation period, such as leave of absence, vacation, holiday, sick leave, illness,
incapacity (including disability), layoff, jury duty or military duty. The Retirement
Committee will credit no more than 501 Hours of Service under this paragraph (3) to an
Employee on account of any single continuous period during which the Employee does not
p~rform any duties (whether or not such period occurs during a single computation period).
(4) Each Hour of Service the Employee is on an unpaid leave of absence authorized by
the Employer under a uniform, nondiscriminatory policy applicable to all Employees under
which the Employer specifically credits Hours of Service for such unpaid leave of absence.
The Retirement Committee will not credit an Hour of Service under more than one of the
above paragraphs. A computation period for purposes of this Section 1.24 is the Plan Year, Year
of Service period, Break in Service period or other period, as determined under the Plan provision
for which the Retirement Committee is measuring an Employee's Hours of Service. The Retirement
Committee will resolve any ambiguity with respect to the crediting of an Hour of Service in favor
of the Employee.
(B) Method of Crediting Hours of Service. The Retirement Committee will credit every
Employee with Hours of Service on the basis of the "actual" method. For purposes of the Plan,
"actual" method means the determination of Hours of Service from records of hours worked and
hours for which the Employer makes payment or for which payment is due from the Employer.
(C) MaternitylPaternity Leave. Solely for purposes of determining whether the Employee incurs
a Break in Service under any provision of this Plan, the Retirement Committee must credit Hours
of Service during an Employee's unpaid absence period due to maternity or paternity leave. The
Retirement Committee considers an Employee on maternity or paternity leave if the Employee's
absence is due to the Employee's pregnancy, the birth ofthe Employee's child, the placement with
the Employee of an adopted child, or the care of the Employee's child immediately following the
child's birth or placement. The Retirement Committee credits Hours of Service under this paragraph
on the basis of the number of Hours of Service the Employee would receive ifhe were paid during
the absence period or, ifthe Retirement Committee cannot determine the number of Hours of Service
the Employee would receive, on the basis of 8 hours per day during the absence period. The
Retirement Committee will credit only the number (not exceeding 501) of Hours of Service
necessary to prevent an Employee's Break in Service. The Retirement Committee credits all Hours
of Service described in this paragraph to the computation period in which the absence period begins
or, if the Employee does not need these Hours of Service to prevent a Break in Service in the
1.5
computation period in which his absence period begins, the Retirement Committee credits these
Hours of Service to the immediately following computation period.
1.25 "Disability" means a physical or mental condition of a Participant permitting such
Participant to be eligible for disability benefits under the Employer's long term disability program.
* * * * * * * * * * * * * * *
1.6
ARTICLE II - EMPLOYEE PARTICIPANTS
2.01 Eligibility. Each Employee (other than an Excluded Employee) becomes a
Participant in the Plan on the first day ofthe month (if employed on that date) immediately following
the date 6 months after his Employment Commencement Date. "Employment Commencement Date"
means the date on which the Employee first performs an Hour of Service for the Employer.
(A) Excluded Employee
(1) An Employee is an Excluded Employee ifhis customary weekly employment with
the Employer is less than 29 hours. An Employee is an Excluded Employee ifhe is actively
participating (and "benefiting" within the meaning of Treas. Reg. & 1.410(b)-3) in another
qualified plan maintained by the Employer other than the Money Purchase Pension Plan and
Trust for Employees of the City of Winter Springs. Florida (hereinafter referred to as the
"Money Purchase Plan").
(2) If a Participant has not incurred a Separation from Service but becomes an Excluded
Employee. then during the period such a Participant is an Excluded Employee. the
Participant will not accrue a benefit under the Plan attributable to any period during which
he is an Excluded Employee. However. during such period of exclusion. the Participant.
without regard to employment classification. continues to receive credit for vesting under
Article VIII for each included Year of Service.
(3) If an Excluded Employee who is not a Participant becomes eligible to participate in
the Plan by reason of a change in employment classification. he will participate in the Plan
immediately ifhe has satisfied the eligibility conditions ofSectoin 2.01 and would have been
a Participant had he not been an Excluded Employee during his period of Service.
Furthermore. the Plan takes into account all of the Participant's included Years of Service
with the Employer as an Excluded Employee for purposes of vesting credit under Article
VIII.
(B) Employees with Non-Contributing Service. Any Employee who completed Years of Service
prior to adoption of Resolution No. 2002-39. but did not make contributions to this Trust Fund or
to the Money Purchase Plan. shall be credited with Years of Accrual Service upon payment of the
Required Participant Contributions due under this Plan and the required participant contributions due
under the Money Purchase Plan for such service.
2.02 Break in Service - Eligibility. For purposes of participation in the Plan, the Plan does
not apply any Break in Service rule.
2.1
2.03 Participation upon Re-employment. A Participant whose employment terminates will
re-enter the Plan as a Participant on the date of his re-employment. An Employee who satisfies the
Plan's eligibility conditions but who terminates employment with the Employer prior to becoming
a Participant will become a Participant on the later of the Plan Entry Date on which he would have
entered the Plan had he not terminated employment or the date of his reemployment. Any Employee
who terminates employment prior to satisfying the Plan's eligibility conditions becomes a Participant
in accordance with the provisions of Section 2.01.
* * * * * * * * * * * * * * *
2.2
ARTICLE III - EMPLOYER CONTRIBUTIONS
Part 1. Determination of Employer's Contributions.
3.01 Amount.
(A) The Employer alone v;ill make the contributions required to fund the cost of the benefits
provided by this Plan. The Employer intends to make such contributions as are necessary to fund
the Plan on a sound actuarial basis. in accordance with applicable law.
(B) The Employer contributes to this Plan on the condition its contribution is not due to a mistake
of fact. The Trustee, upon written request from the Employer, must return to the Employer the
amount of the Employer's contribution made by the Employer by mistake of fact. The Trustee will
not return any portion of the Employer's contribution under the provisions of this paragraph more
than one year after the Employer made the contribution by mistake of fact. Furthermore, the Trustee
will not increase the amount of the Employer contribution returnable under this Section 3.01 for any
earnings attributable to the contribution, but the Trustee will decrease the Employer contribution
returnable for any losses attributable to it.
3.02 Determination of Contribution. The Employer, from its records and the reports
of the Actuary, will determine the amount of any contribution to be made by it to the Trust under the
terms of the Plan. In this regard, the Employer may place full reliance upon all reports, opinions,
tables, valuations, certificates and computations the Actuary furnishes the Employer.
3.03 Time of Payment of Contribution. The Employer shall make its contribution to the
Trustee not less frequently than in quarterly installments. However, contributions shall be
considered timely ifpaid to the Trustee within 90 days of the date that such payments are due.
3.04 Nonvested Accrued Benefit. The Trustee will retain in the Trust all amounts
representing the nonvested Accrued Benefit of Participants who have terminated employment. The
Employer will not use forfeited benefits to increase the benefits of other Participants but instead will
use the amounts to reduce its contribution for future Plan Years.
Part 2. Limitations on Annual Benefits.
3.05 Limitation on Annual Benefit. A Participant's Annual Benefit payable at any time
within a Limitation Year may not exceed the limitations of this Section 3.05, even if the benefit
formula under the Plan would produce a greater Annual Benefit.
(A) Commencement between ages 62 and 65. A Participant's Annual Benefit payable at an age
not less that 62 nor greater than 65, may not exceed the lesser of $90,000 (or such larger dollar
amount as the Commissioner of Internal Revenue may prescribe) or 100% of the Participant's
average Compensation for his high 3 consecutive Years of Service.
3.1
(B) Commencement prior to age 62. If a Participant's Annual Benefit commences prior to his
attaining age 62, the Retirement Committee will adjust the $90,000 (or the larger adjusted dollar
amount) limitation of this Section 3.05 to the Actuarial Equivalent of an Annual Benefit equal to
such dollar limitation commencing at age 62. The Actuarial Equivalent under the immediately
preceding sentence may not be less than $75,000 in the event a Participant's Annual Benefit
commences at or after age 55. In the event a Participant's Annual Benefit commences prior to age
55, the Actuarial Equivalent will equal the greater of (1) the Actuarial Equivalent of a $75,000
Annual Benefit commencing at age 55 or (2) the Actuarial Equivalent of a $90,000 (or larger
adjusted dollar amount) Annual Benefit commencing at age 62. To determine the Actuarial
Equivalent under this paragraph, the Retirement Committee will use an interest rate assumption
equal to the greater of 5% per annum or the rate specified in Section 1.12 and the Applicable
Mortality Table.
(C) Commencement after age 65. If a Participant's Annual Benefit commences after his attaining
age 65, the Retirement Committee will adjust the $90,000 (or larger adjusted dollar amount)
limitation of this Section 3.05 to the Actuarial Equivalent ofan Annual Benefit equal to such dollar
limitation commencing at age 65. To determine the Actuarial Equivalent under this paragraph, the
Retirement Committee will use an interest rate assumption equal to the lesser of 5% per annum or
the rate specified in Section 1.12 and the Applicable Mortality Table.
(D) [Reserved].
(E) Adjustment for Years of ServiceN ears of Participation Less Than 10. The maximum f.....~JlUal
Benefit$90.000 (or such larger adiusted dollar amount) limitation described in this Section 3.05
applies to a Participant who has completed at least 10 Years of Service with the Employer, f-or
purposes of the 100% average Compensation limitation and has completed at least 10 Years of
Participation in the Plan, for purposes of the dollar limitation. If a Participant has less than 10 Years
of Service with the Employer at the timc bcncfits commence, the Retirement Committee \vill
multiply his 100% average Compensation limitation by a fraction, the numerator of whieh is the
number of Years of Service (ineluding fractional years) with the Employer and the denominator of
which is 10. If a Participant has less than 10 Years of Participation in the Plan at the time his benefits
commence, the Retirement Committee will multiply his dollar limitation by a fraction, the numerator
of which is the number of Years of Participation (including fractional years) in the Plan and the
denominator of which is 10. The reductions described in this paragraph will not reduce a
Participant's maximum Annual Benefitdollar limitation to less than one-tenth of the maximum
A.~.nual Benefitdollar limitation determined without regard to the reductions.
(F) Alternate Forms of Payment. Ifthe Trustee pays the Participant's benefit in a form other than
an Annual Benefit, the benefit paid may not exceed the Actuarial Equivalent of the maximum
Annual Benefit payable as a straight life annuity. To determine the Actuarial Equivalent under this
paragraph, the Retirement Committee will use an interest rate assumption equal to the greater of 5%
per annum or the rate specified in Section 1.12 and the Applicable Mortality Table.
(G) Adjustments to Dollar Limitation. Any adjustment to the dollar limitation of this Section 3.05
does not take effect until the first day of the calendar year for which the Commissioner of Internal
3.2
Revenue publishes the adjustment. The new limitation will apply to the Limitation Year ending with
or within the calendar year for which the Commissioner of Internal Revenue makes the adjustment.
(H) Application of Limitations. A Participant's Accrued Benefit payable at any time may not
exceed the applicable limitation under this Section 3.05. The Retirement Committee will apply the
limitations of this Section 3.05 (as reduced, if applicable, by Section 3.07) to the calculation ofthe
Participant's normal retirement pension prior to determining the Participant's Accrued Benefit.
3.06 Definitions - Article III. The definitions in this Section 3.06 apply to the limitation
provisions of Part 2 of Article III. For purposes of Article III, the following terms mean:
(A) General Definitions.
(1) Annual Benefit. The Participant's retirement benefit (including any portion of the
Participant's retirement benefit payable to an alternate payee under a qualified domestic
relations order satisfying the requirements of Code ~414(P)) attributable to Employer
contributions payable in the form of a straight life annuity or a qualified joint and survivor
annuity, with no ancillary benefits (other than the survivor annuity).
(2) Compensation. Total Compensation, as determined under Section 1.1 O(A).
(3) Limitation Year. The Plan Year. If the Employer amends the Limitation Year to a
different 12 consecutive month period, the new Limitation Year must begin on a date within
the Limitation Year for which the Employer makes the amendment, creating a short
Limitation Year.
(4) Annual Addition. Annual Additions are the following amounts allocated on behalf
of a Participant for a Limitation Year, under a defined contribution plan maintained by the
Employer: (i) all Employer contributions; (ii) all forfeitures; and (iii) all Employee
contributions. Except to the extent provided in Treasury regulations, Annual Additions
include excess contributions described in Code S401 (k), excess aggregate contributions
described in Code ~401(m), irrespective of whether the plan distributes or forfeits such
excess amounts. Excess deferrals under Code ~402(g) are not Annual Additions unless
distributed after the correction period described in Code ~402(g). Amounts allocated after
March 31, 1984, to an individual medical account (as defined in Code ~415(1)(2)) included
as part of a defined benefit plan maintained by the Employer also are Annual Additions.
Furthermore, Annual Additions include contributions paid or accrued after December 31,
1985, for taxable years ending after December 31, 1985, attributable to post-retirement
medical benefits allocated to the separate account of a key employee (as defined in Code
~419A(d)(3)) under a welfare benefit fund (Code ~419(e)) maintained by the Employer. For
a Limitation Year, the Annual Additions allocated on behalf of any Participant, to all defined
contribution plans maintained by the Employer, may not exceed the Maximum Permissible
Amount. The "Maximum Permissible Amount" is the lesser of (I) $30,000 (or, if greater,
one fourth of the defined benefit dollar limitation$30.000 amount as adiusted under Code
3.3
~415(b)(1 )(A)4), or (II) 25% of the Participant's Compensation for the Limitation Year. If
there is a short Limitation Year because of a change in Limitation Year, the Retirement
Committee will multiply the $30,000 limitation (or larger limitation) on Annual Additions
by the following fraction:
Number of months in the short Limitation Year
12
(5) Year of Service. A Plan Year during which an Employee completes at least 1,000
Hours of Applicable Mortality Table. The Applicable Mortality Table means the mortality
table specified in Code & 417(e)(3) and set forth in Revenue Ruling 95-6 (or any applicable
subsequent pronouncement issued by Internal Revenue Service.
(6) Year of Participation. A Year of Participation is a Year of Accrual Service, as
determined under Section 5.02, but only if the Plan is in existence for such Year of
Participation and the Participant is a Participant in the Plan at least one day in that Year of
Participation. If the Participant receives credit for only a partial Year of Participation under
Section 1.11, he will receive credit for only a partial year for purposes of the limitations of
this Article ill. For any other defined benefit plan taken into account, A Year of Participation
is each accrual computation period for which: (a) the Participant receives credit for at least
the number of hours of service (or period of service, ifthe plan uses elapsed time) necessary
to accrue a benefit for that accrual computation period; and (b) the eligibility conditions of
the plan include the Participant as a participant in that plan on at least one day of that accrual
computation period. If the Employee satisfies the conditions described in clauses (a) and (b),
he will receive credit for a Year of Participation (or a partial Year of Participation, if
applicable) equal to the amount of benefit accrual service (computed to fractional parts of
a year) credited under that plan for the accrual computation period. A Participant receives
credit for a Year of Participation under another defined benefit plan only if the plan was
established no later than the last day of the accrual computation period to which the Year of
Participation relates. The Participant will not receive credit for more than one Year of
Participation under this paragraph (6) with respect to the same 12-month period.
