HomeMy WebLinkAboutC-3284 - PARS Supplemental Retirement Plan, Trust AgreementC'I
Public Agency Retirement System/
Alternate Retirement System
PARS -ARS
Documents
\pril21, 1000
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Table of Contents
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City of Newport Beach
Public Agency Retirement System (PARS)
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Alternate Retirement System (ARS)
Council Resolution
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IRS Favorable Letter of Determination
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PARS Trust Agreement
III
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PARS -ARS Plan Document
IV
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PARS -ARS Adoption Agreement
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Phase II Systems' Engagement Agreement
VI
PARS Request for Distribution Authorization
VII
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PARS Investment Information Supplement
VIII
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Prepared by Phase 11 Systems, PARS Trust Administrator
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RESOLUTION NO. 91 -106
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH APPROVING PARTICIPATION IN
THE PUBLIC AGENCY RETIREMENT SYSTEM (PARS).
WHEREAS, it is determined to be in the best interest of the
City of Newport Beach and its employees to provide a qualified
retirement system to all part -time employees, thereby meeting the
requirements of Section 11332 of the Social Security Act; and
WHEREAS, an alternative qualified defined contribution pension
plan entitled Public Agency Retirement system (PARS) is designed '.
for California Public Agencies; and
WHEREAS, the Public Agency Retirement System (PARS) qualifies
as a retirement plan in place of Social security coverage.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the
City of Newport Beach does hereby resolve, determine and order as
follows:
1. Adoption of the PARS pension plan effective January
1, 1992; and
2. The Director of Personnel is hereby appointed as the
Plan Administrator; and
3. The Plan Administrator is hereby authorized to
execute adoption, agreement and administration agreement and.;'= : ?(r:.:,.
other necessary actions to maintain the participation and
compliance with Section 11332 of the social Security Act and
' the relevant regulations issued or as may be issued.
ADOPTED, this 12th day of November, 1991
MAYOR
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CLERK
�0 \W(•`p? or /resol /reti nnt.res
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INTERNAL REVENUE SERVICE
DISTRICT DIRECTOR
P 0 BOX 2350 ROOM 5127
LOS ANGELES, CA 90053
Date: ac 14
CITY OF NEWPORT BEACH
C/O MYLES MARGADY
PHASE II SYSTEM
350 E SEVENTEENTH ST SUITE 212
COSTA MESA, CA 92627
Dear Applicant:
We have
' based on the
records.
DEPARTMENT OF THE TREASURY
Employer Identification Number:
95- 6000751
File Folder Number:
331004296
Person to Contact:
MARYANN JI14ENEZ
Contact Telephone Number:
(213) 725 -7099
Plan Name:
PUBLIC AGENCY RETIREMENT
SYSTEM CITY OF NEWPORT BEACH
Plan Number: 002
made a favorable determination on your plan, identified above,
information supplied. Please keep this letter in your permanent
Continued qualification of the plan under its present form will depend
' on its effect in operation. (See section 1.401- 1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
' reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
t Revenue Code. It is not a determination regarding the effect of other federal
or local statutes.
' This determination is subject to your adoption of the proposed amendments
submitted in your letter dated November 12, 1992. The proposed amendments
should be adopted on or before the date prescribed by the regulations under
Code section 401(b).
1 This determination letter is applicable for the plan adopted on
November 12, 1991.
' This letter is based upon the certification and demonstrations you sub-
mitted pursuant to Revenue Procedure 91 -66. Therefore, the certification and
' demonstrations are considered an integral part of this letter. Accordingly,
YOU MUST KEEP A COPY OF THESE DOCUMENTS AS A PERMANENT RECORD OR YOU WILL NOT
BE ABLE TO RELY ON THE ISSUES DESCRIBED IN REVENUE PROCEDURE 91 -66.
' We have sent a copy of this letter to your representative as indicated in
the power of attorney.
' �ECEtVED DEC l 6 ;pit
Letter 835(DO /CG)
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CITY OF NEWPORT BEACH
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If you have questions
concerning this matter, please contact the person
whose name and telephone number are shown above.
