Loading...
HomeMy WebLinkAbout06-13 Resolution No. 06-13 RESOLUTION ADOPTING THE PLAN DOCUMENT OF NATIONWIDE RETIREMENT SOLUTIONS, INC. DEFERRED COMPENSATION PLAN FOR PUBLIC EMPLOYEES BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that the Amended and Restated 457(b) Governmental Plan Document of Nationwide Retirement Solutions Inc. Deferred Compensation Plan for Public Employees, effective January 1, 2006, is hereby adopted and approved by the City Council of the City of Elgin. s/Ed Schock Ed Schock, Mayor Presented: January 25, 2006 Adopted: January 25, 2006 Omnibus Vote: Yeas: 7 Nays: 0 Attest: s/Dolonna Mecum Dolonna Mecum, City Clerk NATIONWIDE RETIREMENT SOLUTIONS, INC. DEFERRED COMPENSATION PLAN FOR PUBLIC EMPLOYEES AMENDED AND RESTATED 457(b) GOVERNMENTAL PLAN DOCUMENT Effective January 1, 2006 The Plan consists of the provisions set forth in this document,and any loan amendments which are incorporated as if fully rewritten herein,and is applicable to each Public Employee who elects to participate in the Plan. The Plan is effective as to each such Public Employee upon the date he becomes a Participant by entering into and filing with the Administrator the Participation Agreement referred to herein. ARTICLE I Definitions 1.01. The following terms shall, for purposes of this Plan,have the meaning set forth below. (a) ADMINISTRATOR means Nationwide Retirement Solutions,Inc. (b) ACCOUNT BALANCE means the bookkeeping account maintained with respect to each Participant which reflects the value of the deferred Compensation credited to the Participant, including the Participant's Annual Deferrals,the earnings or losses of the Participant's account (net applicable account expenses and fees) allocable to the Participant. The Account Balance includes any Plan Sponsor contributions under Section 4.01,any Eligible Rollover Accounts(s), any plan-to-plan transfers,and any account established for a Beneficiary after a Participant's death. If a Participant has more than one Designated Beneficiary at the time of the Participant's death,then a separate account shall be established and maintained for each Beneficiary. (c) ALTERNATE PAYEE means a person entitled to receive a benefit under the Plan through a Domestic Relations Order,as defined in IRC Section 414(p)(8). • (d) ANNUAL DEFERRAL means the amount of Compensation deferred by a Participant during a calendar year of Compensation and any contributions by the Plan Sponsor to the Participant's account. (e) BENEFICIARY means the person(s)properly designated by a Participant under Section 8.01 Designation of Beneficiary,or,if none,the Participant's estate,which is entitled to receive benefits under the Plan after the death of the Participant. (f) COMPENSATION means all cash compensation for services to the Plan Sponsor,including salary,wages,fees,commissions,bonuses,and overtime pay that is includible in the Public Employee's gross income for the calendar year,plus amounts that would be cash Compensation for services to the Plan Sponsor includible in the Public Employee's gross income for the calendar year but for a Compensation reduction election under IRC Sections 125, 132(f),401(k), 403(b),or 457(b),including an election to defer Compensation under Article II Election to Defer Compensation of the Plan. (g) ELIGIBLE RETIREMENT PLAN means an individual retirement account described in IRC Section 408(a),individual retirement annuity described in IRC Section 408(b),a qualified trust described in IRC Section 401(a), an annuity plan described in IRC Section 403(a) or 403(b),or an eligible governmental plan described in IRC Section 457(b). ®Nationwide Retirement Solutions,Inc. 1 Consolidated Standard 457 Plan Amended and Restated 457(b)Governmental Plan Document NM-0103A0November 11,2005 (h) ELIGIBLE ROLLOVER ACCOUNT means the separate bookkeeping account(s) maintained by the Administrator within the Plan for a Participant for amounts of eligible rollover contributions under Section 6.01 Eligible Rollover Contributions to the Plan. (i) ELIGIBLE ROLLOVER DISTRIBUTION means an Eligible Rollover Distribution as defined in IRC Section 402(c)(4),including Eligible Rollover Distributions to a surviving Spouse under IRC Section 402(c)(9). 