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HomeMy WebLinkAbout1991-08 Creating a Deferred Compensation Plan - ICMA• - RESOLUTION NO, 8-91 A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACII, FLORIDA, CREATING A DEFERRED COMPENSATION PLAN FOR PERMANENT, FULL TIME VILLAGE EMPLOYEES WITH ICMA RETIREMENT CORPORATION AND SETTING FORTH THE TERMS THEREOF. WHEREAS, the Village has a class consisting of permanent, full time employees rendering valuable service; and WHEREAS, the establishment of a Deferred Compensation Plan for such employees serves the interests of the Village by enabling it to provide reasonable retirement security for its employees by providing increased flexibility in its personnel management system and by assisting the attraction and retention of competent Village employees; and WHEREAS, the Village has determined that the establishment of a Deferred Compensation Plan for its Village employees to be administered by the ICMA Retirement Corporation to service the above objectives; and WHEREAS, the Village desires that the investment of funds held under its said Deferred Compensation Plan be administered by the ICMA Retirement Corporation and that such funds be held by the ICMA Retirement Trust, the trust established by public employers for the collective investment of funds held under their Deferred Compensation Plan. NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA: Section 1. That the Village hereby adopts the Deferred Compensation Plan attached hereto as Appendix "A" and appoints the ICMA Retirement Corporation to serve as administrator thereunder. Section 2. The Village hereby executes a Declaration of Trust of the ICMA Retirement Trust attached hereto as Appendix "B". 1 1 Section 3. The Village Manager shall be the coordinator for this program and shall receive necessary reports, notices, etc. from the ICMA Retirement Corporation or ,the ICMA Retirement Trust and shall cast on behalf of the Village any required votes under the program. Administrative duties to carry out the Plan may be assigned to appropriate departments. Section 4. The Village hereby designates permanent, full time Village employees as the sole persons eligible to participate in the Plan. Section 5. The amount of deferred compensation shall not exceed $7,500.00 or 15% of the participant's includable compensation for each taxable year whichever is less. Section 6. This Resolution shall take effect immediately upon passage. PASSED AND ADOPTED THIS 14th DAY OF February 1991. (Village Seal) ATTEST: age Clerk /" APPENDIX A ("Employer') Deferred Compensation Plan Article 1. INTRODUCTION The Employer hereby establishes the Employer's Deferred Compensa- tion Plan, hereinafter referred to as the "Plan" The Plan consists of the provisions set forth In this document The primary purpose of this Plan is to provide retirement Income and other deferred benefits to the Employees of the Employer In accordance with the provisionsof Section 457 of the Internal Revenue Code o(1986, as amended (the "Code"). This Plan shall be an agreement solely between the Employer and participating Employees. Article II. DEFlNfT1ONS Section 2.01 Account: The bookkeeping account maintained for each Participant reflecting the cumulative amount of the Participant's Deferred Compensation, including any income, gains, losses, or increases or decreases In market value attributable to the Employer's investmentof the Participant's Deferred Compensation, and further reflecting any disbl- butions to the Participantor the Participant's Beneficiary and any lessor expenses charged against such Participant's Deferred Compensation. Section 2.02 Administrator. The person or persons named to carry out certain nondiscretionary administrative functions under the Plan, as hereinafter described. The Employer may remove any person as Admin- istrator upon 60 days' advance notice In writing to such person. In which case the Employer shall name another person or persons to act as Administrator. The Administrator may resign upon 60 days' advance notice In writing to the Employer, in which case the Employer shall name another person or persons to act as Administrator. Section 2.03 Beneficiary: The person or persons designated by the Participant in his Joinder Agreement who shall receive any benefits payable hereunder in the event of the Participant's death. In the event that the Participant names two or more Beneficiaries, each Beneficiary shall be entitled to equal shares of the benefits payable at the Partici- pant's death, unless otherwise provided in the Participant's Joinder Agreement 11 no Beneficiary is designated in the Joinder Agreement, if the Designated Beneficiary predeceases the Participant, or if the desig- nated Beneficiary does not suMve the Participant fora period of fifteen (15) days, then the estate of the Participant shall be the Beneficiary. Section 2.04 Deferred Compensation: The amount of Normal Compen- sation otherwise payable to the Participant which the Participant and the Employer mutually agree to deter hereunder, any amount credited to a Participant's Account by reason of a transfer under Section 6.03, or any other amount which the Employer agrees to credit to a Partici- pantsAccount. Section 2.05 Employee: Any individual who provides seMces tor the Employer, whether as an employee of the Employer or as an independ- ent contractor, and who has been designated by the Employer as eligible to participate in the Plan. Section 2.06 Includible Compensation: The amount of an Employee's compensation from the Employer for ataxable year that is attributable to services perormed for the Employer and that Is includible In the Employ- ee's gross income for the taxable year for federal income tax purposes; such term does not include any amount excludable from gross income under this Plan or any other plan described in Section 457(b) of the Code or any other amount excludable from gross income for federal income lax purposes Includible Compensation shall be determined without regard to any community property laws 10/89 Section 2.07 Joinder Agreement: An agreement entered into between an Employee and the Employer, including any amendments or modifica- tions thereof. Such agreement shall fix the amount of Deferred Compen- sation, specify a preference among the Investment alternatives designated by the Employer, designate