(7) Employer. The Employer that adopts this Plan and any employers aggregated with
the Employer pursuant to Code ~~414(b), 414(c), 414(m) or 414(0). Solely for purposes of
applying the limitations of this Article III, the Retirement Committee will determine the
aggregated employers by modifying Code ~~414(b) and (c) in accordance with Code
S415(h).
(8) Defined Benefit Plan. A retirement plan which does not provide for individual
accounts for Employer contributions. The Retirement Committee must treat as a single plan
all defined benefit plans maintained by the Employer, whether or not terminated.
(9) Defined Contribution Plan. A retirement plan which provides for an individual
account for each participant and for benefits based solely on the amount contributed to the
participant's account, and any income, expenses, gains and losses, and any forfeitures of
3.4
accounts of other participants which the plan may allocate to such participant's account. The
Retirement Committee must treat as a single plan all defined contribution plans maintained
by the Employer, whether or not terminated. For purposes of the limitations of this Article
III, the Retirement Committee will treat employee contributions made to a defined benefit
plan (including this Plan) maintained by the Employer as a separate defined contribution
plan. The Retirement Committee also will treat as a defined contribution plan an individual
medical account (as defined in Code S415(1)(2)) included as part ofa defined benefit plan
maintained by the Employer and, for taxable years ending after December 31, 1985, a welfare
benefit fund under Code ~419(e) maintained by the Employer to the extent there are post-
retirement medical benefits allocated to the separate account of a key employee (as defined
in Code S419A(d)(3)).
(B) Definitions Relating to Defined Benefit and Defined Contribution Plan Limitation.
(1) Defined Benefit Plan Fraction. The defined benefit plan faction is the Participant's
Projected Annual Benefit divided by the Overall DB limitation.
(a) The "Projected Annual Benefit" means the annual retirement benefit (adjusted to an
actuarially equivalent straight life annuity if the plan expresses such benefit in a form other
than a straight life annuity or qualified joint and survivor annuity) of the Participant under
the terms of the defined benefit plan assuming he continues employment until his normal
retirement age (or current age, iflater) as stated in the defined benefit plan, his compensation
continues at the same rate as in effect in the Limitation Year under consideration until the
date of his normal retirement age and all other relevant factors used to determine benefits
under the defined benefit plan remain constant as of the current Limitation Year for all future
Limitation Years.
(b) The "Overall DB Limitation" is the lesser of (i) 125% of the dollar limitation in effect
under Code ~415(b)(1)(A) for the Limitation Year, or (ii) 140% of the Participant's average
Compensation for his high 3 consecutive Years of Service. The Overall DB Limitation
assumes the Participant has at least 10 Years of Service or the Retirement Committee will
have at least 10 Years of Service at Normal Retirement Age. To determine whether the
Participant will have at least 10 Years of Service, the Retirement Committee may include the
year in which the Participant reaches Normal Retirement Age, but only if it reasonable to
anticipate he will receive credit for a Year of Service in that year. If a Participant fails to
satisfy this 10 Years of Service requirement, the Retirement Committee will reduce the
denominator of the Participant's Overall DB Limitation in the same manner as described
under Section 3.05(E) with respect to reductions for less than 10 Years of Service. If the
Participant's Current Accrued Benefit (as described in Section 3.05) exceeds the applicable
dollar limitation in effect under Code ~415(b)(1)(A), the Participant's Overall DB Limitation
may not be less than 125% of that Current Accrued Benefit.
(2) Defined Contribution Plan Fraction. The defined contribution plan fraction is the
Participant's Aggregate Annual Additions divided by the Overall DC Limitation.
3.5
(a) The "Aggregate Annual Additions" equal the sum, as of the close ofthe Limitation
Year, of the Annual Additions to the Participant's Account under the defined contribution
planes).
(b) The "Overall DC Limitation" is the sum of the lesser of the following amounts
determined for the Limitation Year and for each prior Year of Service with the Employer:
(i) 125% of the dollar limitation in effect under Code S415(c)(1)(A) for the Limitation Year
(determined without regard to the special dollar limitations for employee stock ownership
plans), or (ii) 35% of the Participant's Compensation for the Limitation Year.
3.07 Overall Limitations.
(A) Defined Contribution Plan Limitation. If the Employer maintains a defined contribution plan
(as defined in Section 3.06), or has ever maintained a defined eontribution plan V/hich the Employer
has terminated, then the sum of the defined benefit plan fraction and the defined contribution plan
fraction for any Participant for any Limitation Year must not exceed 1.0. The Employer will reduce
the projected annual benefit under this Plan to the extent necessary to satisfy this 1.0 limitation.
* * * * * * * * * * * * * * *
3.6
ARTICLE IV - PARTICIPANT CONTRIBUTIONS
4.01 Participant Contributions. The Plan does not permit nor require Participaflt
contributions. Required Participant Contributions. The Plan did not permit nor require Participant
Contributions prior to October 1. 2000. Effective October 1. 2000. each Participant is required to
contribute 3% of Compensation to the Plan. which contribution shall be considered the Required
Participant Contribution. The required participant contribution shall be deducted from each
Participant's Compensation whenever such Compensation is paid. and remitted to the Trustee.
Required participant contributions shall be considered an Employer "pick-up" contribution and shall
be designated as employer contributions pursuant to Section 414(h) of the Internal Revenue Code.
contingent upon the contributions being excluded from the Participant's gross income for federal
income tax purposes. For all other purposes of this Plan. such contributions shall be considered
Participant contributions.
4.02 Participant Rollover Contributions. The Plan does not permit Participant rollover
contributionsDirect Transfers of Eligible Rollover Distributions.
(A) General. This section applies to distributions made on or after October L 2002.
Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's
election under this section. a distributee may elect. at the time and in the manner prescribed by the
board. to have any portion of an eligible rollover distribution paid directly to an eligible retirement
plan specified by the distribute in a direct rollover.
(B) Definitions.
(1) "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 distribute or the ioint
lives (or ioint life expectancies) of the distribute and the distributee's designated Beneficiary.
or for a specified period often vears or more: any distribution to the extent such distribution
is required under section 401 (a)(9) of the Code: and the portion of any distribution that is not
includible in gross income. Any portion of any distribution which would be includible in
gross income will be an eligible rollover distribution if the distribution is made to an
individual retirement account described in section 408( a). to an individual retirement annuity
described in section 408(b) or to a qualified defined contribution plan described in section
401 (a) or 403(a) that agrees to separately account for amounts so transferred. including
separately accounting for the portion of such distribution which is not so includible.
(2) "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.
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 and which agrees to separately account for
amounts transferred into such plan from this Plan. an annuity contract described in section
4.1
403(b) of the Code. or a qualified trust described in section 401(a) of the Code. that accepts
the distributee's eligible rollover distribution. This definition shall also apply in the case of
an eligible rollover distribution to the surviving spouse.
(3) "Distributee" includes an employee or former employee. In addition. the employee's
or former employee's surviving spouse is a distributee with regard to the interest of the
spouse.
(4) "Direct rollover" is a payment by the Plan to the eligible retirement plan specified by
the distributee.
(C) Rollovers or Transfers into the Fund. On or after the effective date of Resolution 2002-39.
the fund will accept member rollover cash contributions and/or direct cash rollovers of distributions
for the purchase of permissive service credit under the Plan. as follows:
(1 ) Direct Rollovers or Member Rollover Contributions from Other Plans. The Plan will
accept either a direct rollover of an eligible rollover distribution or a member contribution
of an eligible rollover distribution from a qualified plan described in section 403( a) of the
Code. from an annuity contract described in section 403(b) of the Code. or from an eligible
plan under section 457(b) of the Code. which is maintained by a state. political subdivision
of a state. or any agency or instrumentality of a state or political subdivision of a state.
(2) Member Rollover Contributions from 401(a) Plans and IRAs. The Plan will accept
a member rollover contribution of the portion of a distribution from qualified plan described
in section 401(a) ofthe Code. or from an individual retirement account or annuity described
in section 408( a) or 408(b) of the Code. that is eligible to be rolled over and would otherwise
be includible in the member's gross income.
4.03 Participant Account Balance Transferred from Money Purchase Pension Plan. A
Participant's account balance transferred from the Money Purchase Pension Plan and Trust for
Employees of the City of Winter Springs pursuant to Resolution No.2002-39. shall become an
integral part of this Trust Fund: provided that such account balance. plus interest at a rate equal
to the interest rate on 30-year treasury securities as published in the Internal Revenue Bulletin
determined as of the calendar month preceding the first day of the Plan year. shall be part of the
Accrued Benefit payable to a Participant upon normal retirement. except as reduced in
accordance with section 8.05.
* * * * * * * * * * * * * * *
4.2
ARTICLE V - NORMAL RETIREMENT BENEFIT
5.01 Normal Retirement Age/Normal Retirement Date.
(A) Normal Retirement Age. An Employee attains Normal Retirement Age on the date he attains
age 65.
(B) Normal Retirement Date. A Participant's Normal Retirement Date is the first day of the
month following the Participant's attainment of Normal Retirement Age. Each Participant who
retires on or after attaining the Normal Retirement Date receives a normal retirement pension.
5.02 Amount of Normal Retirement Pension/Accrued Benefit. The Annual Benefit
limitations of Article III apply to the determination of a Participant's normal retirement pension and
Accrued Benefit in the manner prescribed in Section 3.05(H).
(A) Normal Retirement Pension.
(1) Benefit Formula. A Participant's normal retirement pension equals 2% of the
Participant's Average Compensation multiplied by his Years of Accrual Service for service
prior to October 1.2000. and 3% of the Participant's Average Compensation multiplied by
his Years of Accrual Service for service on and after October 1. 2000. Such pension will be
adiusted for any distribution in accordance with section 8.05. The maximum number of
Years of Accrual Service taken into account in the normal retirement pension is 30.
(2) Average Compensation. Average Compensation is the average of the Participant's
Plan Compensation for the Averaging Period in the Participant's Compensation History
which results in the highest Average Compensation. A Participant's Compensation History
is the Participant's entire period of employment with the Employer. The Averaging Period
is 3 consecutive Compensation periods (or the entire period of employment, if shorter). A
Compensation period is the 12-month period ending on the last day ofthe Plan Year.
(B) Accrued Benefit. Subject to the Annual Benefit limitations of Article III, a Participant's
Accrued Benefit is the normal retirement pension accrued by the Participant under the accrual
formula provided in this paragraph (B).
(1) Method of Accrual. As of any date, a Participant's Accrued Benefit is his normal
retirement pension calculated as of the determination date, based on the Years of Accrual
Service credited as of such date.
(2) Year of Accrual Service. Years of Accrual Service are Years of Service as
determined under Section 8.06, including Years of Service completed prior to his
participation in the Plan. Any Employee who completed Years of Service prior to the
adoption of Resolution No.2002-39 but did not make contributions to this Trust Fund or to
the Money Purchase Pension Plan shall be credited with Years of Accrual Service upon
5.1
payment of the Required Participant Contributions due under this Plan and the required
participant contributions due under the Money Purchase Pension Plan for such service.
Years of Accrual Service also include "Years of Qualified Service". Years of Qualified
Service means any or all years of service performed by the Participant as an employee of the
Government of the United States. any State or political subdivision thereof or any agency or
instrumentality of any of the foregoing. other than the Employer. but only if all of the
following conditions are satisfied:
(a) the Participant makes a voluntary contribution to the Plan. in an amount
necessary to fund the benefit attributable to such Years of Qualified Service (as
determined by the actuary for the Plan. utilizing actuarial assumptions used for Plan
funding purposes) and which does not exceed the amount necessarY to fund the
benefit attributable to such Years of Qualified Service;
(b) the Participant makes the voluntary contribution described in paragraph (a)
above. in one lump sum payment to the Plan prior to receiving credit for such Years
of Qualified Service;
(c) the Participant's Accrued Benefit is either 100% Nonforfeitable at the time
he makes the voluntary contribution described in paragraph (a) above or will become
100% Nonforfeitable immediately after receiving credit for such Years of Qualified
Service; and
(d) the crediting of such Years of Qualified Service must not cause the
Participant to receive a retirement benefit for the same Years of Qualified Service
under more than one retirement plan.
(3). Floor offset arrangement. The Employer also maintains the Money Pmchase Poosion
Plan and Trust for Employees of the City of Winter Springs, Florida (the "Money Purchase
Plan") and the Participants in this Plan also participate in the Money Purchase Plan. The
Retirement Committee '""ill reduce the Participant's '^1ccrued Benefit in this Plan by the
Actuarial Equivalent benefit derived from the portion of the Participant's vested account
balance in the Money Purchase Plan attributable to employer contributions and required
participant contributions made pursuant to the terms of the Money Purchase Plan (ineluding
any distributions and/or direot transfers made from the account balance of such Participant
prior to the benefit commencement date under this Plan). The interest rate used to determifle
the ,\ctuarial Equivalent benefit derived from the Money Purchase Plan is the rate specified
in Section 1.12 of this Plan. A mortality assumption will not apply to determine the Actuarial
Equivalent of distributions and/or direct transfers made from the Participant's account
balance in the Money Purchase Plan nor to determine the ,\ctuarial Equivalent benefit from
the Participant's vested aceount balance in the Money Purchase Plan for the period prior to
the benefit commencement date under this Plan.
5.03 Normal Form of Benefit. The Retirement Committee will compute a Participant's
normal retirement pension in the form of a straight life annuity. The Trustee will pay the Participant's
5.2
normal retirement pension in accordance with Article X.
5.04 Late Retirement.
(A) Actuarial Adjustment for Delayed Commencement! Accrual of Benefits After Normal
Retirement Date. A benefit commencing after Normal Retirement Date is the Actuarial Equivalent
of the Participant's Accrued Benefit payable as of the later of Normal Retirement Date or the last day
of the prior Plan Year. A Participant continues to accrue benefits after his Normal Retirement Date
if the Participant's Accrued Benefit would increase because of additional Service or Compensation.
A Participant's Accrued Benefit as of the end of each Plan Year following his Normal Retirement
Date is the greater of: (1) the normal retirement pension determined under the Plan, taking into
account Service and Compensation credited after Normal Retirement Date; or (2) the Accrued
Benefit, determined as of the later of Normal Retirement Date or the end of the prior Plan Year,
actuarially adjusted for late retirement.
* * * * * * * * * * * * * * *
5.3
ARTICLE VI - EARLY RETIREMENT PENSION
6.01 Eligibility for Early Retirement Pension. A Participant who has received credit for
at least 10 Years of Accrual Service (as defined in Section 8.06)and has attained age 55 may elect
an early retirement pension. A Participant who separates from service after satisfying the service
requirement but not the age requirement may elect to receive an early retirement pension upon
satisfying the age requirement. In addition, a Participant who has completed 25 Years of Accrual
Service (as defined in Section 8.06) may elect an early retirement pension. A Participant's early
retirement pension is his Nonforfeitable Accrued Benefit payable at Normal Retirement Date without
actuarial reduction for early commencement but only if benefits commence on or after the Participant
attains age 55. If an eligible Participant elects to commence his early retirement pension prior to
attaining age 55, such Participant's early retirement pension is the Actuarial Equivalent of his
Nonforfeitable Accrued Benefit payable at age 55.