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Sincerely yours,
IVx ry •
Mi ael J�I. uinn "
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District Director
Enclosures:
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Publication 794
PWBA 515
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RECEIVED DFC
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Letter 835(DO /CG)
Public Agency
R S
Retirement System
TRUST AGREEMENT
Version 4
August 22, 1994
Copyright ® 1992 PHASE Il SYSTEMS. All rights reserved. Reproduction in part or whole is prohibited.
pg.I L C6 AASWOCUMGNTCURA_D TRSTCWK4(22 -AUG%)
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PUBLIC AGENCY RETIREMENT SYSTEM TRUST
Huntington Beach City School District and State Center Community College District (hereinafter referred
to as Employer ") do hereby adopt the following Retirement Plan Trust.
ARTICLE I
ELECTIVE PROVISIONS
1.1 Initial Deposit
In establishment of this Trust, the Employer has paid to Trustee the sum of at least One Thousand
Dollars ($1,000.00) as its initial contribution.
1.2 Effective Date
The effective date of this Trust is July 1, 1991.
1.3 Trustee
The Trustee is Imperial Trust Company or any successor(s) as named in any amendment hereto.
pg.I LANCEXPARAD000MSNT URR_DOMTRST4 .WK4(13•AUG94)
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ARTICLE II
PRELIMINARY MATTERS
' 2.1 The Trust
This trust and the related Public Agency Retirement System are all parts of a single, integrated
employee benefit system. The Trust's fiscal year shall be the Plan Year as the same may be changed
from time to time.
2.2 Definition of Terms
' In construing the terms of this Trust, words and terns defined in the Plan shall, when used herein,
have the same meaning as in the Plan, unless the context of this Trust clearly indicates otherwise.
' 2.3 Purpose
This Trust is created for the purpose of receiving contributions made under the Plan; accumulating,
' managing and investing those contributions; and providing benefits to the Participants of the Plan or
their Beneficiaries. This Trust may also be a complete amendment and restatement of its
predecessor, if any, pursuant to Section 3.
' This Trust is intended to evidence the Trust portion of an employee's retirement plan(s) and trust,
established by the adopting Employer for the benefit of eligible employees and to qualify as a
qualified employees' retirement trust under the appropriate provisions of the Internal Revenue
Code.
2.4 Reversion
In the event the Plan is terminated, the vested interest of any participant shall not be diminished or
adversely affected. Except as may be provided in this Trust or the Plan, such termination shall not
' vest in the adopting Employer any corpus or income under the. Trust, nor permit the Plan to
discriminate as to coverage, or as to allocation of contributions or earnings, in favor of employees
who are officers, shareholders, or highly compensated, nor cause the trust to loose its exemption
pursuant to Code Section 501 (a). No modification, amendment or termination of the Plan shall be
' construed a termination of the Trust so as to require the Trustee to make a distribution of any of
the Trust assets to any Participant, unless otherwise expressly provided pursuant to written
instructions from the Administrator.
' If any Employer participating in this Trust adopts a retirement plan whose assets are maintained in
this trust and makes application to the Internal Revenue Service, within one year from the date of
' adoption of such Plan, for a determination that such plan is a qualified plan under Section 401 (a) of
the Internal Revenue Code, and if such plan is determined by the Internal Revenue Service not to
be a qualified plan, then all contributions and investment income attributable to such plan shall be
returned to the Employer upon application to the Trustee.
2.5 Adoption by Other Employers
' Notwithstanding anything to the contrary, any other Employer whether an affiliate or subsidiary or
not, may adopt this Trust and all of the provisions hereof, and participate herein and be known as
an adopting Employer, by a properly executed document evidencing said intent.
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ARTICLE III
GENERAL ADMINISTRATION
3.1 Selection of Trustee
The initial two adopting Employers, by a unanimous vote, may appoint any individual, individuals,
institution or combination thereof to serve as Trustee. The Trustee so appointed, or any successor
Trustee appointed pursuant to a two -thirds vote of the Participating Employers, shall be deemed to
have accepted this Trust and to have agreed to carry out all of the provisions hereof.