the Employee's Beneficiary or Beneficiaries, and incorporate the terms, conditions. and provisions of the Plan by reference. Section 2.08 Normal Compensation: The amount of compensation which would be payable to a Participant by the Employer for a taxable year lino Joinder Agreement were In effect to deter compensation under this Plan. Section 2.09 Normal RetrennentAge: Age 7041, unless the Participant has elected en alternate Nonnal Retirement Age by written instrument deliv- ered to the Administrator prior to Separation from Service. A Partici- pant's Normal Retirement Age determines the period during which a Participant may utillie the catch-up limitation of Section 6.02 hereun- der. Onoe a Participant has to any extent utilized the catch-up limitation of Section 5.02, his Normal Retirement Age may not be changed. A Participant's alternate Norval Retirement Age may not be eadier than the earliest date that the Participant will become eligible to retire and receive unreduced retirement benefits under the Employer's basic retirement plan coveting the Participant and may not be later than the date the Participant vAll attain age 7014. Ha Participant continues employ- ment afterattalning age 7011, not having previously elected an alternate Normal Retirement Age, the Participant's alternate Norval Retirement Age shall not be later than the mandatory retirement age, H any, estab- lished by the Employer, M the age at which the Participant actually separates from service H the Employer has no mandatory retirement age. If the Participant vAll not become eligible to reoelve benefits tinders basic retirement plan maintained by the Employer, the Participant's alternate Normal Retirement Age may not be earlier than age 55 and may not be later than age 7011. Section 2.10 Participant: Any Employee who has)olned the Plan pursuant to the requirements of Article N. Section 2.11 Plan Year, The calendar year. Section 2.12 Retirement: The first date upon which both of the following shaft have occurred with respect to a participant: Separation from Service and attainment of age 65. Section 2.13 Separation front Service: Severance of ttte Participant's employment with the Employer which constitutes a "separation from service" within the meaning of Section 402(e)(4)(A)611) of the Code. In general, a Participant stall be deemed to have severed his employment with the Employer for purposes of this Plan when. In accordance with the established practices of the Employer, the employment relationship is considered to have actually terminated. fn the case of a Participant who is an independent contractor of the Employer, Separation from Service shall be deemed to have occurred when the Participant's con- tract under which seMces are performed has completely expired and terminated, there is no foreseeable possibility that the Employer will renew the contract or enter into a new contract for the Parlidpant's services, and it is not anticipated that the Participant will become an Employee of the Employer. Article 111. ADMINISTRATION Section 3.01 Duties of Employer: The Employer shaft have the authority to make all discretionary decisions affecting the rights or benefits of Participants which may be required in the administration of this Plan Section 3.02 Duties of Administrator: The Administrator, as agent for the Employer, shall perform nondiscretionary administrative functions in connection with the Plan, including the maintenance of Participants' Accounts, tho provision of periodic reports of the status of each Account. and the disbursement of benefits on behalf of the Employer in accor- dance with the provisions of this Plan. Article IV. PARTICIPATION IN THE PLAN Section 4.01 Initial Participation: M Employee may become a Participant by entering Into a Joinder Agreement prior to the beginning of the calendar month in which the Joinder Agreement Is to become effective to defer compensation not yet earned. Section 4.02 Amendment ofJoinderAgreement AParticipant mayamend an executed Joinder Agreement to change the amount otcompensatioh not yet earned which Is to be deferred (including the reduction of such future deferrals to zero) or to change his Investment preference (subject to such restrictions as may result from the nature or terns of any Investment made by the Employer). Such amendment shall become effective as of the beginning of the calendar month commencing after the date the amendment Is executed. A Participant may at any time amend his Joinder Agreement to change the designated Beneficiary, end such amendment shall become effective immediately ArtkcleV. UMITATIONS ON DEFERRALS Section 5.01 Normal Limitation: Except as provided In Section 5.02, the maximum amount of Deferred Compensation for any Participant forany taxable year shall not exceed the lesser of $7,500.00 or 33X percent of the Participant's Includible Compensation for the taxable year. This limitation will ordinarily be equivalent to the lesser of $7,500.00 or 25 percent of the Participant's Normal Compensation. Section 5.02 Catchup Limitation: For each of the last three (3) taxable years of a Participant ending before his attainment of Normal Retirement Age, the maximum amount of Deferred Compensation shall be the lesser of: (1) $15,000 or (2) the sum of () the Normal Limitation for the taxable year, and (ii) the Normal Limitation for each prior taxable year of the Participant commencing after 1978 less the amount of the Participant's Deferred Compensation for such prior taxable years. A prior taxable year shall be taken into account under the preceding sentence only If () the Participant was eligible to participate In the Plan for such year (or In any other eligible deferred compensation plan established under Sec- tion 457 o1 the Code which Is properly taken Into account pursuant to regulations under section 457), and (il) compensation (f any) deferred under the Plan (or such other plan) was subject to the deferral limita- tions set forth In Section 5.01. Section 5.03 Other Plans: The amount excludable from a Participant's gross income under this Plan or any other eligible deferred compensa- tion plan under section 457 of the Code shall not exceed $7,500.00 (or such greater amount allowed under Section 5.02 of the Plan), less any amount excluded from gross income under section 403(b), 402(a)(8), or 402(h)(1)(B) of the Code, or any