HomeMy WebLinkAbout24-223 Resolution No. 24-223
RESOLUTION
ADOPTING THE SECURE/CARES/CAA AMENDMENT OF THE CITY OF ELGIN
DEFERRED COMPENSATION PLAN FOR PUBLIC EMPLOYEES
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS,
that the City of Elgin Deferred Compensation Plan for Public Employees be amended in the form
attached hereto, which amendment is hereby adopted and approved; and
BE IT FURTHER RESOLVED, that the appropriate officers of the City of Elgin be, and
they hereby are,authorized and directed to execute said amendment on behalf of the City of Elgin;
and
BE IT FURTHER RESOLVED, that the officers of the City of Elgin be, and they hereby
are,authorized and directed to take any and all actions and execute and deliver such documents as
they may deem necessary, appropriate or convenient to effect the foregoing resolutions including,
without limitation, causing to be prepared and filed such reports documents or other information
as may be required under applicable law.
s/David J. Kaptain
David J. Kaptain, Mayor
Presented: September 25, 2024
Adopted: September 25, 2024
Vote: Yeas: 9 Nays: 0
Attest:
s/Kimberly Dewis
Kimberly Dewis, City Clerk
CITY OF ELGIN DEFERRED COMPENSATION PLAN FOR PUBLIC EMPLOYEES
SECURE/CARES/CAA AMENDMENT
This Amendment is intended as a good faith effort to comply with the requirements of the
Further Consolidated Appropriations Act,2020,including the SECURE Act provisions,the
Coronavirus,Aid, Relief and Economic Security(CARES)Act,and the Consolidated
Appropriations Act,2021 (CAA),and corresponding guidance(the "Applicable Law").This
Amendment is to be construed in accordance with the Applicable Law and both the Amendment
and the Applicable Law will supersede any inconsistent Plan provisions.
OPTIONAL PROVISIONS:
For each item below, if the check boxes are empty,the italicized provision will apply.
1. Treatment of 2020 RMDs(see Section A. below)
Effective 01/01/2020, unless the Participant or beneficiary chooses otherwise, a Participant
or beneficiary who would have been required to receive a 2020 RMD will not receive this
distribution.
Effective (no earlier than 01/01/2020):
❑ Unless the Participant or beneficiary chooses otherwise,a Participant or
beneficiary who would have been required to receive a 2020 RMD will not
receive this distribution.
❑ Unless the Participant or beneficiary chooses otherwise,a Participant or
beneficiary who would have been required to receive a 2020 RMD will receive
this distribution.
2. 2020 RMDs as Direct Rollovers(see Section A. below)
A direct rollover is not offered for 2020 RMDs or Extended 2020 RMDs.
For purposes of the direct rollover provisions of the Plan,the following will be treated as
eligible rollover distributions in 2020:
❑ 2020 RMDs.
❑ 2020 RMDs and Extended 2020 RMDs.
❑ 2020 RMDs, but only if paid with an additional amount that is an eligible rollover
distribution without regard to Code section 401(a)(9)(I).
3. Qualified Birth or Adoption Distributions (see Section C. below)
The Plan does not permit qualified birth or adoption distributions as a separate distribution
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event.
❑ Effective (no earlier than 01/01/2020),the Plan permits qualified birth
or adoption distributions as a separate distribution event.
O The following limitations and conditions apply:
4. Portability of Lifetime Income Options(see Section D. below)
The Plan does not permit "qualified distributions"or "qualified plan distribution annuity
contracts"of lifetime income investment options.
❑ The Plan permits "qualified distributions"or"qualified plan distribution annuity
contracts"of lifetime income investment options when such investment options
are no longer authorized to be held as an investment option under the Plan
effective: (no earlier than the plan year beginning after 12/31/2019).
O The following limitations and conditions apply:
5. Time of Payment for Reasons other than Death
The existing Plan provisions, if any, remain in effect for distributions to a Participant who
has not separated from employment(e.g., benefits may not commence until Required
Beginning Date).