0) INCLUDIBLE COMPENSATION means a Public Employee's actual wages in box 1 of Form W-2 for a given year for services performed for the Plan Sponsor,but subject to a maximum of$200,000 (or such higher maximum as may apply under IRC Section 401(a)(17)) and increased (up to the dollar maximum) by any Compensation reduction election under IRC Sections 125, 132(f),401(k), 403(b),or 457(b),including an election to defer Compensation under Section 2.02 Election Required for Participation. (k) INDEPENDENT CONTRACTOR means any person receiving any type of Compensation from the Plan Sponsor or any of its agencies,departments, subdivisions or instrumentalities for which services are rendered pursuant to one or more written or oral contracts,if such a person is not a Public Employee. (1) IRC means the Internal Revenue Code of 1986,as now in effect or as hereafter amended. All citations to sections of the Code are to such sections as they may from time to time be amended or renumbered. (m) NORMAL RETIREMENT AGE means any age that is on or after the earlier of age 65 or the age at which Participants have the right to retire and receive,under the basic defined benefit pension plan of the employer(or a money purchase plan in which the Participant also participates if the Participant is not eligible to participate in a defined benefit plan),immediate retirement benefits without actuarial or similar reduction because of retirement before some later specified age. However,the Normal Retirement Age shall not be later than age 701/2. Alternatively,a Plan may provide that a Participant is allowed to designate a Normal Retirement Age within these ages. For purposes of the special Section 457 catch-up in Section 3.03 Special Section 457 Catch-up Limitation,an entity sponsoring more than one eligible plan shall not permit a Participant to have more than one Normal Retirement Age under the eligible plans it sponsors. Special Rule for Eligible Plans of Qualified Police or Firefighters. An eligible plan with Participants that include qualified police or firefighters as defined under IRC Section 415(b)(2)(H)(ii)(1)may designate a Normal Retirement Age for such qualified police and firefighters that is earlier than the earliest Normal Retirement Age designated under the general rule above,but in no event may the Normal Retirement Age be earlier than age 40. Alternatively, a Plan may allow a qualified police or firefighter Participant to designate a Normal Retirement Age that is between age 40 and age 70 1/2. (n) PARTICIPANT means an individual who is currently deferring Compensation or who has previously deferred Compensation under the Plan by salary reduction and who has not received a distribution of his entire Account Balance under the Plan. Only individuals who perform services for the Plan Sponsor as a Public Employee or Independent Contractor may defer Compensation under the Plan. ®Nationwide Retirement Solutions,Inc. 2 Consolidated Standard 457 Plan Amended and Restated 457(b)Governmental Plan Document November 11,2005 (o) PARTICIPATION AGREEMENT means the application to enroll and participate in the Plan that is completed by the Public Employee and provided to the Administrator. The Participation Agreement form for this purpose shall be provided by the Administrator and will have no effect until it is signed,filed with the Administrator by the Participant,and accepted by the Administrator prior to the Participant's death. (p) PLAN means the Plan for Public Employees as set forth in this plan document and as it may be amended from time to time. (q) PLAN SPONSOR means the county,municipality,or other instrumentality of the State,which is an eligible governmental employer pursuant to IRC Section 457(e)(1), for which services are performed by Public Employees,and which participates in this Plan. (r) PLAN YEAR means the calendar year in which the Plan becomes effective,and each succeeding calendar year during the existence of the Plan. (s) PUBLIC EMPLOYEE means any person who receives any type of Compensation from the Plan Sponsor for services rendered to the Plan Sponsor(including,but not limited to,elected or appointed officials and salaried employees). (t) SEVERANCE FROM EMPLOYMENT means the date on which the Participant dies,retires or otherwise has a Severance from Employment with the Plan Sponsor. An Independent Contractor is considered to have a Severance from Employment with the Plan Sponsor upon the expiration of the contract(or in the case of more than one contract,all contracts) under which services are performed for the Plan Sponsor if the expiration constitutes a good-faith and complete termination of the contractual relationship. An Independent Contractor shall not be considered Severed from Employment with the Plan Sponsor,and shall not receive any benefits hereunder unless (i) at least 12 months have expired since the date on which the last contract pursuant to which the Independent Contractor provided any services to the Plan Sponsor was terminated,and (ii) the Independent Contractor has performed no services for the Plan Sponsor during the 12-month period referred to herein either as an Independent Contractor or Public Employee. (u) SPOUSE means a person of the opposite sex who is a husband or wife,as defined under Title 28,Chapter 15,Section 1738 of the United States Code. (v) VALUATION DATE means each business day/the last day of the calendar month/the last day of the calendar quarter/each December 31. 