amount with respect to which a deduction is allowable by reason of a contribution to an organization described in section 501(c)(18) of the Code. Article VI. INVESTMENTS AND ACCOUNT VALUES Section 6.01 Investment of Deferred Compensation: All investments of Participants' Deferred Compensation made by the Employer, including all property and rights purchased with such amounts and all Income attributable thereto, shall be the sole property of the Employer and shall not be held in trust for Participants or as collateral security for the fulfillment of the Employer's obligations under the Plan. Such properly shall be subject to the claims of general creditors of the Employer, and no Participant or Beneficiary shall have any vested interest or secured or preferred position with respect to such properly or have any claim against the Employer except as a general creditor. Section 6.02 Crediting of Accounts: The Participant's Account shall reflect the amount and value of the Investments or other property obtained by the Employer through the investment of the Participant's Deferred Corn- pensation. It is anticipated that the Employees investments with respect to a Participant will conbrm to the Investment preference specified in the Participant's Joinder Agreement, but nothing herein shall be con- strued to require the Employer to make any particular investment of e Participant's Deferred Compensation. Each Participant shall receive periodic reports, not less frequently than annually, showing the then - current value Of his Account Section 6.03 Transfers: (a) Incoming Transfers: A transfer may be accepted from an eligible deferred compensation plan maintained by another employer and cred- ited to a Participant's Account under this Plan if (1) the Participant has separated from service with that employer and become an Employee of Vie Employer, and (i) the other employer's plan provides that such transfer will be made. The Employer may require such documentation from the predecessor plan as It deems necessary to effectuate the transfer, to confirm that Such plan is an eligible deferred compensation plan within the meaning of Section 457 of the Code, and to assure that transfers are provided Wunder such plan.The Employer may refuse to accept a transfer In the tor' of assets other than cash, unless the Employer and the Administrator agree to hold web other assets under the Plan. Any such transferred amount shall not be treated as a deferral subject to the limitations of Article V, except that, for purposes of applying the limitations of Seetlons 5.01 and 5.02, en amount deferred during any taxable year under the plan from which the transfer is accepted shall be treated as tit has been deferred under this Plan during such taxable year and compensation paid by the transferor employer shall be treated as t it had been paid by the Employer. (b) Outgoing Transfers: An amount may be transferred to an eligible deferred compensation plan maintained by another employer, and charged to a Participant's Account under this Plan, If 0) the Participant has separated from seMce with the Employer and become an employee of the other employer, 00 the other employer's plan provides that such transfer w111 be accepted, and (111) the Participant and the employers have signed such agreements as are necessary to assure that the Employees liability to pay benefits to the Participant has been dis- charged and assumed by the other employer. The Employer may require such documentation from the other plan as it deems necessary to effectuate the transfer, to confirm that such plan Is an eligible deterred compensation plan within the meaning of section 457 of the Code. and to assure that transfers are provided for under such plan. Such trans- fers shall be made only under such circumstances as are permitted under section 457 of the Code and the regulations thereunder. Section 6.04 EmployerLiability:In no event shall the Employees liability to pay benefits to a Participant under Article VI exceed the value of the amounts credited to the Participant's Account; the Employer shall not be liable for losses arising from depreciation or shrinkage In the value of any Investments acquired under this Plan. Article VII. BENEFITS Section 7.01 Retirement Benefits and Election on Separation from Service: Except as otherwise provided in this Article VII, the distribution of a Participant's Account shall commence as of April 1 of the calendar year after the Plan Year of the Participant's Retirement, and the distribu- tion of such Retirement benefits shall be made In accordance with one of the payment options described in Section 7.02. Notwithstanding the foregoing, the Participant may irrevocably elect within 60 days following Separation from Service to have the distribution of benefits commence on a fixed or determinable date other than that described in the preced- ing sentence which is at least 60 days after the date such election is delivered in writing to the Employer and forwarded to the Administrator, but not later than April 1 of the year following the year of the Participant's Retirement or attainment of age 701 . whichever is later. 2 Section 7.02 Payment Options: As provided in Sections 7.01, 7.04, and 7.05, a Participant or Beneficiary may elect to have the value of the Participant's Account distributed in accordance with one of the follow- ing payment options. provided that such option is consistent with the limitations set forth in Section 7.03: (a) Equal monthly, quarterly, semi-annual or annual payments In an amount chosen by the Participant continuing until his Account is exhausted; (b) One lump -sum payment; (c) Approximately equal monthly quarterly, seml-annual or annual payments. calculated to continue for a period certain chosen by the Participant (d) Annual Payments equal to the minimum distributions required under Section 401(a)(9) of the Code over the life expectancy of the Participant or over the life expectancies of the Participant and his Beneficiary. (e) Payments equal to payments made by the Issuer of a retirement annuity policy acquired by the Employer. (Q Any other payment option elected bythe Participant and agreed to by the Employer and Administrator, provided that such option must provide for substantially nonl ncreasing payments for any period after the latest benefit commencement date under Section 