6.02 Payment of Early Retirement Pension.
(eA) If the present value of the Participant's early retirement pension does not exceed $~3.500,
the Trustee will pay the early retirement pension in lump sum, as soon as administratively practicable
after the Participant's Separation from Service or, iflater, after the Participant satisfies the eligibility
requirements for an early retirement pension.
(eB) If the present value of the Participant's early retirement pension exceeds $:S,OOG3.500, the
Trustee will pay the early retirement pension in the form and as of the date elected by the Participant.
A participant may elect to commence his early retirement pension as of the first day of any month
during the period he is eligible for the early retirement pension and after he has separated from
Service. If the Participant fails to designate a distribution date, then the Trustee will commence
payment of the early retirement pension in accordance with Article X.i
* * * * * * * * * * * * * * *
6.1
ARTICLE VII - DISABILITY PENSION
7.01 Disability Pension. The Plan does not provide a disability pension. Disability
benefits are provided under the Employer's long term disability program.
* * * * * * * * * * * * * * *
7.1
ARTICLE VIII - DEFERRED VESTED PENSION - DEATH BENEFIT
8.01 Deferred Vested Pension. A Participant who, prior to his Normal Retirement Date,
terminates employment for any reason other than death, or eligibility for an early retirement pension,
will receive a deferred vested pension (assuming the Accrued Benefit of such Participant is not
entirely forfeitable).
8.02 Amount of Deferred Vested Pension. The Participant's deferred vested pension is the
Actuarial Equivalent of his Nonforfeitable Accrued Benefit payable at Normal Retirement Date.
8.03 Payment of Deferred Vested Pension.
(aA) If the present value of the Participant's deferred vested pension does not exceed $~3.500,
the Trustee will pay the deferred vested pension in lump sum, as soon as administratively practicable
following the Participant's Separation from Service. In no event may the distribution occur later than
the 60th day following the close of the Plan Year in which the Participant attains Normal Retirement
Age.
(bB) If the present value of the Participant's deferred vested pension exceeds $~3.500, the
Trustee will pay the deferred vested pension in the form elected by the Participant. A Participant
may elect to commence his deferred vested pension after the Participant's Normal Retirement Date.
If the Participant fails to elect a distribution date, then the Trustee will commence payment of the
deferred vested pension in accordance with Article X.
8.04 Pre-Retirement Death Benefit. If a Participant dies prior to commencement of
a normal retirement pension, deferred vested pension or early retirement pension, his Beneficiary
will receive a death benefit equal to the present value of the Participant's Nonforfeitable Accrued
Benefit. The Trustee will make payment, or commence payment, of the deceased Participant's death
benefit in accordance with Articles IX and X.
8.05 Vesting Schedule.
(A) 100% Vesting Upon Certain Events. A Participant's Accrued Benefit is 100% Nonforfeitable
upon and after his attaining Normal Retirement Age (if employed on or after that date). A
Participant's Accrued Benefit is 100% Nonforfeitable if the Participant's separation from Service is
a result of death, disability or eligibility for an early retirement pension.
(B) 100% Vesting of Required Participant Contributions. Each Participant is immediately 100%
vested with respect to his Required Participant Contributions. A Participant is entitled to receive
a return of his Required Participant Contributions. contributed while a participant under the
Money Purchase Plan prior to October I. 2000. upon termination of employment. together with
simple interest at a rate equal to the interest rate on 30-year treasury securities as published in the
Internal Revenue Bulletin determined as of the calendar month preceding the first day of the Plan
year. The amount received as a distribution by the Participant shall be used to reduce the
8.1
Accrued Benefit. if any. at his Normal Retirement Date. Required Participant Contributions
contributed on and after October 1. 2000 are 100% vested and shall be included in the deferred
vested benefit payable to the Participant upon normal retirement date.
tB1!Q Vesting Schedule. Subject to Section 8.05(A) and Section 8.05(B), a Participant's
Nonforfeitable percentage in his Accrued Benefit equals the percentage in the following schedule:
Years of Service
Nonforfeitable
Percentage
Less than 3 ........................ None
3 ............................. 20%
4 ............................. 40%
5 ............................. 60%
6 ............................. 80%
7 or more . . . . . . . . . . . . . . . . . . . . .. 100%
tG1@ Amendment to Vesting Schedule. Though the Employer reserves the right to amend the
vesting schedule at any time, the Retirement Committee will not apply the amended vesting schedule
to reduce the Nonforfeitable percentage of any Participant's Accrued Benefit derived from Employer
contributions (determined as of the later of the date the Employer adopts the amendment, or the date
the amendment becomes effective) to a percentage less than the Nonforfeitable percentage computed
under the Plan without regard to the amendment. An amended vesting schedule will apply to a
Participant only if the Participant receives credit for at least one Hour of Service after the new
schedule becomes effective.
If the Employer makes a permissible amendment to the vesting schedule, each Participant
having at least 3 Years of Service with the Employer may elect to have the percentage of his
Nonforfeitable Accrued Benefit computed under the Plan without regard to the amendment. The
Participant must file his election with the Retirement Committee within 60 days of the latest of (l)
the Employer's adoption of the amendment; (2) the effective date of the amendment; or (3) his
receipt of a copy of the amendment. The Retirement Committee, as soon as practicable, must
forward a true copy of any amendment to the vesting schedule to each affected Participant, together
with an explanation of the effect of the amendment, the appropriate form upon which the Participant
may make an election to remain under the vesting schedule provided under the Plan prior to the
amendment and notice of the time within which the Participant must make an election to remain
under the prior vesting schedule. The vesting schedule election does not apply to a Participant if the
amended vesting schedule provides for vesting at least as rapid at all times as the vesting schedule
in effect prior to the amendment.
t9jili) Forfeiture for Cause. The Plan does not permit a forfeiture for cause.
8.06 Year of Service - Vesting. For purposes of vesting under Section 8.05, Year of
Service means any Plan Year during which an Employee completes not less than 1,000 Hours of
8.2
Service. A Year of Service includes any Year of Service earned prior to the Effective Date of the
Plan, except as provided in Section 8.08.
8.07 Break in Service - Vesting. For purposes of this Article VIII, a Participant incurs a
"Break in Service" if during any Plan Year he does not complete more than 500 Hours of Service
with the Employer.
8.08 Included Years of Service - Vesting. For purposes of determining "Years of Service"
under Section 8.06, the Plan takes into account all Years of Qualified Service credited to a
Participant pursuant to Section 5.02(B) and all Years of Service an Employee completes with the
Employer except:
(aA) Any Year of Service completed before a Break in Service, unless the Employee completes
a Year of Service after the Break in Service. This Break in Service rule will not operate to recredit
any Year of Service disregarded under clause (bB).
(bB) Any Year of Service completed before a Break in Service if the number of the Participant's
consecutive Breaks in Service equals of exceeds the greater of 5 or the aggregate number of the
Years of Service prior to the Break. This Break in Service rule applies only if the Participant is 0%
vested in his Accrued Benefit derived from Employer contributions at the time he has a Break in
Service. Furthermore, the aggregate number of Years of Service before a Break in Service does not
include any Years of Service not required to be taken into account under this exception by reason
of any prior Break in Service. If the Retirement Committee Retirement Committee disregards the
Participant's Years of Service under this exception, the Plan forfeits his pre-Break in Service
Accrued Benefit.
(eC) Any Year of Service before the Plan Year in which the Participant attained the age of 18.
8.09 Disregard of Accrued Benefit.
(A) Cash-Out Distribution. If a partially-vested Participant receives a cash-out payment of his
entire Nonforfeitable Accrued Benefit, the Retirement Committee will disregard the Participant's
Accrued Benefit determined as ofthe date of the cash-out distribution. A partially-vested Participant
who is re-emp10yed by the Employer after receiving a cash-out distribution has the right to repay the
Trustee the Employer derived portion of the cash-out distribution he received, provided his
repayment right has not expired. The Participant's repayment must include interest at the rate
determined under Code ~411(c)(2)(C) (or under a successor to that Code section), calculated from
the date of the cash-out distribution. A Participant's right to make repayment expires on the earlier
of: (1) the date 5 years after the Participant's first re-employment date with the Employer following
the cash-out distribution; or (2) the last day of the first Break in Service Period ending after the cash-
out distribution. A Break in Service Period is a period of 5 consecutive Plan Years in which the
Participant incurs a Break in Service.
(B) Restoration of Accrued Benefit. If, prior to the expiration of the repayment period, a
re-employed Participant makes repayment in accordance with the terms of this Section 8.09, the
8.3
Retirement Committee will restore the Participant's Accrued Benefit disregarded under this Section
8.09.
(C) 0% Vested Participant. A 0% vested Participant is a Participant whose Accrued Benefit is
entirely forfeitable at the time of his Separation from Service. Under the deemed cash-out rule, the
Retirement Committee will treat the 0% vested Participant as having received a cash-out distribution
on the date of the Participant's Separation from Service. For purposes of applying the restoration
provisions of this Section 8.09, the Retirement Committee will treat the 0% vested Participant as
repaying his cash-out "distribution" (plus the required interest) on the first date of his re-employment
with the Employer.
* * * * * * * * * * * * * * *
8.4
ARTICLE IX - PRERETIREMENT SURVIVOR ANNUITY
9.01 Preretirement Survivor Annuity - Eligibility. If a married Participant dies prior to his
annuity starting date, the Retirement Committee will direct the Trustee to distribute to the
Participant's surviving spouse a preretirement survivor annuity, unless the Participant has a valid
waiver election (as described in Section 9.02) in effect, or unless the Participant and his spouse were
not married throughout the one year period ending on the date of his death.
(A) Preretirement Survivor Annuity - Defined. A preretirement survivor annuity is a straight life
annuity, payable no less frequently than annually, for the life of the surviving spouse.
(B) Present Value Not Greater Than $~3.500. If the present value of the preretirement
survivor annuity is not greater than $~3.500, the Trustee will make the distribution in a lump
sum, in lieu of the preretirement survivor annuity. The distribution must occur on or before the
annuity starting date.
(C) Surviving Spouse Elections. If the present value of the preretirement survivor annuity
exceeds $~3.500, the Participant's surviving spouse may elect to have the Trustee commence
payment of the preretirement survivor annuity as of the first day of any month following the
Participant's death, but not later than the applicable mandatory distribution period described in
Article X. A surviving spouse also may elect any form of payment described in Article X, in lieu of
the preretirement survivor annuity (other than a joint and survivor annuity). In the absence of an
election by the surviving spouse, the Retirement Committee will direct the Trustee to distribute the
preretirement survivor annuity as soon as administratively practicable following the close of the Plan
Year in which the latest of the following events occurs: (1) the Participant's death; (2) the date the
Retirement Committee receives notification of or otherwise confirms the Participant's death; or (3)
the date the Participant would have attained Normal Retirement Age.
(D) Special Rules. If the Participant's surviving spouse dies prior to the commencement ofthe
preretirement survivor annuity, the Plan will not pay the preretirement survivor annuity and the
Retirement Committee will determine the Participant's death benefit pursuant to Section 8.04.
9.02 Waiver Election - Preretirement Survivor Annuity.
(A) Explanation of Waiver. The Retirement Committee must provide a written explanation of
the preretirement survivor annuity to each married Participant, within the following period which
ends last: (1) the period beginning on the first day of the Plan Year in which the Participant attains
age 32 and ending on the last day of the Plan Year in which the Participant attains age 34; or (2) a
reasonable period after an Employee becomes a Participant. A reasonable period described in clause
(2) is the period beginning one year before and ending one year after the Employee becomes a
Participant. Ifthe Participant separates from Service before attaining age 35, clauses (1) and (2) do
not apply and the Retirement Committee must provide the written explanation within the period
beginning one year before and ending one year after the separation from Service. The written
explanation must describe, in a manner consistent with Treasury regulations, the terms and
conditions of the preretirement survivor annuity comparable to the explanation of the qualified joint
9.1
and survivor annuity required under Article X. The Plan does not limit the number of times the
Participant may revoke a waiver of the preretirement survivor annuity or make a new waiver during
the election period.
(B) Waiver Requirements. A Participant's waiver election ofthe preretirement survivor annuity
is not valid unless (1) the Participant makes the waiver election no earlier than the first day ofthe
Plan Year in which he attains age 35 and (2) the Participant's spouse (to whom the preretirement
survivor annuity is payable) satisfies the consent requirements described in Article X, except the
spouse need not consent to the form of benefit payable to the designated Beneficiary. The spouse's
consent to the waiver of the preretirement survivor annuity is irrevocable, unless the Participant
revokes the waiver election. Irrespective of the time of election requirement described in clause (1),
if the Participant separates from Service prior to the first day of the Plan Year in which he attains age
35, the Retirement Committee will accept a waiver election as respects the Participant's Accrued
Benefit attributable to his Service prior to his separation from Service. Furthermore, if a Participant
who has not separated from Service makes a valid waiver election, except for the timing requirement
of clause (1), the Retirement Committee will accept that election as valid, but only until the first day
of the Plan Year in which the Participant attains age 35. A waiver election described in this
paragraph is not valid unless made after the Participant has received the written explanation
described in this Section 9.02.
9.03 Reduction of Pension Benefits. The Trustee will not reduce a Participant's pension
benefits as a result of the preretirement survivor annuity coverage required under Section 9.01. The
Employer alone bears the cost of providing the preretirement survivor annuity.
* * * * * * * * * * * * * * *
9.2
ARTICLE X - PAYMENT OF ACCRUED BENEFIT -
OPTIONAL FORMS OF PAYMENT
10.01 Form of Benefit. Subject to the requirements of Section 10.02, the Retirement
Committee will direct the Trustee to pay a Participant his Nonforfeitable Accrued Benefit in a form
permitted under Section 10.05. Annuity payments will continue until the last scheduled payment
coincident with or immediately preceding the date of the Participant's death or, if applicable, the date
of his survivor's death.
(A) Consent. A Participant must consent, in writing, to any distribution described in this Article
X if the present value of the Participant's Nonforfeitable Accrued Benefit exceeds $~3.500, and
the distribution commences prior to the Participant's attaining Normal Retirement Age. Furthermore,
the Participant's spouse also must consent, in writing, to any distribution for which Section 10.02
requires the spouse's consent. For purposes of the consent requirements under this Article X, if the
present value of the Participant's Nonforfeitable Accrued Benefit, at the time of any distribution,
exceeds $~3.500, the Retirement Committee will treat that present value as exceeding
$~3.500 for purposes of all subsequent Plan distributions to the Participant.
(B) Annuity starting date/distribution date. The term "annuity starting date" means: (1) the first
day of the first period for which the Plan pays an amount as an annuity; or (2) for a distribution in
any other form, the date of the distribution. A distribution date is the date as of which the Plan
requires distribution or as of the date which the Participant (or Beneficiary) may elect to commence
distribution.
(C) Direct Rollover of Eligible Rollover Distribution. For distributions made after December 31,
1992, a Participant may elect, at the time and in the manner prescribed by the Retirement Committee,
to have any portion of his eligible rollover distribution paid directly to an eligible retirement plan
specified by the Participant in a direct rollover designation. For purposes of this Section 10.01(C),
a Participant includes a Participant's surviving spouse and the Participant's spouse or former spouse
who is an alternate payee under a qualified domestic relations order.