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If the provisions of this Trust conflict with the provisions of the Plan, the Plan provisions shall be
followed.
3.3 The Administrator
Each adopting Employer shall designate an individual or position to serve as the Administrator.
The Administrator shall act on behalf of the Employer in all matters relating to this Plan and Trust.
The Employer shall keep accurate books and records with respect to its Employees, their service
with the Employer and their Compensation and shall certify the same to the Administrator.
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All directions to the Trustee from the Administrator must be in writing and need be signed by only
one Administrator. For all purposes of this Trust, "direction" shall include any certification,
notice, authorization, application or instruction of the Administrator and/or Trustee appropriately
' communicated. Direction shall be implied if the Administrator, having knowledge of the Trustee's
intentions, fail to file written objection at least 30 days prior to the completion of procedures
contemplated.
' The Trustee may request directions or clarification of directions received and may delay acting
until clarification is received. In the absence of timely received direction or clarification, or if the
Trustee considers any direction to be a violation of the Trust, the Employees Retirement Security
Act,'the Code, or any local law, the Trustee shall in its sole discretion take appropriate action, or
' refuse to act upon a direction, without incurring liability to the Administrator or participants for
such action or failure to act
' 3.5 Resignation or Removal of Trustee
II
The Trustee may resign at any time by giving at least ninety (90) days prior written notice to the
Administrator. The adopting Employer may remove the Trustee by giving at least ninety (90) days
prior written notice to the Trustee and withdrawing from the PARS Trust. In either case, the
Employer's appointment of a successor Trustee will vest the successor Trustee with title to the
withdrawing participation employer's Trust Fund Assets upon acceptance of such appointment.
1 pg.l UNCCNARS%DOCUM1 NMURR DOCITRST4.WK4(2 AUGA4)
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3.6 Co- Trustees
Where there is more than one Trustee, a majority of such Trustees shall be vested with the right to
make any decision, undertake any action or execute any documents affecting this Trust without the
approval of the dissenting Trustees. in the event there are co- Trustees, any directions (as defined
in Section 3.4) need to be executed by only one of the co- Trustees.
3.7 Trust Administrator
The Trust shall appoint a Trust Administrator to perform such administrative services as deemed
necessary by the Trustee, on behalf of, and at the direction of the Trustee.
The Trust Administrator may resign at any time by giving at least one hundred twenty (120) days
written notice: The adopting Employers, by a two-thirds majority vote, may remove the Trust
Administrator by giving at least one hundred twenty (120) days written notice to the Trust
Administrator and to the Trustee.
3.9 Trust Fund
The contributions received by the Trustee from each adopting Employer shall be held and
administered pursuant to the terms hereof without distinction between income and principal and
without liability for the payment of interest thereon except as expressly provided herein.
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ARTICLE IV
THE TRUSTEE
4.1 Investments
a) Fiduciary with Respect to Investments
Except as herein provided, the Administrator shall be the Fiduciary with respect to the
authority and duty to direct the investment and management (including the power to direct the
acquisition and disposition) of the Trust Assets:
' 1) The adopting Employer may, by resolution of its governing body, terminate the
Administrator's right to direct the investment and management of all or any portion of the
Trust Assets by transferring to the Trustee or an Investment Manager the authority and
' duty to direct the investment and management of all or any portion of the Trust Assets, as
the case may be.
2) The Employer may, but need not, by appropriate Administrator action appoint the Trustee
' or an Investment Manager to direct the investment and management including the power to
to acquire and dispose of) of all or any portion of the Trust Assets.
' b) A certified copy of any such Governing Body resolution or Administrator action pursuant to
Section 4.1 b) of this Trust shall be delivered to the Trustee, whereupon the Trustee or,
Investment Manager, as the case may be, shall assume fiduciary responsibility with respect to
the investment and management of such Trust Assets. Any transfer of investment authority to
the Trustee or to an Investment Manager may be revoked upon receipt by the Trustee of a
notice from either the adopting Employer through its governing body or the Administrator, as
the case may be. The appointment, selection and retention of a qualified Investment manager
' shall be solely the responsibility of the Administrator or the adopting Employer, as the case
may be. The Trustee is to rely upon the fact that said Investment Manager is authorized to
direct the investment and management of the assets of the aforesaid Trust until such time as
' the adopting Employer, or Administrator, as the case may be, shall notify the Trustee in
writing that another Investment Manager has been appointed in the place and stead of the
of the Investment Manager named, or, in the alternative, that the Investment Manager named
has been removed.