7.01. A Participant's or Beneficiary's election of a payment option must be made at least 30 days before the payment of benefits Is to commence. if a Participant or Beneficiary fats to make a timely election of a payment option, benefits shall be paid monthly under option (c) above for a period of five years. Section 7.03 Limitation on Options: No payment option may be selected by a Participant or Beneficiary under Sections 7.02, 7.04, or 7.05 unless It satisfies the requirements of Sections 401(a)(9) and 457(d)(2) of the Code. including that payments commencing before the death of the Participant shall satisfy the Incidental death benefits requirement under • section 457(d)(2)(B)(1)(1). Unless otherwise elected by the Participant all determinations under Section 401(8)(9) shall be made without recal- culation of life expectancies. Section 7.04 Post -retirement Death Benefits: (a) Should the Participant die after he has begun to receive benefits under a payment option, the remaining payments, ff any, under the payment option shall be payable to the Participant's Beneficiary com- mencing within the 30-day period commencing with the 61st day after the Participant's death, unless the Beneficiary elects payment under a different payment option that Is available under Section 7.02 within 60 days of the Participant's death. Any different payment option elected by a Beneficiary under this section must provide for payments at a rate that is at least es rapid as under the payment option that was applicable to the Participant In no event shall the Employer or Administrator be liable to the Beneficiary for the amount of any payment made In the name of the Participant before the Administrator receives proof of death of the Participant (b) If the designated Beneficiary does not continue to live for the remain- ing period of payments under the payment option. then the commuted value of any remaining payments under the payment option shall be paid in a lump sum to the estate of the Beneficiary. In the event that the Participant's estate is the Beneficiary, the commuted value of any remain- ing payments under the payment option shalt be paid to the estate in a lump sum Section 7.05 Pre -retirement Death Benefits: (a) Should the Participant die before he has begun to receive the benefits provided by Section 7.01, the value of the Participant's Account shall be payable to the Beneficiary commencing within the 30-day period commencing on the 91st day after the Participant's death, unless the Beneficiary irrevocably elects a different fixed or determinable benefit commencement date within 90 days of the Participant's death. Such benefit commencement date shall be not later than the later of (i) December 31 of the year following the year of the Participant's death, or (li) if the Beneficiary is the Participant's spouse, December 31 of the year in which the Participant would have attained age 701/2. (b) Unless a Beneficiary elects a different payment option prior to the benefit commencement date, death benefits under this Section shall be paid In approximately equal annual installments over five years. or over such shorter period as may be necessary to assure that the amount of any annual installment Is not less than $3,500. A Beneficiary shall be treated as if he were a Participant for purposes of determining the payment options available under Section 7.02, provided, however, that the payment option chosen by the Beneficiary must provide for pay- ments to the Beneficiary over a period no longer than the lite expec- tancy of the Beneficiary, and provided that such period may not exceed fifteen (15) years t the Beneficiary Is not the Participant's spouse. (c) In the event that the Beneficiary dies before the payment of death benefits has commenced of been completed, the remaining value of the Participant's Account shall be paid to the estate of the Beneficiary In a lump sum. In the event that the Participant's estate Is the Beneficiary, payment shall be made to the estate In a lump sum. Section 7.08 Unforeseeable Emergencies: (a) In the event an unforeseeable emergency occurs, a Participant may apply tothe Employer to receive that pad of the value of his Aocount that Is reasonably needed to satisfy the emergency need. If such an applica- tion Is approved by the Employer, the Participant shall be paid only such amount as the Employer deems necessary to meet the emergency need, but payment shall not be made to the extent that the financial hardship may be relieved through cessation of deferral under the Plant Insurance or other reimbursement or liquidation of other assets to the extent such liquidation would not itself cause severe financial hardship. (b) An unforeseeable emergency shall be deemed to involve only cir- cumstances of severe financial hardship to the Participant resulting from a sudden unexpected Illness, accident or disability of the Partici- pant or of a dependent (as defined In Section 152(a) of the Code) of the Participant loss of the PartldpaM's property due to casualty, or other similar and extraordinary unforeseeable circumstances arising as a result of events beyond the Control of the ParticipantThe need to send a Participants child to college or to purchase a new home shall not be considered unforeseeable emergencies. The determination as to wtether such an unforeseeable emergency exists shall be based on the merits of each Individual case. Section 7.07 Transitional Rule for Pre-1989 Benefd Elections: In the event that pdor to January 1, 1989, a Participant or Beneficiary has com- menced receiving benefits under a payment option or has Irrevocably elected a payment option or benefit commencement date, then that payment option or election shall remain In effect notwithstanding any other provision of this Plan. Article VIII. NON -ASSIGNABILITY Section 8.01 In General: Except as provided in Section 8.02, no Partici- pant or Beneficiary shall have any right to commute, sell. assign. pledge, transfer or otherwise convey or encumber the right to receive any payments hereunder, which payments and rights are expressly declared to be non -assignable and non -transferable. Section 8.02 Domestic Relations Orders: (a) Allowance of Transfers: To the extent required under a final judg- ment decree, or order (including approval of a property settlement agreement) made pursuant to a state domestic