El Effective 07/01/2023 (no earlier than 01/01/2020),the Plan permits distributions
to a Participant who has not separated from employment if the Participant attains:
59-1/2 (age cannot be less than 59-1/2).
STANDARD PROVISIONS:
A. Required Minimum Distributions
In defining Required Beginning Date or determining required minimum distributions,any
references to age 70-1/2 are replaced with: age 70-1/2 (for Participants born before 07/01/1949)
or age 72(for Participants born after 06/30/1949).
Notwithstanding other provisions of the Plan to the contrary and if selected above,a Participant
or beneficiary who would have been required to receive required minimum distributions in 2020
(or paid in 2021 for the 2020 calendar year for a Participant with a required beginning date of
04/01/2021)but for the enactment of section 401(aX9)(1)of the Code("2020 RMDs"),and who
would have satisfied that requirement by receiving distributions that are either: (1)equal to the
2020 RMDs,or(2)one or more payments(that include the 2020 RMDs) in a series of
substantially equal periodic payments made at least annually and expected to last for the life (or
life expectancy)of the Participant,the joint lives(or joint life expectancies)of the Participant
and the Participant's designated beneficiary,or for a period of at least 10 years("Extended 2020
RMDs"),may receive those distributions.
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B. Distribution on Account of Death for Certain Eligible Retirement Plans
Whether before or after distribution has begun, a Participant's entire interest will be distributed to
the designated beneficiary by 12/31 of the calendar year containing the tenth anniversary of the
Participant's death unless the designated beneficiary meets the requirements of an "eligible
designated beneficiary". An "eligible designated beneficiary" may receive distributions over the
life of such designated beneficiary. If there is no designated beneficiary as of 09/30 of the year
following the year of the Participant's death,the Participant's entire interest will be distributed by
12/31 of the calendar year containing the fifth anniversary of the Participant's death.
An "eligible designated beneficiary" is defined as any designated beneficiary who is: (i)the
surviving spouse of the Participant; (ii)a minor child of the Participant;(iii)disabled;(iv)a
chronically ill individual;or(v)an individual who is not more than 10 years younger than the
Participant. The determination of whether a designated beneficiary is an "eligible designated
beneficiary" is made as of the date of death of the Participant. If an "eligible designated
beneficiary" dies before the portion of the Participant's interest is entirely distributed,the
remainder of such portion must be distributed within 10 years after the death of such "eligible
designated beneficiary".
C. Qualified Birth or Adoption Distributions
To the extent provided above,a Participant may receive a distribution up to$5,000 during the
1-year period beginning on the date on which the Participant's child is born or on which the legal
adoption by the Participant of an eligible adoptee is finalized. An eligible adoptee is any
individual(other than a child of the Participant's spouse)who has not attained age 18 or is
physically or mentally incapable of self-support.The$5,000 maximum is an aggregate amount
of such distributions from all plans maintained by the Employer.
D. Portability of Lifetime Income Investments
To the extent provided above,any amounts invested in a "lifetime income investment" may be
distributed through either"qualified distributions"or"qualified plan distribution annuity
contracts" no earlier than 90 days prior to the date that such "lifetime income investment"may
no longer be held as an investment option under the Plan.
The following terms are used in this section:
"Qualified distribution" means a direct trustee-to-trustee transfer described in Code section
401(31)(A)to an eligible retirement plan (as defined in Code section 402(c)(8)(B)).
"Qualified plan distribution annuity contract" means an annuity contract purchased for a
Participant and distributed to the Participant by a plan or contract described in subparagraph (B)
of Code section 402(cX8)(without regard to clauses(i)and(ii)thereof).
"Lifetime income investment" means an investment option which is designed to provide an
employee with election rights which: (a)are not uniformly available with respect to other
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investment options under the plan,and(b)are to a "lifetime income feature" available through a
contract or other arrangement offered under the plan(or under another eligible retirement plan
(as so defined), if paid by means of a direct trustee-to-trustee transfer described in Code section
401(31)(A)to such other eligible retirement plan).