' c) When Trustee is not Directing Investments
During such period or periods of tire, if any, as the Administrator or an Investment Manager
' is authorized to direct the investment and management of the Trust Assets, the Trustee shall
(subject to the overriding limitations hereinafter set forth) effect and.change. investment of the
Trust Fund as directed in writing by the Administrator, or Investment Manager, as the.case
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maybe, and shall neither effect not change any such investments without such direction and
shall have no right, duty or responsibility to recommend investments or investment changes.
The following provision shall govern the Trustee during such period or periods.
' 1) So long as the Administrator retains or reacquires full power and responsibility to direct
the Trustee with respect to the investment and management of all or any portion of the
assets of the Trust Fund, the Trustee shall not be liable nor responsible for losses or
' unfavorable results arising from the Trustee's compliance with proper directions of the
Administrator which are made in accordance with the terms of the Plan and this Trust and
which are not contrary to the provisions of any applicable federal or state statute
regulating such investment and management of the assets of an employee benefit trust.
' 2) In the event that an Investment Manager is given full authority and responsibility with
respect to the investment and management of the Trust Assets, the Trustee or the
' Administrator shall not be liable or responsible in any way for any losses or other
unfavorable results arising from the Trustee's compliance with investment or
management directions received by the Trustee from the Investment Manager.
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3) All directions concerning investments made by the Administrator or the Investment
Manager shall be signed by the authorized person or persons acting on behalf of the
Administrator or the Investment Manager, as the case may be.
4) The Trustee shall be entitled to rely upon directions which the Trustee receives. The
Trustee shall be under no duty to question any directions of the Investment Manager or
Administrator nor to review any securities or other property of the Trust constituting
assets thereof with respect to which an Investment Manager has investment responsibility,
nor to make any suggestions to such Investment Manager in connection therewith. The
Trustee shall, as promptly as possible, comply with any written directions given by the
Administrator or an Investment Manager hereunder. The Trustee shall not be liable, in
any manner nor for any reason, for the making or retention of any investment pursuant to
such directions, nor shall the Trustee be liable for its failure to invest any of all of the
Trust Funds in the absence of such written directions.
5) During such period of time, if any, as the Administrator or an Investment Manager is
authorized to direct the Trustee, the Trustee shall have no. obligation to.determine the
existence of any conversion, redemption, exchange, subscription or other right relating
to any securities purchased of which notice was given prior to the purchase of such
securities, and shall have no obligation to exercise any such right unless the-Trustee
is informed of the existence of the right and is instructed to exercise such right, in
writing, by the Administrator or the Investment Manager, as the case may be, within a
reasonable time prior to the expiration of such right.
6) In any event, neither the Administrator nor any Investment Manager referred to above
' shall direct the purchase, sale or retention of any assets of the Trust Fund if such
directions are not in compliance with the applicable provisions of the Act and any
regulations or rulings issued thereunder.
4.2 Trustee Fees
' As maybe agreed upon from time to time by the.adopting. Employer and Trustee, the Trustee will
be paid reasonable compensation for services tendered or reimbursed for expenses properly and
actually incurred in the performance of duties with respect to the Trust.
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In the absence of specific arrangement for such payments, any fee or other compensation or
reimbursed expenses shall be withdrawn by the Trustee from the Trust, unless paid by the adopting
Employer. Such compensation shall include accounting, legal and administrative services-rendered.- .
by or to the Trustee unless specifically excluded by appropriate written agreement.