The following definitions apply to this Section 10.01 (C):
(1) Eligible rollover distribution. An eligible rollover distribution is any distribution of
all or any portion of the balance to the credit of the Participant, except an eligible rollover
distribution does not include: any distribution which is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life expectancy) of the Participant
or the joint lives (or joint life expectancies) of the Participant and the Participant's designated
beneficiary, or for a specified period of ten years or more; any distribution to the extent required
under Code ~401 (a)(9); and the portion of any distribution which is not includible in gross income
(determined without regard to the exclusion of net unrealized appreciation with respect to employer
securities).
(2) Eligible retirement plan. An eligible retirement plan is an individual retirement
10.1
account described in Code ~408(a), an individual retirement annuity described in Code ~401(b), an
annuity plan described in Code s403(a), or a qualified trust described in Code ~401(a), which
accepts the Participant's eligible rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an individual retirement account
or individual retirement annuity.
(3) Direct rollover. A direct rollover is a payment by the Plan to the eligible retirement
plan specified by the distributee.
10.02 Qualified Joint and Survivor Annuity.
(A) Payment of Annuity Form. The Retirement Committee must direct the Trustee to distribute
a married or unmarried Participant's Nonforfeitable Accrued Benefit in the form of a qualified joint
and survivor annuity, unless the Participant makes a valid waiver election (described in Section
10.04) prior to the annuity starting date. If, as of the annuity starting date, the Participant is married,
a qualified joint and survivor annuity is an immediate annuity payable for the life of the Participant
and a survivor annuity payable for the remaining life of the Participant's surviving spouse which is
50% of the amount of the annuity payable during the life of the Participant. If, as of the annuity
starting date, the Participant is not married, a qualified joint and survivor annuity is an immediate
life annuity for the Participant. The qualified joint and survivor annuity will be the Actuarial
Equivalent of the Participant's Nonforfeitable Accrued Benefit and will provide monthly payments.
The Participant may elect to have annuity payments less frequently than monthly, but not less
frequently than annually.
(B) Present Value Not Greater Than $~3.500. If the present value of the Participant's
Accrued Benefit is not greater than $~3.500, the Trustee will pay the Participant's pension in a
lump sum, in lieu of a qualified joint and survivor annuity. The distribution must occur on or before
the annuity starting date. The consent requirements of this Article X do not apply to a Participant
subject to this paragraph.
10.03 Commencement of Benefits. The Retirement Committee must direct the Trustee to
commence distribution of benefits in accordance with this Section 10.03, subject to the mandatory
distribution requirements of Section 10.06.
(A) Distribution to Participant Who Separates from Service Before Normal Retirement Date. The
Retirement Committee will direct the Trustee to commence distribution of the Participant's
Nonforfeitable Accrued Benefit in accordance with Article VI, VII or VIII, whichever applies.
(B) Distribution to Participant Who Separates from Service After Normal Retirement Date. The
Retirement Committee will direct the Trustee to commence distribution to the Participant:
(1) Present Value of Normal Retirement Pension Not Exceeding $~3.500. In lump
sum, as soon as administratively practicable following the Participant's separation from
Service, but not later than the 60th day following the close of the Plan Year in which that
10.2
separation from Service occurs.
(2) Present Value of Normal Retirement Pension Exceeds $~3.500. In the form and
at the time elected by the Participant, as permitted under this Article X. The Participant may
elect to commence distribution as soon as administratively practicable following separation
from Service or as of the first day of any subsequent month.
(C) Failure of Participant To Make an Election. Where the Participant has the right to elect the
form and timing of his pension, but has failed to make an election, the Retirement Committee will
direct the Trustee to commence distribution of the Participant's pension, in the form prescribed by
Section 10.02, as soon as administratively practicable following the later of: (1) the Participant's
attainment of Normal Retirement Age; or (2) the Participant's separation from Service. If, pursuant
to the Plan, the latest distribution date available to the Participant occurs earlier than the mandatory
distribution date described in this Section 1O.03(C), the Retirement Committee will satisfy this
distribution requirement by purchasing, as soon as administratively practicable after the latest
applicable distribution date, a deferred Nontransferable Annuity which will commence the
Participant's pension at the mandatory distribution date.
(D) Notice to Participant. At least 30 days before the Participant's annuity starting date, the
Retirement Committee must provide a benefit notice to a Participant who is eligible to make a
distribution election under the Plan. The benefit notice must explain the optional forms of benefit
in the Plan, including the material features and relative values of those options, and the Participant's
right to defer distribution until he attains Normal Retirement Age.
(E) Death of the Participant. If the Participant had commenced distribution prior to his death, the
Retirement Committee will direct the Trustee to make distribution to the Participant's Beneficiary
in accordance with the distribution method in effect at the time of death. If the deceased Participant
had not commenced distribution, the Retirement Committee will direct the Trustee to distribute the
Participant's death benefit in accordance with paragraph (1) or paragraph (2), whichever applies,
subject to the requirements of Article IX.
(1) Present Value of Death Benefit Does Not Exceed $~3.500. In lump sum, as soon
as administratively practicable following the date on which the Retirement Committee
receives notification of or otherwise confirms the Participant's death.
(2) Present Value of Death Benefit Exceeds $~3.500. In the form and at the time
elected by the Participant or, if applicable by the Beneficiary, as permitted under this Article
X. Unless otherwise elected by the Participant and to the extent permitted under Section
10.06, a Beneficiary may elect to commence distribution of the Participant's death benefit as
of the first day of any month following the date the Retirement Committee receives
notification of or otherwise confirms the Participant's death. In addition to the other forms
of distribution available under this Article X, and to the extent permitted under Section
10.06, a Beneficiary may elect to receive the Participant's death benefit in monthly, quarterly
or annual installments over a 5 year period, unless the Participant elected otherwise. In the
absence of an election, the Retirement Committee will direct the Trustee to distribute the
10.3
Participant's death benefit in five annual installment payments commencing as soon as
administratively practicable following the end of the Plan Year that the Retirement
Committee receives notification of or otherwise confirms the Participant's death.
10.04 Waiver Election - Qualified Joint and Survivor Annuity.
(A) Explanation of Waiver. At least 30 days before the Participant's annuity starting date, the
Retirement Committee must provide the Participant a written explanation of the terms and conditions
of the qualified joint and survivor annuity, the Participant's right to make, and the effect of, an
election to waive the joint and survivor form of benefit, the rights of the Participant's spouse
regarding the waiver election and the Participant's right to make, and the effect of, a revocation of
a waiver election. The Plan does not limit the number of times the Participant may revoke a waiver
of the qualified joint and survivor annuity or make a new waiver during the election period.
(B) Waiver Requirements. A married Participant's waiver election is not valid unless (1) the
Participant's spouse (to whom the survivor annuity is payable under the qualified joint and survivor
annuity), after the Participant has received the written explanation described in this Section, has
consented in writing to the waiver election, the spouse's consent acknowledges the effect of the
election, and a notary public or the Plan Administrator (or his representative) witnesses the spouse's
consent, (2) the spouse consents to the alternate form of payment designated by the Participant or
to any change in that designated form of payment, and (3) unless the spouse is the Participant's sole
primary Beneficiary, the spouse consents to the Participant's Beneficiary designation or to any
change in the Participant's Beneficiary designation. The spouse's consent to a waiver of the qualified
joint and survivor annuity is irrevocable unless the Participant revokes the waiver election. The
spouse may execute a blanket consent to any form of payment designation or to any Beneficiary
designation made by the Participant, if the spouse acknowledges the right to limit that consent to a
specific designation but, in writing, waives that right.
The Retirement Committee may accept as valid a waiver election which does not satisfy the
spousal consent requirements if the Retirement Committee establishes the Participant does not have
a spouse, the Retirement Committee is not able to locate the Participant's spouse, the Participant is
legally separated or has been abandoned (within the meaning of State law) and the Participant has
a court order to that effect, or other circumstances exist under which the Secretary of the Treasury
will excuse the consent requirement. If the Participant's spouse is legally incompetent to give
consent, the spouse's legal guardian (even if the guardian is the Participant) may give consent.
10.05 Optional Forms of Distribution. The Retirement Committee will direct the Trustee
to pay the Participant's Nonforfeitable Accrued Benefit, as elected by the Participant or, if applicable,
by the Beneficiary, under one of the optional forms of distribution permitted under this Section
10.05, subject to the annuity distribution requirements of Section 10.02. The Beneficiary's election,
except as required by Article lX, is subject to any restrictions designated in writing by the Participant
and not revoked as of his date of death.
lOA
(A) Actuarial Equivalent Optional Forms. Any form of payment under this Section 1 0.05(A) must
satisfy the mandatory distribution requirements of Section 10.06 and must be the Actuarial
Equivalent of the Participant's Nonforfeitable Accrued Benefit.
The optional forms of distribution are:
(1) Installments. Payment in monthly, quarterly or annual installments over the life
expectancy of the Participant, or the joint life and last survivor expectancy of the Participant
and his designated Beneficiary.
(2) Life Annuity. A straight life annuity, payable no less frequently than annually, with
payment of the Participant's Accrued Benefit ending on the Participant's death.
(3) Life Annuity with Term Certain. A life annuity, payable no less frequently than
annually, with a term certain guaranteed. The term certain cannot exceed the Participant's life
expectancy, or the joint life and last survivor expectancy of the Participant and his designated
Beneficiary. If a Participant dies before the Trustee has made the guaranteed number of
payments, the Trustee will continue the balance of the payments to the Participant's
designated Beneficiary.
(4) Joint and Survivor Annuity. Ajoint life annuity payable for the life of the Participant,
with a survivor annuity payable for the remaining life of a designated Beneficiary which is
a specified percentage (either 75% or 100%) of the annuity payable during the Participant's
life.
10.06 Mandatory Distributions.
(A) Required Beginning Date. If any distribution commencement date described under the Plan,
either by Plan provision or by Participant election (or nonelection), is later than the Participant's
Required Beginning Date, the Retirement Committee instead must direct the Trustee to make
distribution to the Participant on the Participant's Required Beginning Date. A Participant's Required
Beginning Date is the April I following the close of the calendar year in which the Participant attains
age 70'i1 or, if later, April 1 following the close of the calendar year in which the Participant
separates from Service. A mandatory distribution at the Participant's Required Beginning Date will
be in the form of distribution required under Section 10.02 unless the Participant, pursuant to the
provisions of this Article X, makes a valid election to receive an alternative form of payment.
(B) Minimum Distribution Requirements for Participants. The Retirement Committee may not
direct the Trustee to distribute the Participant's Nonforfeitable Accrued Benefit, nor may the
Participant elect to have the Trustee distribute his Nonforfeitable Accrued Benefit, under a method
of payment which, as of the Required Beginning Date, does not satisfy the minimum distribution
requirements under Code ~401(a)(9) and the applicable Treasury regulations.
10.5
(1) Minimum distribution for annuity distribution. An annuity distribution made to the
Participant to satisfy the minimum distribution requirements must meet all of the following
requirements:
(a) The periodic payment intervals under the annuity may not be longer than one
year.
(b) The distribution period must not exceed the life (or joint lives) of the
Participant and his designated Beneficiary (as determined under Article XN, subject
to the requirements of the Code ~401 (a)(9) regulations), or a period certain not longer
than the life expectancy (or joint life expectancy) or the Participant and his
designated Beneficiary.
(c) The annuity does not recalculate life expectancy.
(d) The Participant or Beneficiary may not lengthen the period certain, if
applicable, even if the period certain is shorter than the maximum period permitted
under Code ~401(a)(9).
(e) The payments are nonincreasing or increase only under the following
circumstances: (i) with any percentage increase in a specified and generally
recognized cost-of-living index; (ii) to take into account the reduction to the amount
of the participant's payments to provide a survivor benefit, but only upon the death
of the Beneficiary on whose life the annuity determines the survivor distribution
period and if the payments continue over the life of the Participant; (iii) to provide
cash refunds of Employee contributions upon the Participant's death; or (iv) because
of an increase in benefits under the Plan.
(f) If the annuity is a life annuity (or a life annuity with a period certain not
exceeding 20 years) the minimum distribution required by the Participant's Required
Beginning Date is one payment interval. Subsequent minimum distributions are the
payment intervals determined under the annuity, even if the second payment interval
occurs in the calendar year following the year in which the Required Beginning Date
occurs.
(g) If the annuity provides a period certain without a life contingency, or if a life
annuity with a period certain exceeding 20 years, the minimum distribution for each
calendar year subject to this Section 10.06, is the annual amount, determined by
totaling the periodic payments for a calendar year. The minimum distribution due by
the Participant's Required Beginning Date is the annual amount for the calendar year
preceding that Required Beginning Date. The minimum distribution for the calendar
year which includes the Required Beginning Date and for all subsequent calendar
years is the annual amount for that calendar year and the annuity must pay that
minimum distribution no later than December 31 of that calendar year.
10.6
(2) Minimum Distribution Incidental Death Benefit ("MDIB"). If the Participant's spouse
is not his designated Beneficiary, an annuity must satisfy the MDIB requirements of this
paragraph. If the annuity provides a period certain without a life contingency, the period
certain in effect as of the first distribution calendar year may not exceed the applicable period
determined under the maximum period certain table set forth in Treas. Reg. ~ 1.401 (a)(9)-2.
If the annuity with a life contingency includes a period certain, the period certain at any time
on or after the Participant's Required Beginning Date also may not exceed the maximum
period certain determined under the table described in the immediately preceding sentence.
If the annuity is a joint and survivor annuity payable for the joint lives of the Participant and
a nonspouse Beneficiary, the survivor percentage in effect at any time on or after the
Participant's Required Beginning Date may not exceed the percentage determined under the
applicable percentage table set forth in Treas. Reg. ~1.401(a)(9)-2. A joint and survivor
annuity under which the survivor percentage does not exceed 52% always satisfies this
paragraph. A life annuity payable to the Participant, without any period certain, is not subject
to the MDIB requirements of this paragraph.
(3) Additional Accruals. Benefits accruing to the Participant after his Required
Beginning Date constitute a separate component of an annuity distribution, beginning with
the first payment interval ending in the calendar year immediately following the calendar
year in which such amount accrues. The annuity starting date and form of distribution
commenced by the Required Beginning Date applies to the distribution of these additional
accruals, unless the Participant elects otherwise pursuant to his benefit options under the
Plan, and that election otherwise complies with these minimum distribution requirements.
An additional accrual includes any portion of the Participant's Accrued Benefit which
becomes Nonforfeitable during the applicable calendar year.
(4) Nonannuity Distributions. If the Participant elects an installment distribution directly
from the Trust, under which the method of payment is in the form of an individual account
distribution, the distribution method must satisfy the minimum distribution requirements
which apply to individual accounts, including the MDIB requirements which apply to
individual accounts, as determined under Code s401(a)(9) and the applicable regulations. A
lump sum distribution made on or before a Participant's Required Beginning Date of his
entire Nonforfeitable Accrued Benefit under the Plan satisfies the minimum distribution
requirements. Furthermore, a lump sum payment of additional accruals, as described in the
immediately preceding paragraph, no later than the end of the first payment interval ending
in the calendar year immediately following the calendar year in which such amount accrues,
satisfies the minimum distribution requirements.