"Lifetime income feature" means: (a)a feature which guarantees a minimum level of income
annually(or more frequently) for at least the remainder of the life of the employee or the joint
lives of the employee and the employee's designated beneficiary,or(b)an annuity payable on
behalf of the employee under which payments are made in substantially equal periodic payments
(not less frequently than annually)over the life of the employee or the joint lives of the employee
and the employee's designated beneficiary.
E. Disaster or Coronavirus-Related Relief
Notwithstanding any provision of the Plan to the contrary,the Plan may grant temporary disaster
or coronavirus-related relief in compliance with Code sections 1400M and 1400Q, section 15345
of the Food,Conservation,and Energy Act of 2008, section 702 of the Heartland Disaster Tax
Relief Act of 2008, section 502 of the Disaster Tax Relief and Airport and Airway Extension Act
of 2017, section 11028 of the Tax Cuts and Jobs Act of 2017,section 20102 of the Bipartisan
Budget Act of 2018,subtitle II of Division Q of the Further Consolidated Appropriations Act,
2020, section 2202 of the Coronavirus,Aid,Relief and Economic Security Act,and Title III of
Division EE of the Consolidated Appropriations Act, 2021 ("Applicable Law"). This Section
only applies to the extent the Plan has provided some or all of the relief listed below in
compliance with Applicable Law.
A.Qualified Distributions
I. "Qualified Distribution" means a distribution to a qualified individual within the
applicable time periods as defined in the relevant sections of Applicable Law which
may not exceed$100,000 in aggregate from all plans maintained by the Employer.
II. If the Plan permits rollover contributions,at any time during the 3-year period
beginning on the day after the Qualified Distribution was received,an individual may
contribute as a rollover to the Plan an aggregate amount that does not exceed the
amount of the Qualified Distribution.
III. If the Plan permits rollover contributions,an individual who received a
withdrawal for the purchase of a home,but could not use the withdrawal amount due to
the disaster,may contribute as a rollover to the Plan an aggregate amount that does not
exceed the amount of the withdrawal amount within the applicable time periods as
defined in the relevant sections of Applicable Law.
B. Expanded Loan Provisions
I. The maximum loan limit under Code section 72(p)(2)(A)may be applied by
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substituting "$100,000"for"$50,000"and substituting "the present value" for"one-half
the present value" under the Loan Procedures for a qualified individual within the
applicable time periods as defined in the relevant sections of Applicable Law.
II. The loan repayment may be delayed for 1 year for a qualified individual within
the applicable time periods as defined in the relevant sections of Applicable Law.
Ill. Subsequent repayments will be adjusted to reflect the 1-year delay and any
interest accrued during such delay.
IV. The 1-year delay will be disregarded in determining the 5-year maximum term of
loans under Code section 72(p)(2)(B)and(C).
IN WITNESS WHEREOF, the Employer has caused this Amendment to be executed
this day of , 2023.
CITY OF ELGIN:
Signature:
Print Name:
Title/Position:
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CITY OF ELGIN DEFERRED COMPENSATION PLAN FOR PUBLIC EMPLOYEES
SUMMARY OF MATERIAL MODIFICATIONS
The purpose of this Summary of Material Modifications is to inform you of changes that have
been made to the City of Elgin Deferred Compensation Plan for Public Employees. These
changes affect the information previously provided to you in the Plan Description. The Plan
Description is modified as described below.
DISTRIBUTIONS
Under the "Time of Distribution" section, any reference to "age 70-1/2" is replaced with "age
70-1/2 (for Participants born before 07/01/1949) or age 72 (for Participants born after
06/30/1949)".
lnservice Withdrawals
Effective 07/01/2023, you may receive an inservice withdrawal from your Account if you have
not separated from employment after you attain: 59-1/2.
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