relations law, any portion of a Participant's Account may be paid or set aside for payment to a spouse, former spouse, or child of the Participant. Where necessary to carry out the terms of such an order, a separate Account shall be established with respect to the spouse, former spouse, or child who shall be entitled to make investment selections with respect thereto in 3 the same manner as the Participant; any amount so set aside for a spouse, former spouse, or child shall be paid out in a lump sum at the earliest date that benefits may be paid to the Participant unless the order directs a different time or form of payment. Nothing In this Section shall be construed to authorize any amount to be distributed under the Ptan at a time or in a form that is not permitted under Section 457 of the Code. Any payment made to a person other than the Participant pursu- ant to this Section shall be reduced by required income tax withholding; the fact that payment is made to a person other than the Participant may not prevent such payment from being includible In the gross income of the Participant for withholding and income tax reporting purposes. (b) Release from liability to Participant: The Employees liability to pay benefits to a Participant shall be reduced to the extent that amounts have been paid or set aside for payment to a spouse, former spouse, or child pursuant to paragraph (a) of this Section. No such transfer shall be effectuated unless the Employer or Administrator has been provided with satisfactory evidence that the Employer and the Administrator are released from any further claim by the Participant with respect to such amounts.The Participant shall be deemed to have released the Employer and the Administrator from any claim with respect to such amounts, in any case In which (i) the Employer or Administrator has been served with legal process or othenvtse joined in a proceeding relating to such transfer, (ii) the Participant has been notified of the pendency of such proceeding In the manner prescribed by the taw of the Jurisdiction In vttieh the proceeding is pending for service of process in such action or by mall from the Employer or Administrator to the Participant's last known mailing address, and (iii) the Participant fails to obtain an orderer the court in the proceeding relieving the Employer or Administrator from the obligation to comply with the Judgment decree, or order. (c) Participation In Legal Proceedings: The Employer and Administrator shall not be obligated to defend against or set aside any Judgment decree, or order described In paragraph (a) orany legal order relating to the garnishment of a Participant's benefits, unless the full expense of such legal action Is bome by the Participant In the event that the Participant's action (or inaction) nonetheless causes the Employer Or Administrator to incur such expense, the amount of the expense maybe charged against the Participant's Account and thereby reduce the Employees obligation to pay benefits to the Participant In the course of any proceeding relating to divorce, separation, or child support, the Employer and Administrator shall be authorized to disclose information relating to the Participant's Account to the Participant's spouse, former spouse, or child (including the legal representatives of the spouse, forcer spouse, or child), or to a court. Article Di. RELATIONSHIP TO OTHER PLANS AND EMPLOYMENT AGREEMENTS This Plan serves In addition to any other retirement, pension, or benefit plan or system presently in existence or hereinafter established for the benefit of the Employer's employees, and participation hereun- der shall not affect benefits receivable under any such plan or system. Nothing contained in this Plan shall be deemed to constitute an employ- ment contract or agreement between any Participant and the Employer or to give any Participant the right to be retained in the employ of the Employer. Nor shall anything herein be construed to modify the terms of any employment contract or agreement between a Participant and the Employer. Article X. AMENDMENT OR TERMINATION OF PLAN The Employer may at any time amend this Plan provided that it transmits such amendment In writing to the Administrator at least 30 days prior to the effective date of the amendment. The consent of the Administrator shall not be required In order for such amendment to become effective, but the Administrator shall be under no obligation to continue acting as Administrator hereunder H it disapproves of such amendment The Employer may at anytime terminate this Plan. The Administrator may at anytime propose an amendment to the Plan by an instrument in wilting transmitted to the Employer at least 30 days before She effective date of the amendment Such amendment shall become effective unless, within such 30-day period, the Employer ratifies the Administrator In writing that it disapproves such amend- ment, In which case such amendment shag not become effective. In the event of such disapproval, the Administrator shall be under no obliga- tion to continue acting as Administrator hereunder. ff this Plan docu- ment constitutes an amendment and restatement of the Plan as previously adopted by the Employer, the amendments contained herein shall become effective on January 1,1989, and the terms of to preced- ing Plan document shall remain In effect through December 31,1988. Except as may be required to maintain the status of the Plan as an eligible deferred compensation plan under section 457 of the Code or to comply with other applicable laws, no amendment or termination of the Plan shall divest any Participant of any rights with respect to com- pensation deferred before the date of the amendment or termination. Article Xi. APPLICABLE LAW This Plan shall be construed under the laws of the state whore the Employer Is located and Is established with the intent that ft meet the requirements of an "eligible deferred compensation plan" under Sec- tion 457 of the Code, as amended. The provisions o1 this Plan shall be Interpreted wherever possible in conformity with the requirements of that section. Article XII. GENDER AND NUMBER The masculine pronoun, whenever used herein, shall include the feminine pronoun, and the singular shall include the plural, except where the context requires otherwise. 