1.02 Gender and Plurals. Whenever used herein,the masculine gender shall include the feminine and the singular shall include the plural unless the provisions of the Plan specifically require a different construction. ARTICLE II Election to Defer Compensation 2.01 Eligibility to Participate. Each Public Employee shall be eligible to participate in the Plan and defer Compensation hereunder immediately upon becoming employed by the Plan Sponsor. 2.02 Election Required for Participation. A Public Employee may elect to become a Participant by executing a Participation Agreement and consenting to defer a portion of his Compensation by a ®Nationwide Retirement Solutions,Inc. 3 Consolidated Standard 457 Plan Amended and Restated 457(b)Governmental Plan Document November 11,2005 5.02 Election of Benefit Commencement Date. A Participant may elect to commence distribution of benefits at any time after retirement or other Severance from Employment,as determined and confirmed by the Plan Sponsor by a notice filed with the Administrator before the date on which benefits are to commence. However,in no event may distribution of benefits commence later than the date described in Section 5.04(2) Required Beginning Date. 5.03 Forms of Distribution—Benefit Payment Options. Benefits shall be paid in accordance with the payment option elected by the Participant. Payment,method of payment,and settlement options are available as provided by each of the available investment specifications. The Participant shall elect the method of payment based upon the options then available under the Plan,including but not limited to lump sum distributions,periodic payment by fixed amount,periodic payment by fixed time period,partial lump sum payment or purchased annuity. A Participant or Beneficiary who has chosen a payment option, other than the purchased annuity option, shall have the ability to change his payment option subject to any restrictions or limitations imposed by the Plan,the Administrator, an investment option provider,any regulatory agency,or as otherwise required by law. 5.04 Required Minimum Distributions. All distributions under the Plan must comply with IRC Section 401(a)(9) and the regulations issued thereunder. The provisions of this Section 5.04 will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year. The term Designated Beneficiary as used in this Section 5.04 shall have the meaning set forth in Treasury Regulation Section 1.401(a)(9)-4. (a) Requirements of Treasury Regulations Incorporated into Plan. All distributions required under this Section 5.04 will be determined and made in accordance with the Treasury Regulations under promulgated under IRC Section 401(a)(9). (b) Required Beginning Date. The Participant's entire interest will be distributed,or begin to be distributed,to the Participant no later than the Participant's required beginning date,which is to begin no later than April 1 following the calendar year in which the Participant attains age 70 1/2 or has a Severance from Employment,whichever is later. (c) Death of Participant before Distributions Begin. If the Participant dies before distributions begin,the Participant's entire interest will be distributed,or begin to be distributed,no later than as follows: (1) If the Participant's surviving Spouse is the Participant's sole Designated Beneficiary, distributions to the surviving Spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant dies,or by December 31 of • the calendar year in which the Participant would have-attained age 70 1/2,if later. (2) If the Participant's surviving Spouse is not the Participant's sole Designated Beneficiary, distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died. (3) If there is no Designated Beneficiary as of September 30 of the year following the year of the Participant's death,and there are no other Designated Beneficiaries,the Participant's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. ®Nationwide Retirement Solutions,Inc. 8 Consolidated Standard 457 Plan Amended and Restated 457(b)Governmental Plan Document November 11,2005 (4) If the Participant's surviving Spouse is the Participant's sole Designated Beneficiary and the surviving Spouse dies after the Participant but before distributions to.the surviving Spouse begin, this