(C) Minimum Distribution Requirement for Beneficiaries. The method of distribution to the
Participant's Beneficiary must satisfy Code ~401 (a)(9) and the applicable Treasury regulations.
(1) Death After the Required Beginning Date. If the Participant's death occurs after his
Required Beginning Date or, if earlier, the date the Participant commences an irrevocable
annuity, the method of payment to the Beneficiary must provide for completion of payment
10.7
over a period which does not exceed the payment period which had commenced for the
Participant.
(2) Death Before the Required Beginning Date. Ifthe Participant's death occurs prior to
his Required Beginning Date, and the Participant has not commenced an irrevocable annuity,
the method of payment to the Beneficiary must provide for completion of payment over a
period not exceeding:
(a) 5 years after the date ofthe Participant's death (with payments completed by
December 31 of the calendar year in which occurs the 5th anniversary of the
Participant's date of death); or
(b) if the Beneficiary is a designated Beneficiary, over the designated
Beneficiary's life or life expectancy.
The Retirement Committee will not direct payment over a period described in clause (b)
unless the Trustee will commence payment to the designated Beneficiary no later than the
December 31 following the close of the calendar year in which the Participant's death occurred or,
if later, and the designated Beneficiary is the Participant's surviving spouse, the December 31 of the
calendar year in which the Participant would have attained age 7012. The Retirement Committee
must use the unisex life expectancy multiples under Treas. Reg. ~ 1.72-9 for purposes of applying
this paragraph. An annuity distribution to the designated Beneficiary, whether directly from the Trust
or in the form of a Nontransferable Annuity Contract, satisfies clause (b) if the annuity satisfies the
minimum distribution requirements of Section 10.06(B), but applying paragraphs (t) and (g) of
Section 1 0.06(B)(1) as follows: (i) the distribution calendar years applicable to the designated
Beneficiary are the calendar year in which benefits must commence under clause (b) of this Section
10.06(C)(2) and all subsequent calendar years; and (ii) the first payment interval under paragraph
(t) is due by the December 31 described in this Section 10.06(C)(2). A lump sum distribution to the
Beneficiary made no later than the date described in clause (a) of this Section 1O.06(C)(2) satisfies
these minimum distribution requirements.
In the case of a nonannuity distribution to a designated Beneficiary, the Plan satisfies the
requirement of this Section 10.06(C) if the distribution method satisfies the minimum distribution
requirements applicable to individual accounts, as determined under Code ~401(a)(9) and the
applicable regulations, and the first minimum distribution occurs no later than the December 31
described in clause (2)(b) of this Section 10.06(C). The Retirement Committee will apply the post-
death minimum distribution rules by treating any amount paid to the Participant's child, which
becomes payable to the Participant's surviving spouse upon the child's attaining the age of majority,
as paid to the Participant's surviving spouse.
(D) Special Rules. The Retirement Committee, only upon the Participant's written request or, in
the case of a distribution described in Section 10.06(C), only upon the written request of the
Participant's spouse, will recalculate the applicable life expectancy period for purposes of calculating
the minimum distribution applicable to a distribution calendar year following the first distribution
10.8
calendar year. The Participant must make a recalculation election not later than his Required
Beginning Date. A surviving spouse must make a recalculation election no later than the December
31 date described in Section 10.06(C)(2). A recalculation election applicable to a joint life
expectancy payment, where the survivor is a nonspouse Beneficiary, may not take into account any
adjustment to any life expectancy other than the Participant's life expectancy, as prescribed by the
applicable regulations under Code ~401(a)(9). In the absence ofa recalculation election, the Plan
does not permit recalculation of the applicable life expectancy factor.
10.07 Distributions Under Domestic Relations Orders. Nothing contained in this Plan will
prevent the Trustee, in accordance with the direction of the Retirement Committee, from complying
with the provisions of a qualified domestic relations order (as defined in Code ~414(p)). The
Retirement Committee may adopt any written procedures relating to a qualified domestic relations
order which the Retirement Committee deems necessary for proper administration of the Plan. This~
Plan specificallydoes not permits distribution to an alternate payee under a qualified domestic
relations order at any time, irrespective of vlhetheruntil the Participant has-attainea~ his earliest
retirement age (as defined under Code ~414(P)) under the Plan..^,. distribution to an alternate payee
prior to the Participant's attaimnent of earliest retirement age is available only if: (1) the order
specifies distribution at that time or permits an agreement between the Plan and the alternate payee
to authorize an earlier distribution; and (2) if the present value of the alternate payee's benefits under
the Plan exceeds $5,000, and the order requires, the alternate payee consents to I:lfI:Y distribution
occurring prior to the Participant's attainment of earliest retirement age. Nothing in this Section
10.07 permits a Participant a right to receive distribution at a time otherwise not permitted under the
Plan nor does it permit the alternate payee to receive a form of payment not permitted under the Plan.
For purposes of applying Articles IX and X, the Retirement Committee will treat a former
spouse as the Participant's spouse or surviving spouse to the extent provided under a qualified
domestic relations order. The survivor annuity requirements of Article IX and the joint and survivor
annuity requirements of Article X apply separately to the portion of the Participant's Nonforfeitable
Accrued Benefit subject to the qualified domestic relations order and to the portion of the
Participant's Nonforfeitable Accrued Benefit not subject to that order.
The Retirement Committee must establish reasonable procedures to determine the qualified
status of a domestic relations order. Upon receiving a domestic relations order, the Retirement
Committee promptly will notifY the Participant and any alternate payee named in the order, in
writing, of the receipt of the order and the Plan's procedures for determining the qualified status of
the order. Within a reasonable period of time after receiving the domestic relations order, the
Retirement Committee must determine the qualified status of the order and must notifY the
Participant and each alternate payee, in writing, of its determination. The Retirement Committee
must provide notice under this paragraph by mailing to the individual's address specified in the
domestic relations order, or in a manner consistent with applicable law.
If any portion of the Participant's Nonforfeitable Accrued Benefit is payable during the
period the Retirement Committee is making its determination ofthe qualified status of the domestic
relations order, the Retirement Committee must make a separate accounting of the amounts payable.
10.9
If the Retirement Committee determines the order is a qualified domestic relations order within 18
months of the date amounts first are payable following receipt of the order, the Retirement
Committee will direct the Trustee to distribute the payable amounts in accordance with the order.
If the Retirement Committee does not make its determination of the qualified status of the order
within the 18-month determination period, the Retirement Committee will direct the Trustee to
distribute the payable amounts in the manner the Plan would distribute if the order did not exist and
will apply the order prospectively if the Retirement Committee later determines the order is a
qualified domestic relations order.
The Trustee will make any payments or distributions required under this Section 10.07 by
separate benefit checks or other separate distribution to the alternate payee.
* * * * * * * * * * * * * * *
10.10
ARTICLE XI - MISCELLANEOUS PROVISIONS AFFECTING
THE PAYMENT OF BENEFITS
11.01 General. In general, the Trustee will make payment of any pension directly to the
Participant entitled to the payment. However, the Retirement Committee may instruct the Trustee
to purchase a Nontransferable Annuity contract from an insurance company. The Nontransferable
Annuity contract must provide pension and other benefits in an amount not less than the pension and
other benefits a Participant would receive under this Plan and otherwise must comply with the
requirements of this Plan. In the event the Trustee purchases a Nontransferable Annuity contract for
the benefit of a Participant, the Trustee either may assign the contract to the Participant or hold the
contract for the benefit of the Participant pursuant to the instructions of the Retirement Committee.
The Trustee also may purchase a Nontransferable Annuity contract for the benefit of a designated
Beneficiary, surviving spouse or alternate payee under a qualified domestic relations order (as
defined in Code ~414(P)) entitled to distribution of all or a portion of the Participant's Nonforfeitable
Accrued Benefit.
11.02 Nonduplication of Benefits. In the event the Trustee distributes any part or all of a
Participant's Accrued Benefit to him and the Participant later resumes active employment with the
Employer, the Trustee will compute the Participant's Accrued Benefit by taking into account all of
the Participant's Years of Accrual Service. However, the Trustee will offset the Participant's Accrued
Benefit so computed by the Participant's Accrued Benefit attributable to any distribution the Trustee
has made to the Participant (other than a cash-out distribution described in Article VIII). If the
distribution was a cash-out distribution, as described in Article VIII, the Trustee will offset the
Participant's Accrued Benefit by the Accrued Benefit disregarded under Section 8.09.
11.03 [Reserved].
11.04 No Disregard of Service. For purposes of computing Years of Service under Article
VIII, the Plan does not disregard Years of Service with respect to which a Participant has received
a distribution of his Accrued Benefit.
11.05 Merger/Direct Transfers. The Trustee will not consent to, or be a party to, any merger
or consolidation with another plan, or to a transfer of assets or liabilities to another plan, unless
immediately after the merger, consolidation or transfer, the surviving Plan provides each Participant
a benefit equal to or greater than the benefit each Participant would have received had the Plan
terminated immediately before the merger or consolidation or transfer. The Trustee possesses the
specific authority to enter into merger agreements or direct transfer of assets agreements with the
trustees of other retirement plans described in Code ~401 (a), and to accept the direct transfer of plan
assets, or to transfer plan assets, as a party to any such agreement. If the Trustee accepts a transfer
of assets from other retirement plans described in Code ~401(a) (other than the Money Purchase
Plan) on behalf of a Participant, the Trustee shall utilize such assets to provide additional Accrued
Benefits for such Participant. The Trustee possesses the specific authority to accept a transfer of
assets of all or any portion of a Participant's account in the Money Purchase Plan.
11.1
The Trustee may accept a direct transfer of plan assets on behalf of an Employee prior to the
date the Employee satisfies the Plan's eligibility conditions. If the Trustee accepts such a direct
transfer of plan assets, the Retirement Committee and Trustee will treat the Employee as a
Participant for all purposes of the Plan except the Employee will not accrue benefits until he actually
becomes a Participant in the Plan. If the Employee terminates employment with the Employer prior
to becoming a Participant, the Trustee will distribute his transferred assets to him as if they were
Employer-derived Accrued Benefits.
* * * * * * * * * * * * * * *
11.2
ARTICLE XII - OTHER PROVISIONS AFFECTING BENEFITS
12.01 Assignment or Alienation. Subject to Code ~414(P) (relating to qualified domestic
relations orders), neither a Participant nor a Beneficiary may anticipate assign or alienate (either at
law or in equity) any benefit provided under the Plan, and the Trustee will not recognize any such
anticipation, assignment or alienation. Furthermore, a benefit under the Plan is not subject to
attachment, garnishment, levy, execution or other legal or equitable process.
12.02 [Reserved]
12.03 [Reserved]
12.04 Distribution Upon Termination of Trust. If the Employer terminates the Plan, the
Trustee will determine the value of the Trust Fund as of the business day next following the date of
such termination.
(A) Allocation of Assets. Upon termination of the Plan, the Retirement Committee shall direct
the Trustee to allocate the assets of the Plan in a nondiscrimatory manner and in accordance with all
applicable regulations. Any residual assets remaining after satisfaction of all benefit liabilities shall
be distributed in accordance with Section 12.05.
12.05 Overfunding. If the Employer has overfunded the Plan at the time it terminates the
Plan, the Trustee must return the amount by which the Employer has overfunded the Plan to the
Employer, except to the extent the Plan allocates surplus assets to the Participants pursuant to written
procedures (including any necessary Plan amendments) adopted by the Employer incident to the
Plan's termination. The Employer must state by written request to the Trustee the amount of the
overfunding it wishes the Trustee to return to it after satisfying all liabilities under the terminated
Plan.
* * * * * * * * * * * * * * *
12.1
ARTICLE XIII - EMPLOYER ADMINISTRATIVE PROVISIONS
13.01 Information to Committee. The Employer must supply current information to the
Retirement Committee as to the name, date of birth, date of employment, annual compensation,
leaves of absence, Years of Service and date of termination of employment of each Employee who
is, or who will be eligible to become, a Participant under the Plan, together with any other
information which the Retirement Committee considers necessary. The Employer's records as to the
current information the Employer furnishes to the Retirement Committee are conclusive as to all
persons.
13.02 No Liability. The Employer assumes no obligation or responsibility to any of its
Employees, Participants or Beneficiaries for any act of, or failure to act, on the part of its Retirement
Committee (unless the Employer is the Retirement Committee), the Trustee or the Plan
Administrator (unless the Employer is the Plan Administrator).
13.03 Indemnity of Plan Administrator and Committee. To the extent permitted under
applicable law, the Employer indemnifies and saves harmless the Plan Administrator, the members
of the Retirement Committee, and the Trustee, and each of them, from and against any and all loss
resulting from liability to which the Plan Administrator, the Retirement Committee, or the members
of the Retirement Committee and the Trustee may be subjected by reason of any act or conduct
(except willful misconduct or gross negligence) in their official capacities in the administration of
this Trust or Plan or both, including all expenses reasonably incurred in their defense, in case the
Employer fails to provide such defense.
* * * * * * * * * * * * * * *
13.1
ARTICLE XIV - PARTICIPANT ADMINISTRATIVE PROVISIONS
14.01 Beneficiary Designation. Any Participant may from time to time designate, in writing,
any person or persons, contingently or successively, to whom the Trustee will pay any applicable
death benefits under the Plan and the Participant may designate the form and method of payment.
The Retirement Committee will prescribe the form for the written designation of Beneficiary and,
upon the Participant's filing the form with the Retirement Committee, the form effectively revokes
all designations filed prior to that date by the same Participant. In the absence of spousal consent (as
required by Articles IX and X) to the Participant's Beneficiary designation, any waiver of the
qualified joint and survivor annuity or of the preretirement survivor annuity is not valid.
14.02 No Beneficiary Designation/Death of Beneficiary. If a Participant fails to name a
Beneficiary in accordance with Section 14.01, or if the Beneficiary named by a Participant
predeceases him, then the Trustee will pay the death benefit in accordance with Article X in the
following order of priority to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted children, in equal shares;
(c) The Participant's surviving parents, in equal shares; or
(d) The legal representative of the Participant's estate.
If the Beneficiary does not predecease the Participant, but dies prior to distribution of his
share of the Participant's entire death benefit, the Trustee will pay the remaining death benefit to the
Beneficiary's estate unless the Participant's Beneficiary designation provides otherwise. The
Retirement Committee will direct the Trustee as to the method and to whom the Trustee will make
payment under this Section 14.02.
14.03 Personal Data to Committee. Each Participant and each Beneficiary of a deceased
Participant must furnish to the Retirement Committee such evidence, data or information as the
Retirement Committee considers necessary or desirable for the purpose of administering the Plan.
The provisions of this Plan are effective for the benefit of each Participant upon the condition
precedent that each Participant will furnish promptly full, true and complete evidence, data and
information when requested by the Retirement Committee, provided the Retirement Committee
advises each Participant of the effect of his failure to comply with its request.
14.04 Address for Notification. Each Participant and each Beneficiary of a deceased
Participant must file with the Retirement Committee from time to time, in writing, his post office
address and any change of post office address. Any communication, statement or notice addressed
to a Participant, or Beneficiary, at his last post office address filed with the Retirement Committee,
or as shown on the records of the Employer, binds the Participant, or Beneficiary, for all purposes
of this Plan.