To the extent that the Trustee fees are to be charged against Participant contributions, the
adopting Employer shall so advise each Participant
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4.3 Contributions
The adopting Employer shall make all of its contributions to the Trustee, and shall also transmit all
contributions of its Participants, as may be required or allowed by the Plan. Such contributions
shall be in cash. All contributions shall be paid to the Trustee for investment and reinvestment
' pursuant to the terms of this Trust Agreement. The Trustee shall not have any duty to determine
or inquire whether any contributions to the Trust made to the Trustee by any adopting Employer
are in compliance with the Plan; nor shall the Trustee have any duty or authority to compute any
' amount to be paid to the Trustee by any adopting Employer; nor shall the Trustee be responsible
for the collection or adequacy of the Trust to meet and discharge liabilities under the Plan.
4.4 Directing Investments
' Except as provided in Section 4.1 a), the Administrator shall have the power to direct the
investments of all monies held by Trustee and constituting part of the Trust Fund hereunder.
' However, pending any investment directions, such cash in the Trust Fund in an amount as is
reasonable in the discretion of the Trustee shall be deposited in an interest- bearing account,
which may be an interest- bearing account of Trustee.
' 4.5 Purchase of Contracts
The Trustee shall purchase individual or group insurance, annuity, preliminary term, group
' pension, and variable annuity contracts in accordance with the directions of the Administrator.
4.6 Records
' The Trustee shall maintain accurate records and detailed accounts of all investments, receipts,
disbursements and other transactions hereunder. Such records shall be available at all
reasonable times for inspection by the Administrator or its designated consultants and the
1 Employer or its authorized representative. The Trustee shall, at the direction of the Administrator,
submit to the Administrator or its designated consultants such valuations, reports or other
information as the Administrator or its designated consultants may reasonably require.
' 4.7 Statements
' The Trustee shall render to the Administrator, as soon as practicable after each Plan Year, a
statement of its accounts pursuant to this Section 4.7 on the basis of the Trusts established
accounting period. If Trustee is a bank, it shall render the statement within sixty (60) days after
the Plan Year end. If the Trustee maintains separate accounts for each Participant, it shall also
' render to each Participant an annual statement of his Participant Account.
The Administrator may approve such statements either by written notice or by. failure to express
' objections to such statement by written notice delivered to the Trustee within 90 days from the
date the statement is delivered to the Administrator. Upon approval, the Trustee shall be
released and discharged as to all matters and items set forth in such statement as if such account
had been settled and allowed by a decree from a court of competent jurisdiction.
4.8 Pooled Funds
' The assets of this Trust may be pooled in a fund for employee benefit plans maintained by the
Trustee for any other retirement plan or may be pooled with the assets of any other retirement
plan maintained by an adopting Employer, or both.
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4.9 De Ration of Duties
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The adopting Employer, or the Administrator, or both, may at any time retain the Trustee as their
agent to perform any act, keep any records or accounts and make any computations which are
required of the Employer, or the Administrator by this Trust or the Plan. The Trustee may be
compensated for such retention and such retention shall not be deemed to be contrary to this
Trust.
4.10 General Authority
Subject to the Fiduciary provisions of this Trust, the Fiduciary responsible for investment and
management of the Trust Assets shall have full power and authority to invest and reinvest all or
any portion of the Trust Fund in any investment permitted by the laws of the State in which the
Trustee administers this Trust, including, without limiting the generality of the terms thereof, the
power:
a) To invest in bonds, notes, mortgages, commercial paper, preferred stock and common
stock: other securities (including puts, calls -and stock options), rights and-obligations; any
real or personal property; insurance company contracts; shares or certificates of
participation issued by investment companies, investment trusts and mutual funds; grant
options to purchase any real or personal property upon such terms and conditions as
Trustee deems proper.
b) To agree with an insurer for the insurer's investment of any part or all of the trust fund or
for the investment in one or more of the insurer's separate Accounts or other funds, and to
deposit with such insurer all amounts so agreed upon.
c) To agree with an insurer for the conversion of any part or all of the trust fund annuities for
the benefit of the trust fund into annuities for the benefit of Participants upon their
retirement.
d) To retain any investment for such period of time as Fiduciary deems appropriate and to sell
the same, at either public or.private sale, at such time or times and on such terms and
conditions as to credit or otherwise as the Fiduciary may deem appropriate.
e) To renew or extend the time of payment of any obligation due or becoming due.