Section 5.04 will apply as if the surviving Spouse were the Participant. (d) Required Minimum Distributions during Participant's Lifetime. During the Participant's lifetime,the minimum amount that will be distributed for each distribution calendar year is the lesser of: (1) the quotient obtained by dividing the Participant's Account Balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations,using the Participant's age as of the Participant's birthday in the distribution calendar year;or (2) if the Participant's sole Designated Beneficiary for the distribution calendar year is the Participant's Spouse,the quotient obtained by dividing the Participant's Account Balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations,using the Participant's and Spouse's attained ages as of the Participant's and Spouse's birthdays in the distribution calendar years. (e) Death On or After Date Distributions Begin and Participant Survived by Designated Beneficiary. (1) If the Participant dies on or after the date distributions begin and there is a Designated Beneficiary,the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participant's Designated Beneficiary,determined as follows: The Participant's remaining life expectancy is calculated using the age of the Participant in the year of death,reduced by one for each subsequent year. (2) If the Participant's surviving Spouse is the Participant's sole Designated Beneficiary,the remaining life expectancy of the surviving Spouse is calculated for each distribution calendar year after the year of the Participant's death using the surviving Spouse's age as of the Spouse's birthday in that year. For distribution calendar years after the year of the surviving . Spouse's death,the remaining life expectancy of the surviving Spouse is calculated using the age of the surviving Spouse as of the Spouse's birthday in the calendar year of the Spouse's death,reduced by one for each subsequent calendar year. (3) If the Participant's surviving Spouse is not the Participant's sole Designated Beneficiary, the Designated Beneficiary's remaining life expectancy is calculated using the age of the Beneficiary in the year following the year of the Participant's death,reduced by one for each subsequent year. (4) No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Participant's death,the minimum amount that will be distributed,in accordance with Section 8.01 Acceptance of Beneficiary Designation by Administrator,for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the Participant's remaining life expectancy calculated using the age of the Participant in the year of death,reduced by one for each subsequent year. 0 Nationwide Retirement Solutions,Inc. 9 Consolidated Standard 457 Plan Amended and Restated 457(b)Governmental Plan Document November 11,2005 (f) Death before Date Distributions Begin and Participant Survived by Designated Beneficiary. If the Participant dies before the date distributions begin and there is a Designated Beneficiary,the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the remaining life expectancy of the Participant's Designated Beneficiary. (1) No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Participant's death,distribution,in accordance with Section 8.01 Acceptance of Beneficiary Designation by Administrator,of the Participant's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (g) Death of the Surviving Spouse before Distributions to Surviving Spouse are Required to Begin. If the Participant dies before the date distributions begin,the Participant's surviving Spouse is the Participant's sole Designated Beneficiary,and the surviving Spouse dies before distributions are required to begin,this Section 5.04 will apply as if the surviving Spouse were the Participant. • (h) Election of Payment Option. If a Participant or Beneficiary fails to elect a payment option that meets the requirements of IRC Section 401(a)(9),the Administrator will initiate such a distribution. A Participant or Beneficiary who has chosen a payment option,other than an annuity option,shall have the ability to change his or her payment option. 5.05 Order of Priorities. This Section 5.05 has been prepared in accordance with Treasury Regulations promulgated under IRC Section 401(c)(9). To the extent there is a conflict between Section 5.04 or this Section 5.05 and the IRC,the provisions of the IRC and applicable Treasury Regulations shall prevail. For any calendar year,a Beneficiary may elect distribution of a greater amount(not to exceed the amount of the remaining Account Balance in lieu of the amount calculated using the formula set forth in Section 5.04. 