HomeMy WebLinkAboutRes 1997-16Nj|aini/
L
RESOLUTION NO.1997-16
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE TOWN OF
FOUNTAIN HILLS,ARIZONA,CONFIRMING THE AMENDMENT AND
RESTATEMENT OF A RETIREMENT PROGRAM FOR TOWN EMPLOYEES
PURSUANT TO SECTION 457 OFTHE INTERNAL REVENUE CODE;AMENDING
SAID RETIREMENT PROGRAM;AND DIRECTING THE MAYOR AND TOWN
MANAGER TO EXECUTE ANY AND ALL DOCUMENTS NECESSARY.
WHEREAS,by virtue of Resolution No.1991-10,the Town Council has heretofore onMarch
21,1991,established a deferred compensation planfor the employees of the Town of Fountain Hills
whichis sponsored and administered by Aetna Life Insurance and Annuity Company ("the Aetna
Plan");and
WHEREAS,by virtue of Resolution No.1994-58,effective November 1,1994,the Town
Council established a deferred compensation planfor the employees of the Town of Fountain Hills
which is sponsored and administered by ICMA Retirement Corporation (the "ICMA Plan");and
WHEREAS,pursuant to the adoption of the ICMAPlan,the Aetna Plan was frozen,effective
as of November 1,1994,and no further Town or employee contributions have been made to the
Aetna Plan on and after that date;and
WHEREAS,the Town Council desires to confirm the prior amendment and restatement of
the Aetna Plan;and
WHEREAS,amendments to the Internal Revenue Code of 1986 have been enacted that
requirefurther changes to the Aetna Plan;
NOW,THEREFORE BEIT RESOLVED by the Mayor and Town Council of the Town of
Fountain Hills,Arizona,as follows:
RESOLVED,that the Town Council hereby confirms the amendment and restatement of the
Aetna Planin the formof the deferred compensation plan,a copy of which is attached hereto;and
BEIT FURTHER RESOLVED that the Town Council hereby adopts the amendments to the
PlanrequiredbytheSmall Business JobProtectionActof 1996 inthe form attached to these
Resolutions.
FNTHI0OIRES
Mtrch 17,1997
L
DONE this l")4Kdav of fl-pK'l 1997.
ATTEST:
(mAa.~Kjb <L<VUL^J
Town Clerk
APPROVED AS TO FORM:
William E.Farrell
Town Attorney
Paul L Nordin
Town Manager
RESOLUTION NO.1997 -JJe_
-2-
X&jflSji*'
Xuugjuj/
\itiK
SPECIMEN AMENDMENT TO PUBLIC OR SECTION 501 TAX-EXEMPT ExMPLOYER
DEFERRED COMPENSATION PLAN
PURSUANT TO SECTION 457 OF THE INTERNAL REVENUE CODE
WHEREAS,theTown of Fountain Hills established a Deferred Compensation Plan ("Plan")pursuant
toSection457 of the Internal RevenueCode of 1986,asamended ("Code")effectiveon March
21,1991.|t :i ,
WHEREAS,theSmallBusinessJobProtectionAct of 1996 ("Act")changedcertain provisions of
Code Section 457.
WHEREAS,the Employer desiresto modify itsPlantocomply with theprovisions of theAct.
NOW,THEREFORE,the Employer hereby amends its Plan,effective January1,1997as follows:
1.Sections2.03aand2.03baremodifiedbyaddingthefollowinglanguagein parenthesis after
eachplaceinwhich $7,500 and$15,000 appears:
"or suchlargeramountasmaybe prescribed bytheSecretary of the Treasury."
2.Section 4.02f is restated as follows:
Pursuant toproceduresdeterminedbythe Committee,aParticipantmayrequestthat the Employer
change the designation of the Designated Institution utilizedby the Employer to measure the Plan
benefitspayabletothe Participant
3.Section 5.01 isrevisedbydeletingthe phrase "which wouldhave been"fromthe first sentence
of thesecond paragraph,replacing the first reference to Employer and "Employee7',and restating the
lastparagraphtostate:
-the premium is equal to the Participant's Deferred Compensation which wasappliedasa premium to
such annuity contract orlife insurance policy within,a reasonable time subsequent to the reduction in
the Participant's Compensation as authorized andasspecifiedinthe Participant's Participation
Agreement.
4.Sections 5.02and5.03are deleted intheirentirety,Section 5.04 is renumbered 5.03,andthe
followingisaddedasanewSection5.02:
The Employer will purchase an Investment Product and invest amounts of Deferred Compensation
therein inordertoprovideafundfrom which itcansatisfyits obligation to make benefit payments
pursuant to this Plan.Such Investment Product andall amounts of Compensation deferred under this
Plan,all property and rights which may be purchased by the Employer with such amounts and all
income attributable to such amounts,propertyor rights topropertyshallbeheldin trust (ora
custodial account or annuity contract described in Code Section 401(f)for the exclusive benefit of
Participants and their Beneficiaries.All such amounts shall not be subject to the claims of the
Employer's generalcreditors.
\g*ya/
c
5.The new Section 5.03 is deleted and restated as follows:
The value ofany benefit shallbe determined by the acmal value of the Investment Product at the time
of benefit payment,unaffected byany independent orarbitrarystandard ofcalculanon with respect to
such Investment Product The Employer shallnotbe responsible for the investment or performance
results ofsuchInvestment Product.
6.Asecond paragraph isaddedtoSection 6.01 e,as follows:
A participant whohaselectedto defer,his benefits pursuant to the paragraph above may,subsequent
tohisinitial election,andpriortothe commencement of benefits,electtofurtherdeferpayment of
benefitstoalaterdateasallowedby the Plan.AParticipantisonlypermittedto make one such
election.
7.A new Section numbered 6.0 Ih is added,as follows:
Ifpriorto Separation from Service,the value of a Participant's benefits under the Plan doesnot
exceed S3,500,theParticipantmayelectat any timetoreceivesuchvalueina lump sum if:1)the
Participant hasnot deferred any Compensation under the Plan during the two yearperiod ending on
thedate ofdistribution;and2)the Participanthasnotpreviouslyreceiveda distribution under this
subsection
8.Article vm isretitled "Leave of Absence andMilitary Service",theexisting paragraph is
numberedSection 8.01,andthefollowingisaddedas Section 8.02,effective as of December
12,1994:
ThisPlan will be administered in accordance withCodeSection 4l4(u)for employeeswhoreturnto
work after absences from employment due to military service.This includes make-up contributions
thatwerenot made during the employee's period of military service.Contributions made upwillbe
subject to the annual contribution limitations for the yearin which they relate,rather than the year
theyaremade.
IN WITNESS WHEREOF,theEmployer has causedthisamendmenttobe signed and anestedtoby
its duly authorized officer on theQibday of &pW 1 199*7
PaAOu^JA UiA^L^
Witness
Title
spccttzLdoc