4 APPLNDIX 13 DECLARATION OF TRUST OF ICMA RETIREMENT TRUST ARTICLE 1. NAME AND DEFINITIONS Section 1.1 Name: The Name of Me Trust, as amended and restated hereby. is the ICMA Retirement Trust. Section 1.2 Definitions: Wherever they are used herein. the following terns shad have the ldtoeing respective meanings: (a) Bylaws The Bytaws referred to In Section 4.1 hereof. as amended from time to time (b) Deferred Compensation Plan. A deferred compensation pan established and maintained by a Public Employer for the purpose d providing retire- ment income and other deterred benefits to Its employees In accordance with the provslons of section 457 d the Internal Revenue Code d 195a, as amended. (c) Employees. Those employees who participate In Qualified Plans. (d) Employer Trust. A trust created pursuant to an agreement between RC and a Public Employer for the purpose of investing and administering the funds set aside by such Employer In connection with its Deterred Compen- sation agreements with es employees or In connection with Its Qualified Plan. (e) Guaranteed Investment Contract. A cddract entered into by the Reire- ment Trust with insurance companies that presides bra guaranteed rate ol retum on investments made pursuant to such contract. (0 ICMA. The International City Management Association. (g) 1CMA/RCTrustees. Those Trustees elected by the Public Employers who in accordance with the provisions of Section 3.1(a) hereof, are also mem- bers d the Board el Directors d ICMA or RC. (h) Investment ldvisec The liwesunenl Adviser that enters Imo a contrad with the Retirement Trust to pres)de advice with respect to kwestment of the Bust Property. (1) Portfolios. The Portfolios d Investments established by the Investment Adviser to the Retirement Trust, under the supervision d the Trustees. for the purpose d providng investments for the Tent Property, 0 Pudic Employee Trustees Those Trustees elected by the Public Employers who, in accordance with the provisions d Section 3.1(a) hereof, are full-time employees of Public Employers. (k) Pubic Employer Trustees Public Employers who serve as trustees d the Qualified Plans (n Pubic Employer. A unit d state or local government, or dry agency or instrumentality thereof, that has adopted a Deferred Compensation Plan or a Qualrled Pian and has executed this Declaration of Trust. (m) Qualified Plan. A plan sponsored by a Pudic Employer for the purpose of providing retirement income to its employees which satisfies the qualifi- cation requirements of Section 401 of the Internal Revenue Code, as amended (n) RC The international City Management Association Retirement Corpo- ration. (o) Retirement Trust. The Trust sealed by this Declaration of lust (p) Trust Properly. The amounts Hand In the Retirement Trust on behalf of the Pudic Employers In connection with Deferred Compensation Plans and on befall of the Pudic Employer Trustees for the etodusive benefit d Employees pursuant to Ouai. led Plana The 'rust Property shall kndude any income resulting from the invest. men of the amounts so held. (q) Trustee& The Pubic Employee Trustees and ICMA/RC Trustees elected by the Pubic Employers to seam as members d the Board d Trustees of the Retirement lust. ARTICLE 11. CREATION AND PURPOSE OF THE TRUST; OWNERSHIP OF TRUST PROPERTY Section 2.1 Creation: The Retirement Trust Is seated and established by the execution d this Dedarafon d Trust by the Trustees and the Public Employer& Section 2.2 Purpose: The purpose Of the Retirement Trust is to provide for the commingled investment of ends held by the Public Employers In connec- tion with their Deterred Compensation and Owned Plans. The Trust Prop- erty shall be Invested In the Portfolio& in Guaranteed kwestnent Contracts, and in ether Investments recommended by the Investment Adviser under the supeMsien Of the Beard dTvpaeS No pan of the Test Property will be kr ested In securities issued by Pubic Employers. Section 2.3 Ownership of Trust Property: The Trustees shad have legal ire to the Trust Property. The Pubic Employers shall be the beneficial owners d the Wien Of the Trust Property anocade to the Defamed Compensation Plans. The portion d the Trust Properly allocable b the Qualified Plans shall be held for the Pubic Employer Trustees for the exclusive benefit of the Employees ARTICLE 111. TRUSTEES Section 3.1 Number and Qualification of Trustees. (a) The Board of Trustees shall consist of nine Trustees. Five of the Trustees shalt be turktime employees of s Pudic Employer (the Pudic Employee Trustees) who we authorized by such Pudic Employer to serve as Trustee. The remaining fart Trustees shall consist of two persons who, at the time d election to the Board of Trustees, are members of the Board of Directors of ICMA and two persons who, at the time of election, are members of the Board Of Directors of RC (the ICMMiC Trustees). One d the Trustees who is a d rector of ICMA. and one of the Trustees wtto is a dreolor of RC. shall. at the time of election. be full-time employees of a Pudic Employer. (b) No person may serve as a Trustee for more than one term In any ten-year period. Section 3.2 Election and Term. (a) Except for the Trustees appointed to fill vacancies pursuant to Section 35 hared. the Trustees shall be elected by a vote of a ma)oMy of the Pubic Employers in accordance with the procedures set forth in the Bylaws (b) AI rho first election of Trustees. throe Trustees shall be defied for a term or three years, throe Trustees shall be elected for a term d two years and throe Trustees shall be elected for a term of one year At each subsequent election. three Trustees shall be elected for a term of three years and until his or her successor is dotted and qualified. Section 3.3 Nomination*: The Trustees who are h111-time cmpoye-es of Pudic Employers shall serve as the Nominating Committee for the Pudic Employee Trustees The Nominating Committee shall choose candidates for Pudic Employee Trustees in accordance with the procedures set forth in the By -Laws. Section 3.4 Resignation and Removal. (a) Any Trustee may resign as Trustee (without need for prior a subsequent accounting) by an Instrument In writing signed by the Trustee and delivered to the other Trustees and such resignation shall be effective upon such delivery, or at a later date according to the terms of the instrument. Any of the Trustees may be removed for cause by a vole of a majority of the Public Employers. (b) Each Pudic Employee Trustee shall resign his or her position as Trustee within sixty days or the date on which he or she ceases to be a full-time employee or a Pudc Employer Section 3.5 Vacancies: The Term of office of a Trustee shall terminate and a vacancy shall occur in the event of the death, resignation. removal. adjudi- cated incompetence or other incapacity l0 perform the duties re the office or a Trustee In the case or a vacancy. the remaining Trustees shall appoint such person as they in their discretion shall see St (subject to the Gntilati0ns set forth in this Section). 