5.06 Death Benefit Distributions. If the Participant dies before the benefits to which he is entitled under the Plan have been paid or exhausted,then the remaining benefits payable under the Plan shall be paid to his Designated Beneficiary. The Beneficiary shall have the right to elect the time and form of distribution of such benefits,subject to the limitations set forth in the Plan. 5.07 Amount of Account Balance. Except as provided in Section 5.03 Forms of Distribution,the amount of any payment under this Article V shall be based on the amount of the Account Balance on the preceding Valuation Date. 5.08 In-Service Distributions from Eligible Rollover Accounts. If a Participant has an Eligible Rollover Account attributable to eligible rollover contributions to the Plan,the Participant may at any time elect to receive a distribution of all or any portion of the amount held in the Eligible Rollover Account. 5.09 Unforeseeable Emergency Distributions. (a) Distribution. If the Participant has an Unforeseeable Emergency before retirement or other Severance from Employment,the Participant may elect to receive a lump sum distribution equal to the amount requested or,if less,the maximum amount determined by the Administrator to be permitted to be distributed under this Section 5.09. • ®Nationwide Retirement Solutions,Inc. 10 Consolidated Standard 457 Plan Amended and Restated 457(b)Governmental Plan Document November 11,2005 (b) Unforeseeable Emergency Defined. An Unforeseeable Emergency is defined as a severe financial hardship of the Participant resulting from: an illness or accident of the Participant, the Participant's Spouse,or the Participant's dependent(as defined in IRC Section 152(a));loss of the Participant's property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by homeowner's insurance,e.g.,as a result of a natural disaster);the need to pay for the funeral expenses of the Participant's Spouse or dependent (as defined in IRC Section 152(a));or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant,or as otherwise permitted by law. For example, the imminent foreclosure of or eviction from the Participant's primary residence may constitute an Unforeseeable Emergency. In addition,the need to pay for medical expenses,including non-refundable deductibles,as well as for the cost of prescription drug medication,may constitute an Unforeseeable Emergency. Except as otherwise specifically provided in this Section 5.09,neither the purchase of a home nor the payment of college tuition is an Unforeseeable Emergency. (c) Unforeseeable Emergency Distribution Standard. A distribution on account of . Unforeseeable Emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise,by liquidation of the Participant's assets,to the extent the liquidation of such assets would not itself cause severe financial hardship,or by cessation of deferrals under the Plan,or as otherwise permitted by law. (d) Distribution Necessary to Satisfy Emergency Need.Distributions because of an Unforeseeable Emergency may not exceed the amount reasonably necessary to satisfy the emergency need(which may include any amounts necessary to pay any federal, state,or local income taxes or penalties reasonably anticipated to result from the distribution). 5.10 Voluntary In-Service Smaller Account Distributions. A Participant who is an active Public Employee of the Plan Sponsor may request to receive a distribution of the combined total Annual Deferrals under the Plan if the following requirements are met: (a) The Participant's total Annual Deferrals in the Account Balance under the Plan does not exceed • $5,000 (or the dollar limit under IRC Section 411(a)(11),if greater);and • (b) The Participant has not previously received a voluntary in-service smaller account distribution under the Plan;and (c)There have been no Annual Deferrals under the Plan with respect to the Participant during the two-year period ending on the date of the in-service distribution. ARTICLE VI Eligible Rollovers and Plan-to-Plan Transfers 6.01 Eligible Rollover Contributions to the Plan. (a) Incoming Rollover Contributions. A Participant who is a Public Employee and who is entitled to receive an Eligible Rollover Distribution from another Eligible Retirement Plan may request to have all or a portion of the Eligible Rollover Distribution paid to the Plan,provided, (1) the Eligible Rollover Distribution is made entirely in the form of U.S. dollars,and, ®Nationwide Retirement Solutions,Inc. 11 Consolidated Standard 457 Plan Amended and Restated 457(b)Governmental Plan Document November 11,2005 (2) the Participant demonstrates to the Administrator's satisfaction that the amount is a qualifying