14.1
14.05 Notice of Change in Terms. The Plan Administrator, within the time prescribed by
applicable law, must furnish all Participants and Beneficiaries a summary plan description and all
other information required by applicable law.
14.06 Litigation Against the Trust. A court of competent jurisdiction may authorize any
appropriate equitable reliefto enforce any provisions of applicable law or the terms of the Plan. A
fiduciary may receive reimbursement of expenses properly and actually incurred in the performance
of his duties with the Plan.
14.07 Information Available. Any Participant in the Plan or any Beneficiary may examine
copies of the plan description, this Plan and Trust, or any other instrument under which the Plan was
established or is operated. The Plan Administrator will maintain all of the items listed in this Section
14.07 in his office, or in such other place or places as he may designate from time to time, for
examination during reasonable business hours. Upon the written request of a Participant or
Beneficiary the Plan Administrator must furnish him with a copy of any item listed in this Section
14.07. The Plan Administrator may make a reasonable charge to the requesting person for the copy
so furnished.
14.08 Appeal Procedure for Denial of Benefits. A Participant or a Beneficiary ("Claimant")
may file with the Retirement Committee a written claim for benefits, if the Participant or Beneficiary
determines the distribution procedures of the Plan have not provided him his proper Nonforfeitable
Accrued Benefit. The Retirement Committee must render a decision on the claim within 60 days
of the Claimant's written claim for benefits.
(A) Notice of Denial. The Plan Administrator must provide adequate notice in writing to any
Participant or to any Beneficiary ("Claimant") whose claim for benefits under the Plan the
Retirement Committee has denied. The Plan Administrator's notice of denial of benefits must
identify the name of each member of the Retirement Committee and the name and address of the
Retirement Committee member to whom the claimant may forward his appeal. The Plan
Administrator's notice to the Claimant must also set forth:
(1) The specific reason for the denial;
(2) Specific references to pertinent Plan provisions on which the Retirement Committee
based its denial;
(3) A description of any additional material and information needed for the Claimant to
perfect his claim and an explanation of why the material or information is needed; and
(4) That any appeal the Claimant wishes to make of the adverse determination must be
in writing to the Retirement Committee within 75 days after receipt of the Plan
Administrator's notice of denial of benefits. The Plan Administrator's notice must further
advise the Claimant that his failure to appeal the action to the Retirement Committee in
writing within the 75-day period will render the Retirement Committee's determination final,
binding and conclusive.
14.2
(B) Appeal. If the Claimant should appeal to the Retirement Committee, he, or his duly
authorized representative, may submit, in writing, whatever issues and comments he, or his duly
authorized representative, feels are pertinent. The Claimant, or his duly authorized representative,
may review pertinent Plan documents. The Retirement Committee will re-examine all facts related
to the appeal and make a final determination as to whether the denial of benefits is justified under
the circumstances. The Retirement Committee must advise the Claimant of its decision within 60
days of the Claimant's written request forreview, unless special circumstances (such as a hearing)
would make the rendering of a decision within the 60-day limit unfeasible, but in no event may the
Retirement Committee render a decision respecting a denial for a claim for benefits later than 120
days after its receipt of a request for review.
* * * * * * * * * * * * * * *
14.3
ARTICLE XV - RETIREMENT COMMITTEE - DUTIES WITH RESPECT TO
P ARTICIP ANTS' ACCRUED BENEFITS
15.01 Members' Compensation, Expenses. The Employer must appoint an Retirement
Committee to administer the Plan, the members of which mayor may not be Participants in the Plan,
or which may be the Plan Administrator acting alone. In the absence of an Retirement Committee
appointment, the Plan Administrator assumes the powers, duties and responsibilities of the
Retirement Committee. The members of the Retirement Committee will serve without compensation
for services as such, but the Employer will pay all expenses of the Retirement Committee, except
to the extent the Trust properly pays the expenses, pursuant to Article XVI.
15.02 Term. Each member of the Retirement Committee serves until the appointment of his
successor.
15.03 Powers. In case of a vacancy in the membership of the Retirement Committee, the
remaining members ofthe Retirement Committee may exercise any and all of the powers, authority,
duties and discretion conferred upon the Retirement Committee pending the filling of the vacancy.
15.04 General.
(A) Powers and duties. The Retirement Committee has the following powers and duties:
(1) To select a Secretary, who need not be a member of the Retirement Committee;
(2) To determine the rights of eligibility of an Employee to participate in the Plan, the
value of a Participant's Accrued Benefit and the Nonforfeitable percentage of each
Participant's Accrued Benefit;
(3) To adopt rules of procedure and regulations necessary for the proper and efficient
administration of the Plan provided the rules are not inconsistent with the terms of this
Agreement;
(4) To construe and enforce the terms of the Plan and the rules and regulations it adopts
including interpretation of the Plan documents and documents related to the Plan's operation
and the discretion to make factual determinations necessary to the proper administration of
the Plan;
(5) To direct the Trustee as respects the crediting and distribution of the Trust;
(6) To review and render decisions respecting a claim for (or denial of a claim for) a
benefit under the Plan;
(7) To furnish the Employer with information which the Employer may require for tax
or other purposes;
15.1
(8) To engage the service of agents whom it may deem advisable to assist it with the
performance of its duties;
(9) To engage the services of an Investment Manager or Managers, each of whom will
have full power and authority to manage, acquire or dispose (or direct the Trustee with
respect to acquisition or disposition) of any Plan asset under its control;
(10) To establish and maintain a funding standard account and to make credits and charges
to the account to the extent required by and in accordance with the provisions of the
applicable law.
The Retirement Committee will exercise all of its powers, duties and discretion under the
Plan in a uniform and nondiscriminatory manner.
15.05 Funding Policy. The Retirement Committee will review, not less often than annually,
all pertinent Employee information and Plan data in order to establish the funding policy of the Plan
and to determine the appropriate methods of carrying out the Plan's objectives. The Retirement
Committee must communicate periodically, as it deems appropriate, to the Trustee and to any Plan
Investment Manager the Plan's short-term and long-term financial needs so investment policy can
be coordinated with Plan financial requirements.
15.06 Manner of Action. The decision of a majority of the members appointed and qualified
controls.
15.07 Authorized Representative. The Retirement Committee may authorize anyone
of its members, or its Secretary, to sign on its behalf any notices, directions, applications, certificates,
consents, approvals, waivers, letters or other documents. The Retirement Committee must evidence
this authority by an instrument signed by all members and filed with the Trustee.
15.08 Interested Member. No member of the Retirement Committee may decide or
determine any matter concerning the distribution, nature or method of settlement of his own benefits
under the Plan, except in exercising an election available to that member in his capacity as a
Participant, unless the Plan Administrator is acting alone in the capacity of the Retirement
Committee.
15.09 Participant Records. The Retirement Committee will keep such records and will
prepare such reports concerning Participants' Accrued Benefits as applicable law and the Code
require. Upon a Participant's written request, the Retirement Committee will furnish, or will direct
the Plan Administrator to furnish, the Participant such information.
15.10 Unclaimed Accrued Benefit - Procedure. The Plan does not require either the Trustee
or the Retirement Committee to search for, or ascertain the whereabouts of, any Participant or
Beneficiary. At the time the Participant's or Beneficiary's benefit becomes distributable under the
Plan, the Retirement Committee, by certified or registered mail addressed to his last known address
of record with the Retirement Committee or the Employer, must notify any Participant, or
Beneficiary, that he is entitled to a distribution under this Plan. The notice must quote the provisions
15.2
of this Section 15.10 and otherwise must comply with the notice requirements of Article X. If the
Participant, or Beneficiary, fails to claim his distributive share or make his whereabouts known in
writing to the Retirement Committee within 6 months from the date of mailing of the notice, the
Retirement Committee will treat the Participant's or Beneficiary's unclaimed payable Accrued
Benefit as forfeited. The Employer will use the amounts representing the forfeited Accrued Benefit
to reduce its contribution for future Plan Years.
If a Participant or Beneficiary who has incurred a forfeiture of his Accrued Benefit under this
Section 15.10 makes a claim, at any time, for his forfeited Accrued Benefit, the Retirement
Committee must restore the Participant's or Beneficiary's forfeited Accrued Benefit. The Retirement
Committee must direct the Trustee to distribute the Participant's or Beneficiary's restored Accrued
Benefit as soon as administratively practicable following restoration of the forfeited Accrued Benefit,
subject to the consent requirements of Article X.
* * * * * * * * * * * * * * *
15.3
ARTICLE XVI - TRUSTEE, POWERS AND DUTIES
16.01 Acceptance. The Trustee accepts the Trust created under the Plan and agrees to
perform the obligations imposed.
16.02 Receipt of Contributions. The Trustee is accountable to the Employer for the funds
contributed to it by the Employer, but does not have any duty to see that the contributions received
comply with the provisions ofthe Plan. The Trustee is not obliged to collect any contributions from
the Employer, nor is obliged to see that funds deposited with it are deposited according to the
provisions of the Plan.
16.03 Investment Powers.
(A) Trustee Powers. The Trustee has full discretion and authority with regard to the investment
of the Trust Fund, except with respect to a Plan asset under the control or direction of a properly
appointed Investment Manager. The Trustee must coordinate its investment policy with Plan
financial needs as communicated to it by the Retirement Committee.
(1) Investment Powers. The Trustee is authorized and empowered, but not by way of
limitation, with the following powers, rights and duties:
(a) To invest any part or all of the Trust Fund in any common or preferred stocks,
open-end or closed-end mutual funds (including mutual funds for which the Trustee
or its affiliate serves as an investment advisor, sponsor, distributor, custodian,
transfer agent, administrator, registrar in any other capacity), put and call options
traded on a national exchange, United States retirement plan bonds, corporate bonds,
debentures, convertible debentures, commercial paper, U.S. Treasury bills, U.S.
Treasury notes and other direct or indirect obligations of the United States
Government or its agencies, improved or unimproved real estate situated in the
United States, limited partnerships, insurance contracts of any type, mortgages, notes
or other property of any kind, real or personal, to buy or sell options on common
stock on a nationally recognized exchange with or without holding the underlying
common stock, to buy and sell commodities, commodity options and contracts for
the future delivery of commodities, and to make any other investments the Trustee
deems appropriate, as a prudent man would do under like circumstances with due
regard for the purposes of this Plan. Any investment made or retained by the Trustee
in good faith is proper but must be of a kind constituting a diversification considered
by law suitable for trust investments.
(b) To retain in cash so much of the Trust Fund as it may deem advisable to
satisfy liquidity needs of the Plan and to deposit any cash held in the Trust Fund in
a bank account at reasonable interest.
(c) To invest, ifthe Trustee is a bank or similar financial institution supervised
16.1
by the United States or by a State, in any type of deposit of the Trustee (or of a bank
related to the Trustee within the meaning of Code ~414(b)) at a reasonable rate of
interest or in a common trust fund, as described in Code ~584, or collective
investment fund, the provisions of which govern the investment of such assets and
which the Plan incorporates by this reference which the Trustee (or its affiliate, as
defined in Code ~1504) maintains exclusively for the collective investment of money
contributed by the bank (or the affiliate) in its capacity as trustee and which conforms
to the rules of the Comptroller of the Currency.
(d) To manage, sell, contract to sell, grant options to purchase, convey, exchange,
transfer, abandon, improve, repair, insure, lease for any term even though
commencing in the future or extending beyond the term of the Trust, and otherwise
deal with all property, real or personal, in such manner, for such considerations and
on such terms and conditions as the Trustee decides.
(e) To credit and distribute the Trust as directed by the Retirement Committee.
The Trustee is not obliged to inquire as to whether any payee or distributee is entitled
to any payment or whether the distribution is proper or within the terms of the Plan,
or as to the manner of making any payment or distribution. The Trustee is
accountable only to the Retirement Committee for any payment or distribution made
by it in good faith on the order or direction of the Retirement Committee.
(t) To borrow money, to assume indebtedness, extend mortgages and encumber
by mortgage or pledge.
(g) To compromise, contest, arbitrate or abandon claims and demands, in its
discretion.
(h) To have with respect to the Trust all of the rights of an individual owner,
including the power to give proxies, to participate in any voting trusts, mergers,
consolidations or liquidations, and to exercise or sell stock subscriptions or
conversion rights.
(i) To lease for oil, gas and other mineral purposes and to create mineral
severances by grant or reservation; to pool or unitize interests in oil, gas and other
minerals; and to enter into operating agreements and to execute division and transfer
orders.
(j) To hold any securities or other property in the name of the Trustee or its
nominee, with depositories or agent depositories or in another form as it may deem
best, with or without disclosing the trust relationship.
(k) To perform any and all other acts in its judgment necessary or appropriate for
the proper and advantageous management, investment and distribution of the Trust.
16.2
(I) To retain any funds or property subject to any dispute without liability for the
payment of interest, and to decline to make payment or delivery of the funds or
property until final adjudication is made by a court of competent jurisdiction.
(m) To file all tax returns required of the Trustee.
(n) To furnish to the Employer, the Plan Administrator and the Retirement
Committee an annual statement of account showing the condition of the Trust Fund
and all investments, receipts, disbursements and other transactions effected by the
Trustee during the Plan Year covered by the statement and also stating the assets of
the Trust held at the end of the Plan Year, which accounts are conclusive on all
persons, including the Employer, the Plan Administrator and the Retirement
Committee, except as to any act or transaction concerning which the Employer, the
Plan Administrator or the Retirement Committee files with the Trustee written
exceptions or objections within 90 days after the receipt of the accounts or for which
applicable law authorizes a longer period within which to object.
(0) To begin, maintain or defend any litigation necessary in connection with the
administration of the Plan, except that the Trustee is not obliged or required to do so
unless indemnified to its satisfaction.
(B) Participant Loans. This Plan does not permit loans to Participants or to Beneficiaries.
16.04 Records and Statements. The records of the Trustee pertaining to the Plan must be
open to the inspection of the Plan Administrator, the Retirement Committee and the Employer at all
reasonable times and may be audited from time to time by any person or persons as the Employer,
Plan Administrator or Retirement Committee may specify in writing. The Trustee must furnish the
Plan Administrator or Retirement Committee with whatever information relating to the Trust Fund
the Plan Administrator or Retirement Committee considers necessary.
l6.05 Fees and Expenses From Fund. The Trustee will receive reasonable annual
compensation as may be agreed upon from time to time between the Employer and the Trustee. No
person who is receiving full pay from the Employer may receive compensation for services as
Trustee. The Trustee will pay from the Trust Fund all fees and expenses reasonably incurred by the
Plan, to the extent such fees and expenses are for the ordinary and necessary administration and
operation of the Plan, unless the Employer pays the fees and expenses. Any fee or expense paid,
directly or indirectly, by the Employer is not an Employer contribution to the Plan, provided the fee
or expense relates to the ordinary and necessary administration of the Fund.
16.06 Parties to Litigation. Except as otherwise provided by applicable law, no Participant,
or Beneficiary is a necessary party or is required to receive notice of process in any court proceeding
involving the Plan, the Trust Fund or any fiduciary of the Plan. Any final judgment entered in any
16.3
proceeding will be conclusive upon the Employer, the Plan Administrator, the Retirement
Committee, the Trustee, Participants and Beneficiaries.