10 sere for the unexpired portion of the term of the Trustee who has resigned or otherwise ceased to be a Trustee The appointment shall be made by a written instrument signed by a majority d the Trustees. The per- son appointed must be the same type of Trustee (i.e., Pudic Employee Trus- tee or ICMAJRC Trustee) as the person who has ceased to be a Trustee An appointment d a Trustee may be made in anticipation d a vacancy 10 occur al a later date by reason d retirement or resignation. provided that such appoint- ment shall not become effective prior to such retirement or resignation. When- ever 8 vacancy in the number of Trustees shall scout until Such vacancy Is fined as provided in this Section 35. the Trustees in dfoe regardless or their number, shall have all the posers granted to the Trustees and shall discharge all the duties imposed upon the Trustees by this Declaration, A written instru- ment certifying the existence of such vacancy signed by a majority d the ' Trustees shall be concuswe evidence d the existence Of such vacancy. Section 3.6 Trustees Serve In Representative Capacity: By executing this Declarat,on, each Public Employer agrees that the Pudic Employee Trustees elected by the Public Employers are authorized toad as agents and represen- tatives of the Pudic Employers collectively. ARTICLE IV. POWERS OF TRUSTEES Section 4.1 General Powers: The Trustees shah have the power to conduct the busness d the Trust and to carry on its operations Such power shall include but shall not be Grnbed to, the power t0: (a) receive the Trust Property from the Public Employers. Public Employer Trustees or other Trustee d any Employer Trust; (b) enter Into a contract with an Investment Adviser providing. among other things -for the establishment and operation of the Portfolios selection or the Guaranteed Investment Contracts in which the Trust Property may be invested, selection of War imeemerxs for the Trust Property and the payment d reasona- ble lees to the Investment Adviser and to any sub -investment adviser retained by the Investment Adviser; (c) review annually the performance of the Investment Adviser and approve annually the contrail with such Investment Adviser: (et) 'nee and reinvest the Trust Property in the Portfolios the Guaranteed Interest Contre-Ls and in any one( kl estrnenl recommended by the Inds:mert Advise( but not Irdudng secuntes issued by Pudic Employers provided that a a Public Employer has directed that is monies be invested in specified Portfolios or in a Guaranteed Investment Contract. the Trustees of the Retirement Trust shall invest such moves in accordance Pith such directions, (e) keep such portion of the Trust Property in cash or cash balances as the Trustees. from tine to lime may deem to be in the best Interest or the Retire- ment Trust created hereby. without liability for interest thereon, (f) accept and retain tor Pith time es they may deem advisable any socun- ties or other propony roceiwvd or acquired by Ihem es Trustees hereunder whether or rot such securities or other property would nomtaey be purchased as investments hereunder; (g) cause any securities or other properly held as pan of the Trust Property to be registered in the name tithe Retirement Trust or in the name d a nomi- nee and to hold any investments in bearer fors, but the books and records d the Trustees shall at all tunes show that as such investments are a part of the Trust Property, (h) make execute, acknowledge, and deliver any and as documents of trans - ter and coaeyarra and any and as other instruments that may be necessary Or appropriate to carry out the powers herein granted; sole upon any stock bonds or other searkies: give general a special proxies or powers of attorney with or without poser or substitution exercise ary con- version privileges. subsctption rights, 01 other options, and make any pay- ments Incidental thereto; oppose, Or consent to, or otherwise participate in, corporate reorganizations or other changes effecting corporate securities, and delegate WScrelionary powers. and pay any assessments or charges in con- nection therewith; and generally exercise any of the powers of an owner with respect to stocks, bonds. securities or other property held as pan of the Trust Properly, W enter into contracts or arrangements for goods or services required in con- nection with the operation d the Retirement Rust. Including. but not bmited to, Contracts with custodians and contracts for the provision of adminstrative services; (k) borrow or raise money ter the purposes Of the Retirement Rust in such amount, and upon such terns and conditions, as the Trustees shall deem advis- able, provided that the aggregate amours of such bonCreArgs shall not exceed 304b d the value of the Trust Property. No person Ierxdng money to the Trustees shall be bound to see the application d the money lent or l0 Inquire into is validly, expedency Or propriety of any such borrowing: (I) incur reastlnable expenses as required for the operation of the Retirement Trust and deduct such expenses from the Trust Properly: (m) pay expenses property allocable b the Trust Property incurred in connec- tion with the Deferred Compensation Plans, Ouelified Plans or the Employer Trusts and deduct such expenses from that portion d the Trust Property to whom such expenses are properly allocable; (n) pay out el the Trust Property all real and personal properly taxes, income taxes and other taxes d ary and as kinds which, in the opinion of the Trustees are properly levied, a assessed under existing or future laws upon, or in respect d, Use Trust Property and allocate any such lazes to the appropriate accounts, (o) adopt, amend and repeal Ole Bylaws provided that such By -Laws are al as times consistent