Eligible Rollover Distribution under IRC Sections 402(c)(4), 403(a)(4), or 408(d)(3). (b) Definition of Eligible Rollover Distribution. For purposes of Section 6.01(a)Incoming Rollover Contributions,an Eligible Rollover Distribution means any contribution of all or any portion of a Participant's benefit under another Eligible Retirement Plan to the Plan,except that an Eligible Rollover Distribution does not include: (1) any installment payment for a period of 10 years or more, (2) any distribution made as a result of an Unforeseeable Emergency,or (3) For any other distribution,the portion,if any,of the distribution that is a required minimum distribution under IRC Section 401(a)(9). (c) Separate Account for Eligible Rollover Contributions. The Plan shall establish and maintain for the Participant an Eligible Rollover Account for any Eligible Rollover Distribution paid to the Plan from any Eligible Retirement Plan that is not an eligible governmental plan under IRC Section 457(b). In addition,the Plan shall establish and maintain for the Participant an Eligible Rollover Account for any Eligible Rollover Distribution paid to the Plan from any Eligible Retirement Plan that is an eligible governmental plan under IRC Section 457(b). 6.02 Permissive Rollovers to an Eligible Retirement Plan. A Participant or the surviving Spouse of a Participant(or a Participant's former Spouse who is the Alternate Payee under a Domestic Relations Order,as defined in IRC Section 414(p))who is entitled to an Eligible Rollover Distribution may elect,at the time and in the manner prescribed by the Administrator,to have all or any portion of the distribution paid directly to an Eligible Retirement Plan specified by the Participant in a direct rollover. 6.03 Plan-to-Plan Transfers to the Plan of Eligible Governmental 457(b)Assets. (a) Permissive Plan-to-Plan Transfers. At the direction of the Plan Sponsor,the Administrator may permit a class of Participants who are Participants in another eligible governmental IRC Section 457(b) Plan to transfer assets to the Plan as provided herein. Such a transfer is permitted only if the other Plan provides for the direct transfer of each Participant's interest therein to the Plan. Transfers from other eligible deferred compensation Plans (as defined in IRC Section 457) to the Plan will be accepted at the Participant's request if such transfers are in cash. (b) Effect of Transfers on Annual Deferral Limitations. Any such transferred amount shall not be subject to the limitations of Section 3.01 Basic Annual Limitation,3.02 Age 50 Catch-up Annual Deferral Contributions,and 3.03 Special Section 457 Catch-up Limitation,as an Annual . Deferral,provided however,that the actual amount deferred during the calendar year under both Plans shall be taken into account in calculating the maximum Annual Deferral for that year. The amount so transferred shall be credited to the Participant's Account Balance and shall be held, accounted for,administered,and otherwise treated in the same manner as an Annual Deferral by the Participant under the Plan. (c) Required Documentation for Transfers to the Plan. The Administrator may require such documentation from the other Plan as it deems necessary to effectuate the transfer in accordance • ®Nationwide Retirement Solutions,Inc. 12 Consolidated Standard 457 Plan Amended and Restated 457(b)Governmental Plan Document November 11,2005 with IRC Section 457(e)(10) and Treasury Regulation Section 1.457-10(6) and to confirm that the other Plan is an eligible governmental plan as defined in Treasury Regulation 1.457-2(f). 6.04 Plan-to-Plan Transfers from the Plan to another Eligible Governmental 457(b) Plan. (a) Outgoing Plan-to-Plan Transfers Pursuant to Severance of Employment. At the direction of the Plan Sponsor,the Administrator may permit a class of Participants and Beneficiaries to elect to have all or any portion of their Account Balance transferred to another eligible governmental plan within the meaning of IRC Section 457(b) and Treas. Reg. 1.457-2(f). A transfer is permitted under this.Section 6.04(a) for a Participant only if the Participant has had a Severance from Employment with the Plan Sponsor and is a Public Employee of the entity that maintains the other eligible governmental 457(b) Plan. Further, a transfer is permitted under this Section 6.04(a)only if the other eligible governmental 457(b)plan provides for the acceptance of plan-to-plan transfers with respect to the Participants and Beneficiaries and for each Participant and Beneficiary to have an amount deferred under the other plan immediately after the transfer at least equal to the amount