16.07 Professional Agents. The Trustee may employ and pay from the Trust Fund
reasonable compensation to agents, attorneys, accountants and other persons to advise the Trustee
as in its opinion may be necessary. The Trustee may delegate to any agent, attorney, accountant or
other person selected by it any non-Trustee power or duty vested in it by the Plan, and the Trustee
may act or refrain from acting on the advice or opinion of any agent, attorney, accountant or other
person so selected.
16.08 Distribution Directions. The Trustee may make distribution under the Plan in cash
or property, or partly in each, at its fair market value as determined by the Trustee. For purposes of
a distribution to a Participant or to a Participant's designated Beneficiary or surviving spouse,
"property" includes a Nontransferable Annuity Contract, provided the contract satisfies the
requirements of this Plan. If no one claims a payment or distribution made from the Trust, the
Trustee must promptly notify the Retirement Committee and then dispose of the payment in
accordance with the subsequent direction of the Retirement Committee.
16.09 Third Party/Multiple Trustees. No person dealing with the Trustee is obligated to see
to the proper application of any money paid or property delivered to the Trustee, or to inquire
whether the Trustee has acted pursuant to any of the terms of the Plan. Each person dealing with the
Trustee may act upon any notice, request or representation in writing by the Trustee, or by the
Trustee's duly authorized agent, and is not liable to any person in so acting. The certificate of the
Trustee that it is acting in accordance with the Plan will be conclusive in favor of any person relying
on the certificate. If more than two persons act as Trustee, a decision of the majority of such persons
controls with respect to any decision regarding the administration or investment of the Trust Fund
or any portion of the Trust Fund with respect to which such persons act as Trustee. However, the
signature of only one Trustee is necessary to effect any transaction on behalf of the Trust.
16.10 Resignation. The Trustee may resign its position at any time by giving 30 days
written notice in advance to the Employer and to the Retirement Committee. If the Employer fails
to appoint a successor Trustee within 60 days of its receipt of the Trustee's written notice of
resignation, the Trustee will treat the Employer as having appointed itself as Trustee and as having
filed its acceptance of appointment with the former Trustee.
16.11 Removal. The Employer, by giving 30 days written notice in advance to the Trustee,
may remove any Trustee. In the event of the resignation or removal of a Trustee, the Employer must
appoint a successor Trustee if it intends to continue the Plan. If two or more persons hold the
position of Trustee, in the event of the removal of one such person, during any period the selection
of a replacement is pending, or during any period such person is unable to serve for any reason, the
remaining person or persons will act as the Trustee.
16.12 Interim Duties and Successor Trustee. Each successor Trustee succeeds to the title
to the Trust vested in his predecessor by accepting in writing his appointment as successor Trustee
16.4
and by filing the acceptance with the former Trustee and the Retirement Committee without the
signing or filing of any further statement. The resigning or removed Trustee, upon receipt of
acceptance in writing of the Trust by the successor Trustee, must execute all documents and do all
acts necessary to vest the title of record in any successor Trustee. Each successor Trustee has and
enjoys all of the powers, both discretionary and ministerial, conferred under this Agreement upon
his predecessor. A successor Trustee is not personally liable for any act or failure to act of any
predecessor Trustee, except as required under applicable law. With the approval of the Employer and
the Retirement Committee, a successor Trustee, with respect to the Plan, may accept the account
rendered and the property delivered to it by a predecessor Trustee without incurring any liability or
responsibility for so doing.
16.13 Valuation of Trust. The Trustee must value the Trust Fund as of each Accounting
Date to determine the fair market value of the assets in the Trust. The Trustee also must value the
Trust Fund on such other dates as directed in writing by the Retirement Committee.
16.14 Limitation on Liability - If Investment Manager or Independent Fiduciary Appointed.
The Trustee is not liable for the acts or omissions of any Investment Manager the Retirement
Committee may appoint, nor is the Trustee under any obligation to invest or otherwise manage any
asset of the Plan which is subject to the management of a properly appointed Investment Manager.
In addition, any Investment Manager appointed by the Retirement Committee shall have the sole
responsibility for voting proxies for those assets of the Plan that it manages. The Retirement
Committee, the Trustee and any properly appointed Investment Manager may execute a letter
agreement as a part of this Plan delineating the duties, responsibilities and liabilities of the
Investment Manager with respect to any part of the Trust Fund under the control of the Investment
Manager.
16.15 Investment in Group Trust Fund / Combined Trust. At the Employer's discretion, the
Trustee, for collective investment purposes, may combine into one trust fund the Trust created under
this Plan with the Trust created under any other qualified retirement plan the Employer maintains.
However, the Trustee must maintain separate records of account for the assets of each Trust in order
to reflect properly each Participant's Accrued Benefit under the planes) in which he is a Participant.
* * * * * * * * * * * * * * *
16.5
ARTICLE XVII - INVESTMENT IN INSURANCE OR ANNUITY CONTRACTS
17.01 Purchase of Life Insurance and Annuity Contracts. The Plan does not provide
incidental life insurance benefits for Participants.
* * * * * * * * * * * * * * *
17.1
ARTICLE XVIII - MISCELLANEOUS
18.01 Evidence. Anyone required to give evidence under the terms of the Plan may do so
by certificate, affidavit, document or other information which the person to act in reliance may
consider pertinent, reliable and genuine, and to have been signed, made or presented by the proper
party or parties. Both the Retirement Committee and the Trustee are fully protected in acting and
relying upon any evidence described under the immediately preceding sentence.
18.02 No Responsibility for Employer Action. Neither the Trustee nor the Retirement
Committee has any obligation or responsibility with respect to any action required by the Plan to be
taken by the Employer, any Participant or eligible Employee, or for the failure of any of the above
persons to act or make any payment or contribution, or to otherwise provide any benefit
contemplated under this Plan. Furthermore, the Plan does not require the Trustee or the Retirement
Committee to collect any contribution required under the Plan, or to determine the correctness of the
amount of any Employer contribution. Neither the Trustee nor the Retirement Committee need
inquire into or be responsible for any action or failure to act on the part of the others, or on the part
of any other person who has any responsibility regarding the management, administration or
operation of the Plan, whether by the express terms of the Plan or by a separate agreement authorized
by the Plan or by the provisions of applicable law.
18.03 Fiduciaries Not Insurers. The Trustee, the Retirement Committee, the Plan
Administrator and the Employer do not guarantee, to any extent, the Trust Fund from loss or
depreciation. The Employer does not guarantee the payment of any money which may be or becomes
due to any person from the Trust Fund. The liability of the Retirement Committee and the Trustee
to make any payment from the Trust Fund at any time and all times is limited to the then available
assets of the Trust.
18.04 Waiver of Notice. Any person entitled to notice under the Plan may waive the notice,
unless applicable law specifically or impliedly prohibits such a waiver.
18.05 Successors. The Plan is binding upon all persons entitled to benefits under the Plan,
their respective heirs and legal representatives, upon the Employer, its successors and assigns, and
upon the Trustee, the Retirement Committee, the Plan Administrator and their successors.
18.06 Word Usage. Words used in the masculine also apply to the feminine where
applicable, and wherever the context of the Employer's Plan dictates, the plural includes the singular
and the singular includes the plural.
18.07 State Law. Florida law will determine all questions arising with respect to the
provisions of this Agreement.
18.08 Employment Not Guaranteed. Nothing contained in this Plan, or with respect to the
establishment of the Trust, or any modification or amendment to the Plan or Trust, or in the creation
of any Account, or the payment of any benefit, gives any Employee, Employee-Participant or any
18.1
Beneficiary any right to continue employment, any legal or equitable right against the Employer, or
Employee of the Employer, or against the Trustee, or its agents or employees, or against the Plan
Administrator, except as expressly provided by the Plan, the Trust, by a separate agreement or by
applicable law.
* * * * * * * * * * * * * * *
18.2
ARTICLE XIX - EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
19.01 Exclusive Benefit. Except as provided under Article III and Article XII, the Employer
has no beneficial interest in any asset of the Trust and no part of any asset in the Trust may ever
revert to or be repaid to an Employer, either directly or indirectly; nor prior to the satisfaction of all
liabilities with respect to the Participants and their Beneficiaries under the Plan, may any part of the
corpus or income of the Trust Fund, or any asset of the Trust, be (at any time) used for, or diverted
to, purposes other than the exclusive benefit of the Participants or their Beneficiaries. However, if
the Commissioner of Internal Revenue, upon the Employer's request for initial approval of this Plan,
determines that the Trust created under the Plan is not a qualified trust exempt from Federal income
tax, then (and only then) the Trustee, upon written notice from the Employer, will return the
Employer's contributions (and increment attributable to the contributions) to the Employer. The
Trustee must make the return ofthe Employer contribution under this Section 19.01 within one year
of a final disposition of the Employer's request for initial approval of the Plan. The Employer's Plan
and Trust will terminate upon the Trustee's return of the Employer's contributions.
19.02 Amendment By Employer.
(A) Amendment of Plan. The Employer has the right at any time and from time to time:
(1) To amend this Agreement in any manner it deems necessary or advisable in order to
qualify (or maintain qualification of) this Plan and the Trust created under it under the
provisions ofthe Code ~401(a); and
(2) To amend this Agreement in any other manner.
No amendment may authorize or permit any of the Trust Fund (other than the part which is
required to pay administration expenses) to be used for or diverted to purposes other than for the
exclusive benefit of the Participants or their Beneficiaries or estates. No amendment may cause or
permit any portion of the Trust Fund to revert to or become the property of the Employer. The
Employer also may not make any amendment which affects the rights, duties or responsibilities of
the Trustee, the Plan Administrator or the Retirement Committee without the written consent of the
affected Trustee, the Plan Administrator or the affected member of the Retirement Committee. The
Employer must make all amendments in writing. Each amendment must state the date to which it
is either retroactively or prospectively effective.
19.03 Discontinuance. The Employer has the right, at any time, to suspend or discontinue
its contributions under the Plan, and to terminate, at any time, this Plan and the Trust created under
this Agreement. The Plan will terminate upon the first to occur of the following:
(a) The date terminated by action of the Employer; or
(b) The dissolution or merger of the Employer, unless the successor makes provision to
continue the Plan, in which event the successor must substitute itself as the Employer under
19.1
this Plan. Any termination of the Plan resulting from this paragraph (b) is not effective until
compliance with any applicable notice requirements.
19.04 Full Vesting on Termination. Upon either full or partial termination of the Plan, an
affected Participant's right to his Accrued Benefit is 100% Nonforfeitable, irrespective of the
Nonforfeitable percentage which otherwise would apply under Article VIII.
19.05 Termination.
(A) Procedure. Upon termination of the Plan, in order to liquidate the Trust, the Retirement
Committee shall either direct the Trustee to:
(a) distribute the present value of the Nonforfeitable Accrued Benefit of each Participant
in one lump sum; or
(b) distribute the Nonforfeitable Accrued Benefit of the Participants by purchasing a
deferred annuity contract for each Participant; or
(c) directly transfer the present value of the Nonforfeitable Accrued Benefit of each
Participant to another retirement plan described in Code ~401 (a); or
(d) utilize any combination of the methods referenced in clauses (a), (b) or (c) above, as
determined in the sole discretion of the Retirement Committee.
The Retirement Committee, shall by resolution, specify the method ofliquidating the Trust
upon termination of the Plan. The Trust will continue until the Trustee in accordance with the
direction of the Retirement Committee has distributed all of the benefits under the Plan.
(B) Freezing Plan/Mergers or Transfers. A resolution or amendment to freeze all future benefit
accrual but otherwise to continue maintenance of this Plan, is not a termination for purposes of this
Section 19.05. Furthermore, a merger or direct transfer described in Section 11.05 of the Plan is not
a termination for purposes ofthe special distribution provisions described in Section 19.05(A).
19.2
ARTICLE A
APPENDIX TO PLAN AND TRUST AGREEMENT
USERRA Model Amendment
Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be provided in accordance with Code S414(u).
19.3
IN WITNESS WHEREOF, the Employer and the Trustee have executed this Plan and Trust
, as modified herein, in Winter Springs, Florida this day of
2002.
EMPLOYER:
CITY OF WINTER SPRINGS
By:
Print
Print
Its
TRUSTEE:
BOARD OF TRUSTEES OF THE
CITY OF WINTER SPRINGS
By:
Print
Print
Its
19.4
CITY OF WINTER SPRINGS
MINUTES
BOARD OF TRUSTEES - PENSION PLAN
SPECIAL MEETING
NOVEMBER 26, 2002
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I. CALL TO ORDER
The Board of Trustees - Pension Plan Special Meeting was called to order by Vice
Chairman Vernon Rozelle, on Tuesday, November 26, 2002 at 7:36 p.m. in the West
Conference Room of the Municipal Building (City Hall, 1126 East State Road 434,
Winter Springs, Florida 32708).
Roll Call:
Chairman Robert Nippes, absent
Vice Chairman Vernon Rozelle, present
Board Member Vincent Giannoni, present
Board Member Mark Lammert, present
Board Member Mark Queen, absent
II. REGULAR
REGULAR
A. Review Of Revised Plan Document.
Ms. Louise Frangou1, Finance Department Director, introduced the Agenda Item. Ms.
Frangoul spoke of the Summary of Retirement Plan Changes, the proposed Resolution
and the final version [November 21, 2002] of the Defined Benefit Plan and Trust for
Employees of the City of Winter Springs. Ms. Frangoul explained, "There really was one
(1) main change [from the November 7,2002 Plan Document) - which was 8.05 and - the
other post it notes are basically just referring to that Section 8.05."
Mr. Donald D. Chapman, E.A., Retirement Plan Specialist, Inc., Post Office Box 622857,
Oviedo, Florida: explained that the change involved th~ esting of employee
contributions, and the way it was put together originally was that they were one hundred
percent (100%) vested and could receive it upon termination which was not the intent as
to how the Plan was designed. It was designed so that when the Plan became a Defined
Benefit Plan effective October 1 of 2000 the monies that had been previously in the
Money Purchase Plan were to become available if they terminated and they could receive
that by election. If they received it by election it also reduced the amount of ultimate
benefit they'd be entitled to when they reached retirement. As far as contribution after
October 1st of2000, they're all to stay in the Plan, invest one hundred percent (100%) for
them but not payable or received until they actually reach retireI!1ent. One of the reasons
it was put in that way was to keep the Plan solvent so that we wouldn't see a lot of the
CITY OF WINTER SPRINGS
MINUTES
BOARD OF TRUSTEES - PENSION PLAN
SPECIAL MEETING - NOVEMBER 26, 2002
PAGE20F3
assets go all out if people started terminating and immediately receive it. So it was really
for the solvency of the Plan it was done that way."
Discussion.
Referring to the proposed Resolution Ms. Frangoul said, "As we go through the
Resolution it is basically incorporating those changes that are in this Plan - from the 7111
version which changed here, on page 10, - we just made a reference to this Section 8.05
that we have changed." Mr. Chapman said, "That one liner there - basically it says that
if they do decide to take their own money out that was in the Money Purchase Plan, the
ultimate benefit is adjusted by what they received. It's actuarially done."