with the terms d this Declaration of Trust (p) employ persons to make available interests in the Retirement Trust to employers eligible to maintain a Deemed Compensation Plan under Section 457 or a Qualified Plan under Section 401 of the Internal Revenue Code, as amended; (q) issue the Annual Report or the Retirement Trust, and the disclosure docu- ments and other literature used by the Retirement Rust; (r) make bans. icudng Use purchase of debt obligations, provided that all such loans shall bear Interest al the current Markel rate; (s) Contract for, and delegate any powers granted hereunder to, such officers, agents, employees audlors and attorneys as are Trustees may select. provided that the Trustees may not delegate the powers set forth in paragraphs (b). (c) and (0) Of this Section 4.1 and may not delegate any powers i1 such delega- eon would violate their fiduciary duties; (t) provide (Of the indemnification or are officers and Trustees or the Aet+rement Trust end purchase fiduciary insurance; (u) maintain books and records, imludl g separate accounts for each Public Employe( Public Employer Trustee or Employer Trust and such addtional sep- arate accounts as are required under. and consisted with, the Deterred Com- pensation or Qualified Plan or each Public Employer; and (v) do an such acts. take as such proceedings, and exercise all such rights end pnvileges. although not specifically mentioned herein. as the Trustees may deem necessary or appropriate to administer the Trust Property and to carry out the purposes of the Retirement Trust. -action LT Distribution of 'Rant Property: Distributions U ew Lust Prof ony nJ all be made to or on behalf of. the Public Employer or Public Employer Trustee in accordance with the loans of the Deterred Compensation Plans. Oval,fiod Plans or Employer Trusts The Trustees or the Retirement Trust shall be fully protected in making payments in accordance with the directions of are Public Employers, Pulc Eniployer Trustees or other Trusteed the Employer Bum w,thwl ascertaining whether such payments are in compliance with the pvn4ons dune Deferred Compensation or Qualified Plans, or the agreements creating the Employer Trusts ecflon 4.3 Execution of Instruments: The Trustees may unanimously designate any one or more of the Trustees to execute any instrument or docv men on bonall of all. including but not limited to the signing or endorsement of any check and the signing of any applications. insurance and other con- tracts. and the action of such designated Trustee or Trustees shall have the same force and effect as it taken by all the Trustees. 'ICLE V. DUTY OF CARE AND LIABILITY OF TRUSTEES ectlon 5.1 Duty of Care: In exercising the powers hereinbefore granted to the Trustees. the Trustees shall perform all acts within their authority or the exclusive purpose of providing benefits or the Pudic Employers In connec• bon with Deferred Compensation Plans end Pubfc Employer Trustees Pursuant to Oualdied Plans. and shall perform such acts with the care. skill. prudence and diligence in the circumstances Then prevailing That a prudent person act- ing in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with Ike aims tction 5.2 Liability: The Trustees shall not be Fable or any mistake djudg- menu or other action taken In good With. and or any action taken or omitted in reliance in good With upon the Inks of account or other records el the Retirement Trust. upon the Orion of counsel, or upon reports made to the Retirement Trust by any of its officers, employees or agents or by the Invest- ment Adviser or any sub -investment adviser accountants, appraisers d other experts or consultants selected with reasonable care by the Trustees. officers or employees of the Retirement kust. The Trustees shall also not be Gable or any loss sustained by the Trust Properly by reason of any investment made n good With and in accordance with the standard d care set forth in Section St. talon 5,3 Bond: No Trustee shag be obligated to give any bond or other security br the performance of any of his or her duties hereunder. ARTICLE VI. ANNUAL REPORT TO SHAREHOLDERS The Trustees shall annually submit to the Pudic Employers and Pubic Employer Trustees a written recoil or the transactions of ate Retirement Trust, including finan vial statements which shall be cenifred by independent public accountants cite sen by the Trustees ARTICLE VII. DURATION OR AMENDMENT OF RETIREMENT TRUST Section 7.1 Withdrawal: A Public Employer or Pubrc Employer Trustee may. at any time. withdraw from this Retirement Trust by delivering to the Board of Trustees a wdtlen statement of withdrawal. In such statement. the Pubic Employer or Pudic Employer Trustee shall acknowledge that the Bust Prop arty allocable to the Public Employer is derived from compensation deterred by employees of such Public Employer pursuant to its Deterred Comperssa. Lion Plan or from contributions to the accounts of Employees pursuant to a Warded Plan. and shall designate the snancial'insotuton to which suds property shalt be transferred by the Trustees of the Retirement Trust or by the Trustee Of the Employer Bust. Section 7.2 Duration: The Retirement Bust shalt continue until terminated by the sole of a majority d ate Public Employers, each casting one vote Upon termination. all of the Trust Properly shag be pakd out to the Public Employers. Pudic Employer Trustees or the Trustees d the Employer Trusts. as appropriale Section 7.9 Amendment: The Retirement Bust may be amerded by the sole of a majority d the Public Employers. each casting one vote Section 7.4 Procedure: A resolution o terminate O amend the Retirement Trust or to remote a Trustee shall be submitted to a into of the Public Employers if: () a mejorny d the Trustees so Wreck. Or: (rq a petition requesting a sole signed by not less U*n 25% d the Pudic Employers, is submitted to the Trustees. ARTICLE VIII. MISCELLANEOUS Section 8.1 Governing Law: Except es otherwise required by state or local Ia% this Declaration d Trust and the Retirement Trust hereby created shall be construed and regulated by the laws el the District of Columbia. Section 9.2 Counterparts: This Declaration may be executed by the Pudic Employers and Trustees in two or more counterparts, each of which shall be deemed an original but as d which together shall constitute ohe and the same instrument.