transferred. (b) Outgoing Plan-to-Plan Transfers While Employed. If the Plan Sponsor offers an eligible governmental 457(6) plan other than the Plan,and such other plan accepts transfers,the Participant may transfer the Account Balance in cash from the Plan to the other plan. (c) Limitation of Liability. Upon the transfer of assets under this Section 6.04,the Plan's liability to pay benefits to the Participant or Beneficiary under this Plan shall be discharged to the extent of the amount so transferred for the Participant or Beneficiary. The Administrator may require such documentation from the receiving plan as it deems appropriate or necessary to comply with this Section 6.04(for example,to confirm that the receiving plan is an eligible governmental plan under paragraph (a) of this Section 6.04,and to assure that the transfer is permitted under the receiving plan) or to effectuate the transfer pursuant to Treas.Reg. 1.457-10(b). 6.05 Permissive Service Credit Transfers. (a) If a Participant or Beneficiary is also a Participant in a tax-qualified defined benefit governmental plan(as defined in IRC Section 414(d)) that provides for the acceptance of plan-to-plan transfers with respect to the Participant or Beneficiary,then the Participant or Beneficiary may elect to have any portion of the Participant's or Beneficiary's Account Balance transferred to the defined benefit governmental plan. A transfer under this Section 6.05(a)will not be treated as a distribution and,therefore,may be made before the Participant has had a Severance from Employment. (b) A transfer may be made under Section 6.05(a) only if the transfer is either for the purchase of permissive service credits (as defined in section 415(n)(3)(A))under the receiving defined benefit governmental plan or a repayment to which IRC Section 415 does not apply by reason of IRC Section 415(k)(3). ARTICLE VII Domestic Relations Orders 7.01 Receipt of Domestic Relations Orders. When the Plan Sponsor,Administrator,or Plan receives a Domestic Relations Order (DRO),judgment,decree,or order(including approval of a property settlement agreement) that relates to the provision of child support,alimony payments,or the marital ®Nationwide Retirement Solutions,Inc. 13 Consolidated Standard 457 Plan Amended and Restated 457(6)Governmental Plan Document November 11,2005 (b) an annuity contract shall be issued by an insurance company qualified to do business in the state where the contract was issued and may not include any life, health or accident,property casualty or liability insurance contract,and (c) the custodian of any custodial account created pursuant to this Plan must be a bank,as described in IRC Section 408(n),or a person who meets the non-bank trustee requirements of paragraphs (2)-(6)of Section 1.408-2(e) of the Income Tax Regulations relating to the use of non-bank trustees. ARTICLE XII Miscellaneous 12.01 Non-Assignability. Except as provided in Article VII and Section 12.02 IRS Levy,the interests of each Participant and Beneficiary under the Plan are not subject to the claims of the Participant's or Beneficiary's creditors;and neither the Participant nor any Beneficiary shall have any right to sell, assign,transfer,or otherwise convey the right to receive any payments hereunder or any interest under the Plan,which payments and interest are expressly declared to be non-assignable and non- transferable. Furthermore,in accordance Section 522 of the Bankruptcy Abuse Protection and Consumer Protection Act of 2005 ("the Act"),retirement funds that are in a fund that is exempt from taxation under IRC Section 457 may be exempted from an individual's property estate for purposes of the Act. 12.02 IRS Levy. Notwithstanding Section 12.01 Non-Assignability,the Administrator may pay from a Participant's,Beneficiary's,or Alternate Payee's Account Balance the amount that the Administrator finds is lawfully demanded under a levy issued by the Internal Revenue Service with respect to that Participant,Beneficiary,or Alternate Payee or is sought to be collected by the United States Government under a judgment resulting from an unpaid tax assessment against the Participant, Beneficiary,or Alternate Payee. 