Ms. Frangoul reviewed the changes in the Defined Benefit Plan and Trust for Employees
of the City of Winter Springs by referring "To page 4.2 which is a reference to Section
8.05, a change from the 11/7 version. Page 8.1 is that Section 8.05 that we have been
talking about and page 8.2 is the remaining portion of 8.05."
Discussion.
MOTION BY BOARD MEMBER LAMMERT. "I MOVE THAT THE TRUSTEE
BOARD ACCEPT THE RESOLUTION AS WRITTEN DATED NOVEMBER 21,
2002." SECONDED. DISCUSSION. WITH CONSENSUS OF THE BOARD, THE
MOTION WAS APPROVED.
MOTION CARRIED.
Ms. Frangou1 mentioned that the Plan Document will be gOIng before the City
Commission on December 9,2002.
III. ADJOURNMENT
Vice Chairman Rozelle asked, "Do I have a Motion for Adjournment?"
MOTION BY BOARD MEMBER GIANNONI. "MOTION TO ADJOURN."
SECONDED BY BOARD MEMBER LAMMERT. DISCUSSION. WITH
CONSENSUS OF THE BOARD, THE MOTION WAS APPROVED.
MOTION CARRIED.
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CITY OF WINTER SPRINGS
MINUTES
BOARD OF TRUSTEES - PENSION PLAN
SPECIAL MEETING - NOVEMBER 26, 2002
PAGE30F3
Vice Chairman Rozelle adjourned the Meeting at 8:00 p.m.
RESPECTFULLY SUBMITTED:
DEBBIE GILLESPIE
DEPUTY CITY CLERK
S:\dept- City Clerk\Boards and Committees\Board of Trustees\lIl1\Draft Minutes\2002\112602 SPECIAL.doc
NOTE: These Minutes were approved at the
, 2003 Board of Trustees-Pension Plan Meeting.
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.~ Retire1lllllent Plan Specialists, Inc.
Employee Benefits Administrators & Consultants
2 Lawn Street
P. O. Box 621582
Oviedo, Florida 32762-1582
407-365-3490 (office)
407-366-5154 (fax)
1-800-618-1813 (toll/ree)
July 11, 2000
Visit liS at .www.srtllrner.com
Ron McLemore
City of Winter Springs
1126 East State Road 434
Winter Springs, FL 32708
RE: City of WirJter Springs Defined Benefit Pension Plan
Dear Ron:
This letter is in reference to your inquiry on the cost of adding or changing the following
features of the above plan, proposed as of 10/01/00. (2% per year of service up to 10/01/00
plus 3% per year of service thereafter up to 30 years.)
1. The additional costs for changing the above plan's formula from a fixed 30 years of service
beginning with date of hire to a "floating" 30 years of service computed retroactively from date
of retirement is 1/2% of payroll. This cost can be either the city's or the employee's.
2. The death benefit provisions of the plan currently give the spouse a "survivor" benefit.
There is no cash out feature (lump-sum distribution) to any participants or their beneficiaries.
In computing the actuarial costs for the plan, we used a pre-retirement mortality table. This is
in line with the assumptions recommended by the state and used by the state police and
firemen plans. Including a death benefit lump-sum payment feature will increase the cost of
the plan substantially and is not recommended. A death benefit payable equal to the
employee's benefit purchased with employee contributions is possible, if this would keep the
employees happy. You could use just the employee mandatory account as of date of
conversion or a value that is update each with year with additional contributions plus interest.
One note: This is not a life insurance policy for beneficiaries. It is a retirement plan for city
employees.
3. In reviewing termination benefits to participants, you might want to consider payouts of
amounts for benefits valued at less than $3,500.00 or $5,000.00. This is to prevent keeping
participants with small benefit payments on the plan records for many years. It is not
recommended to payout the employee purchased benefit as a termination benefit because
this is not a savings account for the employee. They are contributing to their retirement along
with the city. The majority of terminees requesting benefit payments from the money
purchase pension plan have been cashing in their accounts, not rolling them over to an IRA.
This has been the case even when the account balances are quite large. This was not the
intent of the program when established. It is also a concern employees might "quit" just to get
access to funds, once the amount is large enough.
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We hope this will help clarify some issues raised in the plan design features. We realize many
participants like having an "account balance" they can get in cash at some point in the future.
The basic question becomes "what is/are the goals of the retirement plan?". It is possible to
add death benefit features, termination cash features, but they come at a cost the city or the
employees may not be willing or able to bear at this time. If the goal of the retirement program
is retirement benefits, limiting access to funds except as noted above is recommended.
If you need assistance or have any questions, please give us a call.
Sincerely,
Sandra R. Turner, CPC QPA
cc: Richard E. Burke, Esq.
Donald Chapman, E.A.
,
'. Retirement Plan
Specialists, Inco
Employee Benefits Administrators & Consultants
2 Lawn Street
P.O. Box 621582
Oviedo, Florida 32762-1582
Visit liS at www.srtllmer.com
407-365-3490 (office)
407-366-5154 (fax)
1-800-618-1813 (tollfree)
February 28, 2000
Ron McLemore
City of Winter Springs
1126 East State Road 434
Winter Springs, FL 32708
RE: City of Winter Springs Retirement Plans
Dear Ron:
Attached you will find two sets of studies. The first study is the increase in costs for benefits
based upon the employee census and assets information as of September 30, 1999. As you
can see from the attached, the most efficient plan for increasing benefits is Plan e, the defined
benefit plan with the assets of the money purchase pension plan rolled into it.
I wanted to review the liabilities of the program futuristically as well. The second set of studies
exams the relationship of costs between the programs including all employees currently
employed, all salar:es annualized and projected at a cost of living of 3%. As you can see,
again, plan E is the most effective plan for providing an increase in benefits.
You will note Plan A also shows an increase in benefits from the current 10% program in the
forecasting models Part of the increase is due to the lack of an underlying accountant balance
in the money purchase pension plan for the included in this study but not yet eligible
employees. However, we are examing the study to ascertain if any other factors are involved
in producing increased costs, such as the rate of return on assets as of 9/30/99, etc. We will
be following up with you on this portion of the review shortly.
It is our recommendation to combine the plans to one defined benefit plan and increase the %
of service from 2% to 3% from 10/01/99 on (2% from date of hire to 10/01/99). (If you do it on
10/01/2000 you will have problems with people who have retired during this year). We feel
moving the money purchase pension plan money to a participant directed account (as under
ICMA) and using that to offset the defined benefit plan will be highly volatile. With all funds
under one plan, you can then implement lump sum provisions ( if so desired). The program
will also become extremely easier to provide legal documentation for and explain to the
employees. It will also accomplish the increase in benefits so desired by the unions. This can
be accomplished with no increase in the current 10% of compensation being deposited into
the plan. We do not recommend doing it for less than 10% until the currently ongoing review
of employee dynamics is completed.
Sincerely,
Sandra R. Turner CPC QPA
... ~.' ,.".'.
"
CITY OF WINTER SPRINGS DEFINED BENEFIT PENSION PLAN
COSTS OF BENEFIT INCREASE
For Purposes of this Study:
Employee Compensation Fire Department Pollee DlJpartment Remaining Depts Total Compensation MPP6% DB Cost-4%
$1,251,833.60 $1,535,909.23 $2,523,283.37 $5,311,026.20 $318,661.57 $212,441.05
40 amortization 10 amortization DB Cost-40 yr DB Cost-10yr Total Cost-40 Total Cost.10 Increase-40 Increase-10
Initial Unfunded Yearly Cost of Past Service of Past Service % of Comp "I. of Comp % of Comp % of Comp % of Comp "I. of Camp
over current plan
A Current Plan
Fire Department $335,363.77 $57,220.84 $88,614.06 $109,841.51 7.08% 8.77% 13.08% 14.77%
Police Department $128,078.67 $70,205.79 $82,195.19 $90,302.14 5.35% 5.88% 11.35% 11.88%
City Wide $936,724.69 $115,338.37 $203,024.75 $262,316.35 8.05% 10.40% 14.05% 16.40%
Total $1,400,167.13 $242,765.00 $373,834.00 $462,460.00 7.04% 8.71% 13.04% 14.71%
B Proposed Plan Design
Increase In Contribution DB only
3% up to 30 years
Fire Department $332,202.79 $184,597.05 $215,694.39 $236.721.77 17.23% 18.91% 23.23% 24.91% 10.15% 10.14%
Police Department $147,792.90 $226,487.24 $240,322.06 $249,676.88 15.65% 16.26% 21.65% 22.26% 10.30% 10.38%
City Wide $920,171.44 $387,459.71 $473,596.55 $531,840.35 18.77% 21.08% 24.77% 27.08% 10.72% 10.68%
Total $1,400.167.13 . $798,544.00 $929,613.00 $1,018,239.00 17.50% 19.17% . 23.50% 25.17% 10.46% 10.46%
C 2% per year of service to 10/01/99
plus 3% up to 30 years total
Fire Department $334,594.71 $94,356.79 $125,678.04 $146,856.78 10.04% 11.73% 16.04% 17.73% 2.96% 2.96%
Police Department $155,073.39 $115,769.02 $130,285.34 $140,101.00 8.48% 9.12% 14.48% 15.12% 3.13% 3.24%
City Wide $910,499.03 $190,192.19 $275,423.62 $333,055.22 10.92% 13.20% 16.92% 19.20% 2.87% 2.80%
Total $1,400,167.13 $400,318.00 $531,387.00 $620,013.00 10.01% 11.67% 16.01% 17.67% 2.97% 2.97%
Proposed Plan Design. DB Only
No Money Purchase Plan
D 3% up to 30 years
Rre Department $0.00 $245,705.14 $245,705.14 $245,705.14 19.63% 19.63% 19.63% 19.63% 6.55% 4.86%
Police Department $0.00 $301,462.43 $301,462.43 $301,462.43 19.63% 19.63% 19.63% 19.63% 8.28% 7.75%
City Wide $0.00 $495,260.43 $495,260.43 $495,260.43 19.63% 19.63% 19.63% 19.63% 5.58% 3.23%
Total $0.00 $1.042,428.00 $1,042,428.00 $1,042.428.00 19.63% 19.63% 19.63% 19.63% 6.59% 4.92"10
e 2% per year of service to 1 % 1/99
plus 3% up to 30 years total
Fire Department $0.00 $151,268.90 $151,268.90 $151,268.90 12.08% 12.08% 12.08% 12.08% -1.00% -2.69%
Police Department $0.00 $185,595.97 $185,595.97 $185,595.97 12.08% 12.08% 12.08% 12.08% 0.73% 0.20%
City Wide $0.00 $304,908.13 $304,908.13 $304,908.13 12.08% 12.08% 12.08% 12.08% -1.97% -4.32",(,
Total $0.00 $641,773.00 $641,773.00 $641.773.00 12.08% 12.08% 12.08% 12.08% -0.96% -2.63%
'i'
CITY OF WINTER SPRINGS DEFINED BENEFIT PENSION PLAN
COSTS OF BENEFIT INCREASE
Initial Unfunded Yearly Increase in Eligible Yearly Cost
Benefit Percentage Liability Cost-DB Yearly Cost Compensation %of Comp
over current plan
a Current Plan
2% up to 30 years $1,400,167.13 $154,104.00 $5,668,059.44 2.72%
Proposed Plan Design
Increase in Contribution DB only
b 3% up to 30 years $1,400,167.13 $560,029.00 $405,925.00 $5,668,059.44 9.88%
c 2% per year of service to 10101/99 $1,400,167.13 $301,006.00 $146,902.00 $5,668,059.44 5.31%
plus 3% up to 30 years total
Proposed Plan Design- DB Only
No Money Purchase Plan
d 3% up to 30 years $1,400,167.13 $747,090.00 $592,986.00 $5,668,059.44 13.18%
e 2% per year of service to 10101/99 $1,400,167.13 $474,580.00 $320,476.00 $5,668,059.44 8.37%
plus 3% up to 30 years total
1 0 amort 40 amort
10 amort 40 amort 10 amort % 40 amort % Plus Money Plus Money
Past Service Liability -DB $219,695.00 $131,069.00 of Salary of Salary Purchase Purchase
Money Purchase Plan Included
Plan a $373,799.00 $285,173.00 6.59% 5.03% 12.59% 11.03%
Plan b $779,724.00 $691,098.00 13.76% 12.19% 19.76% 18.19%
Plan c $520,701.00 $432,075.00 9.19% 7.62% 15.19% 13.62%
Plan d $747,090.00 $747,090.00 13.18% 13.18% 13.18% 13.18%
Plan e $474,580.00 $474,580.00 8.37% 8.37% 8.37% 8.37%
.~'l
CITY OF WINTER SPRINGS DEFINED BENEFIT PENSION PLAN
COSTS OF BENEFIT INCREASE
A Current Plan $
Proposed Plans
B 2% per year of service to 10/01/00
plus 3% up to 30 years total
C 3% up to 30 years total
Proposed Plan Design- DB Only
No Money Purchase Plan
D 2% per year of service to 10/01/00
plus 3% up to 30 years total
E 3% up to 30 years total
Initial Unfunded
% of Current % of Payroll to
Payroll to DB Plan Money Purchase
% of Payroll for *Increase in %
Both Plans of Payroll
1,343,893.46
4.0%
6.0%
10.0%
0.0%
$1,343,893.46
6.3%
6.0%
12.3%
2.3%
$1,343,893.46
10.1%
6.0%
16.1%
6.1%
$0.00
10.7%
0.0%
10.7%
1.0%
$0.00
14.9%
0.0%
14.9%
4.9%
* This percentage could be contributed by the City of Winter Springs or the employee or a combination of both.
Under the current plan design, the City of Winter Springs is contributing 4% to the Money Purchase Plan and 4% to the Defined Benefit Plan:
the Employee is contributing a mandatory 2% of compensation to the Money Purchase Plan
If the employer chooses items 0 or E, it is possible to design the plan to allow the employee contribution to buy an employee
accrued benefit which is 100% vested. This will enhance the program for employees who are concerned about losing their contributions
to the money purchase pension plan.
'1
CITY OF WINTER SPRINGS DEFINED BENEFIT PENSION PLAN
ESTIMATED COSTS OF BENEFIT INCREASE
Actuarial Valuation Date of October 1, 2000
Entry Age NC % of Current % of Current
Re-established Normal - Minimum Maximum Payroll - Minimum Payroll - Maximum
FIL Cost (NC) 40 yrs amort. 10 yrs. Amort 40 yr amort of FIL 10 yr amort of FIL
A Prior Plan: 2% plus 2%
9% Interest Rate 2646076 294326 499789 659459 9.39% 12.38%
7% Interest Rate 3706793 367238 627092 860475 11.78% 16.16%
B Current Plan: 2% plus 3%
9% Interest Rate 2496047 297722 510595 654542 9.59% .12.29%
7% Interest Rate 4702170 455175 784807 1080860 14.74% 20.30%
C Proposed Plan: 3% up to 30 yrs
9% Interest Rate 4061970 344346 690767 925022 12.97% 17.37%
7% Interest Rate 6670068 526356 993940 1413896 18.67% 26.55%
..
Payroll Compensation $5,324,679.93
Retirement Plan Specialists, Inc Confidential