' f) To borrow money, with or without giving security; and to borrow on contracts.
' g) To consent to or participate in any plan for the reorganization, consolidation or merger of
any corporation of which any security is held for the Trust; to pay any and all calls and
assessments imposed upon the owners of such securities as a condition of thew
' participation therein; and to consent to any contract, lease, mortgage, purchase or sale of
property by or between such corporation and any other corporation or person.
h) To compromise, arbitrate or otherwise adjust or settle claims in favor of or against the Trust
' and to deliver or accept in either total or partial satisfaction of any indebtedness or other
obligation any property; and to continue to hold for such period of time as the Trustee
deems appropriate any property so received.
' 1) To vote any stock or other security held for the Trust and to execute and deliver any
proxies or powers of attorney to such person or persons as the Trustee deems proper,
granting to such person or persons such power and authority with relation to any property
t or securities at any time held for the Trust, provided, however, that, irrespective of whether
the Trustee has been designated as the fiduciary responsible for investment and
management of the Trust Assets, the powers enumerated in this subparagraph 0) shall be
exercised by the Trustee unless the Trustee shall receive written notice to the contrary
from the Administrator or other Fiduciary responsible for directing the investments.
' M8 LA E MS)WCUMENTCURa_DO ntST4.WM(n -AU )
' j) To sue or defend in connection with any and all securities or property at any time received
or held for the Trust, and all costs and attorney's fees in connection therewith shall be
charged against the Trust.
k) To lease real and/or personal property held for the Trust for such term or terms, and upon
such conditions, as the Trustee deems appropriate.
1) To cause any securities held for the Trustee to be registered and to carry any such
securities in the name of a nominee or nominees.
m) To hold in cash such portion of the Trust Fund as it may deem necessary for the ordinary
administration of the Trust and the disbursement of funds as directed from time to time by
' the Administrator, and for the temporary investment of such cash pending the receipt
thereto, by depositing such cash immediately upon receipt in any type of interest bearing
account, including, but not limited to, bank savings accounts and/or Time Certificates of
' Deposit maintained at any commercial and/or savings department of any bank (including
the Trustee if the Trustee also is a banking institution), subject to the rules and regulations
governing such deposits and without regard to the amount of such deposit.
' n) To effect any agreement with an Insurer which the'Trustee deems necessary to -carry out
the purposes of this Trust and to pay all premiums on contracts held hereunder. ...
' 4.11 Distributions
a). All benefits payable pursuant to the Plan shall be paid out of the assets of this Trust by the
Trustee pursuant to the direction of the Administrator. The Trustee shall, from time to time,
' upon the written direction of the Administrator, make distributions from the Trust Fund to or
for the benefit of such persons, in such manner, in such form(s), in such amounts and for
such purposes as may be specified in such directions. The Trustee at the direction of the
' Administrator may make any distribution required to be made by it hereunder by delivering
to the Administrator or its authorized designee:
' 1) Its check payable to the person to whom such distribution is to be made, for delivery
to such person; or
' 2) Its check payable to an insurer for the benefit of such person, for delivery by such
insurer; or
3) Insurance Contracts held on the life of the Participant to whom or with respect to
whom the distribution is being made, for redelivery to the person to whom such
distribution is. to be made; provided that any contract distributed shall be endorsed as
non- transferable.
' b) In directing the Trustee to make distributions, the Administrator shall follow the provisions
of the Plan" and shall not direct that any distribution be made either during the existence or
upon discontinuance of the Plan, which would cause any part of the Trust Fund to be used
' for or diverted to purposes other than as provided in the Plan and this Trust. In no event
shall the Trustee have any responsibility respecting the application of.such distributions,
nor for determining or inquiring into whether such distributions are in accordance with
' the Plan.
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ARTICLE V
FIDUCIARY RESPONSIBILITIES
5.1 More Than One Fiduciary Capacity
Any one or more of the named or identified Fiduciaries with respect to this Trust and the Plan
may, to the extent required thereby or as directed by the Employer and/or Administrator pursuant
to this Trust and the Plan, serve in more than one Fiduciary capacity with respect to this Trust and
the Plan.