12.03 Mistaken Contributions. If any contribution(or any portion of a contribution) is made to the Plan by a good faith mistake of fact,then within one year after the payment of the contribution,and upon receipt in good order of a proper request approved by the Administrator,the amount of the mistaken contribution(adjusted for any income or loss in value,if any,allocable thereto) shall be returned directly to the Participant or,to the extent required or permitted by the Administrator,to the Employer. ARTICLE XIII Amendment and Termination 13.01 Amendment and Termination. The Plan Sponsor may at any time modify,amend,suspend,or terminate the Plan in whole or in part(Including retroactive amendments) or cease deferring Compensation pursuant to the Plan for some or all Participants. In the event of such an action,the Plan Sponsor shall deliver to each affected Participant a notice of such modification,amendment,or termination or a notice that it shall cease deferring Compensation;provided,however,that the Plan Sponsor shall not have the right to reduce or affect the value of any Participant's Account Balance or any rights accrued under the Plan prior to such modification,amendment, termination,or cessation. 13.02 No Effect of Plan on Employment of Participants. Neither the establishment of the Plan nor any modification thereof,nor the establishment of an account,nor any agreement between the Plan Sponsor and the Administrator nor the payment of any benefits,shall be construed as giving to any Participant or other person any legal or equitable right against the Plan Sponsor except as herein ®Nationwide Retirement Solutions,Inc. 18 Consolidated Standard 457 Plan Amended and Restated 457(b)Governmental Plan Document November 11,2005 provided,and in no event shall the terms of employment of the Public Employee,Independent Contractor,or Participant be modified or in any way affected. 13.03 Interpretation. This Plan is intended to be an eligible deferred compensation Plan under IRC Section 457, and shall be interpreted and administered in a manner consistent with the IRC. This Plan may be amended to the extent that it may be necessary to conform the Plan to the requirements of IRC Section 457 and any other applicable law, regulation,or ruling,including amendments that are retroactive to the effective date of the Plan. In the event that the Plan is deemed by the Internal Revenue Service to be administered in a manner inconsistent with the Internal Revenue Code,the Plan Sponsor shall correct such administration. ARTICLE XIV Prior Plan If the Plan Sponsor has already accepted and adopted the Plan(the"Prior Plan"),as defined by IRC Section 457,then the Plan Sponsor intends that this Plan shall amend and restate the Prior Plan. In such event,this Plan shall apply to all Participants in the Prior Plan on the effective date hereof,and also to each Public Employee who elects to participate in this Plan on and after the effective date hereof. Article XV Effective Date This Plan shall be effective as of January 1,2006. • 0 Nationwide Retirement Solutions,Inc. 19 Consolidated Standard 457 Plan Amended and Restated 457(b)Governmental Plan Document November 11,2005 0,k. ‘..„, 46. E ,ti City of Elgin Agenda Item No. E °garrn\O'- 110 G. ry 111 1 January 6, 2006 � 1' N moi „tow ,, , pi i TO: Mayor and Members of the City Council FINANCIALLY STABLE C ,ERNMENT EFFICIENT SEERVRVICES. AND QUALIT Y INFRASTRUCTURE FROM: Olufemi Folarin, City Manager, Gail Cohen, Human Resources irector SUBJECT: Revised Plan Document for Nationwide Retirement Solutions PURPOSE The purpose of this memorandum is to provide the Mayor and members of the City Council with information to adopt a revised plan document for Nationwide Retirement Solutions. RECOMMENDATION It is recommended that the City Council approve adoption of the revised plan document. Ow BACKGROUND Nationwide Retirement Solutions provides a voluntary deferred compensation plans for interested City employees. The Plan Document details the deferred compensation program. In 2003, The U.S. Department of Treasury issued regulations that required conformance by governmental 457 (b) plans by January 1, 2006. This revised plan document incorporates the required changes. Among the changes are new definitions of "account balance,” "alternate payee," "normal retirement age," and "spouse." The changes permit continued participation by members who are on leaves of absence or are disabled so long as compensation continues to be paid (disability benefits do not constitute a continuation of compensation). The City's other deferred compensation provider, ICMA, has confirmed that their plan documents comply with the Department of Treasury regulations. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None. 0 iliFINANCIAL IMPACT None. Revised Plan Document for Nationwide Retirement Solutions January 6, 2006 Page 2 EGAL IMPACT \y4i None. ALTERNATIVES 1. Adopt the Revised Plan Document. 2. Do not adopt the Revised Plan Document and risk termination of the relationship with Nationwide Retirement Solutions. Respectfully submitted for Council consideration. GAC fir..