5.2 Fiduciary Discharge of Duties
Except as otherwise provided in the Code, each Fiduciary shall discharge such Fiduciary's duties
' - with respect to this Trust and the Plan solely in the interest of the Participants and Beneficiaries:
a) For the exclusive purpose of:
1) providing benefits to Participants and their Beneficiaries, and
2) defraying reasonable expenses of administering the Plan.
b) With the care, skill, prudence, and diligence under the circumstances then prevailing that a
prudent man acting in a like capacity and familiar with such matters would use in the
' conduct of an enterprise of like character and with like aims.
c) By diversifying the investments of the Plan and this Trust so as to minimize the risk of large
losses, unless under the circumstances it is clearly prudent not to do so.
' 5.3 Prohibited Transactions
' Except as hereinafter set forth; each.Fiduciary.with respect to.this.Trust shall not cause this Trust
to engage in any or all of the prohibited transactions set forth in Section 406(a) of the ERISA
retirement security act ( "Act"). However, the foregoing limitations shall not apply with respect to
any conditional or unconditional exemption or variance granted under Section 408 of the Act
' and/or Section 4975 of the Code (whichever shall be relevant) and/or under any regulation
promulgated thereunder and/or any proper interpretation of the Congressional Conference
Committee Joint Explanation of the Pension Reform Act of 1974 as applicable to governmental
' plans and/or any administrative pronouncement so:long:as.the same shall not be. abrogated by
subsequent legislation, regulations, court decisions, rulings and procedures.
1 5.4 No Foreign Situs
Except as authorizedby applicable Labor Regulations, no Fiduciary shall maintain the indicia of
ownership on any Trust Assets of the Plan or this Trust outside the jurisdiction of the district
' courts of the United States.
5.5 Limitations on Fiduciary Responsibility
' To the extent permitted by the Act:
a) No Fiduciary shall be liable with respect to a breach of fiduciary duty by any other fiduciary
if such breach was committed before such person became a fiduciary or after such person
' ceased to be a fiduciary.
b) Each Fiduciary shall bear only such liability for breach of any fiduciary responsibility as is
imposed by the Act; and the inclusion in this Trust and the Plan of provisions comparable
to those in the Act and/or the Code is intended for the information and guidance of the
parties hereto and all fiduciaries and not to increase such fiduciaries' liabilities,
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responsibilities, duties and obligations by reason of such inclusion, except as required by
the Act or the Code.
c) The Employer shall indemnify and hold harmless the members of the governing body, the
Administrator, the Trustee (except if Trustee is a bank, trust company or similar institution)
and any other persons to whom any fiduciary responsibility with respect to this Trust and
the Plan is allocated or delegated from, and against any and all liabilities, costs and
expenses incurred by such persons as a result of any act, or omission to act, in connection
with the performance of such person' duties, responsibilities and obligations under this
Trust, the plan and under the Act, other than such liabilities, costs and expenses as may
result from the negligence, gross negligence, bad faith, willful misconduct and/or criminal
acts of such persons.
5.6 Indemnification of Trustee
The adopting Employer agrees to indemnify the Trustee against, and to hold the Trustee harmless
from, all liabilities and claims (including reasonable attorney's fees and expenses in defending
against such liabilities and claims) against the Trustee -as a result of any breach -of fiduciary
responsibility by a Fiduciary other than the Trustee unless the Trustee participates knowingly in
such breach, knowingly undertakes to conceal such-breach, has actual knowledge of such -
breach and fails to take reasonable remedial action to remedy such breach or, through its gross
negligence . in performing its own specific fiduciary responsibilities, has enabled such other
fiduciary to commit a breach of the latter s fiduciary responsibilities.
5.7 Indemnification of Emnlover
' The Trustee agrees to indemnify the Employer against, and to hold the Employer harmless from,.
all liabilities and claims (including reasonable attorneys' fees and expenses in defending against
such liabilities and claims) against the Employer as a result of any breach of fiduciary responsibility
' by a fiduciary other than the Trustee where the Trustee participates knowingly in such a breach,
knowingly undertakes to conceal such breach, has actual knowledge of such breach and fails to
take reasonable action to remedy such breach, or through its negligence in performing its own
' specific fiduciary responsibilities has enabled such other fiduciary to commit a breach of the
latter's fiduciary responsibilities.
II
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' M11 LANCETA WCUhffilRCURR_a TRSr4.WK4(M -AU&W)
ARTICLE VI
AMENDMENT, TERMINATION & MERGER
0
6.1 Permanency
• It is the expectation of the Employer that this Trust, and the permanency of contributions
hereunder, will be continued indefinitely, but continuance of this Trust and of the Plan is not
. assumed as a contractual obligation of the Employer. This Trust may be amended or terminated
only as provided in this Trust.
6.2 Amendments
a) A two -thirds majority of the Employers acting through the Administrators shall have the
right to amend this Trust from time to time, and to similarly amend or cancel any
. amendments. A copy of all amendments shall be delivered to the Trustee and
Administrators promptly as each is made.
b) Such amendments shall be set forth in an instrument in writing executed by the amending
party and the Trustee. Any amendment may be current, retroactive or prospective, ..
provided, however, that no amendment shall:
1) Cause any of the assets of this Trust to be used for or diverted to purposes other than
for the exclusive benefit of Participants, retired Participants or their joint annuitants
and their Beneficiaries who have an interest in this Trust or for the purpose of
■ defraying the reasonable expenses of administering this Trust.
2) Have any retroactive effect so as to reduce the Benefits of any Participant under this
Trust to the date the amendment is adopted, except that such changes may be made
as may be required to permit this Trust to meet the requirements of the Act and Code.
N
■
3) Create or effect any discrimination prohibited by the Code in favor of Participants who
are highly compensated, who are officers of the Employer.
4) Change or modify the duties, powers or liabilities of the Trustee hereunder without its
consent.
S) Permit the assets of this Trust to be used for the benefit of any other Plan of the
Employer unless the Employer agrees to such use.
6.3 Termination
. The Employers shall have the right to terminate this Trust by a unanimous vote of all members
acting through the Administrators and by delivering written notice of termination to Trustee. A
termination by the Employer of its Plan shall not, in itself, effect a termination of this Trust. Upon
any termination of the Plan, the Trust Fund shall be distributed by the Trustee as and when
directed by the Administrator. From and after the date of such termination of the Plan and until
final distribution of the Trust Fund, the Trustee shall continue to have all the powers provided
0
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0
1 pg.12 LANCE AkMDOCUAII+ MURR_UOL\77L4'r4.WK4(T AUrl")
therein as are necessary or expedient for the orderly liquidation and distribution of the Trust
Fund and this Trust shall continue until all Participants' Accounts have been completely
distributed to or for the benefit of the Participants or their Beneficiaries in accordance with the
Plan.
6.4
Except as hereinafter provided, the assets of the Plan and this Trust shall never inure to the
' benefit of the Employer and the same shall be held for the exclusive purposes of providing
benefits to Participants in this Trust and their beneficiaries and defraying reasonable expenses
of administering this Trust. The sole exception to the foregoing is as follows:
' a) Mistake of Fact
In the case of a contribution which is made by the Employer by a mistake of fact, that
' portion of the contribution relating to the mistake of fact (exclusive of any earnings or less
any trust losses attributable thereto) may be returned to the Employer, provided such
return occurs within one (1) year after discovery -by the Employer of the mistake:
' If any repayment is payable to the Employer, then, as a condition to such repayment, and only if
requested by Trustee, the Employer shall execute, acknowledge and deliver to the Trustee its
written undertaking, in form satisfactory to the Trustee, to indemnify, defend and hold the Trustee
harmless from all claims, actions, demands or liabilities arising in connection with such repayment.
6.5 Transfers from Other Qualified Plans
' Notwithstanding any other provision hereof, there may be transferred to the Trustee, upon
direction of the Administrator, all or any of the assets held (whether by a Trustee, custodian or
t otherwise) on behalf of any other plan which satisfied the applicable requirements of Section 401
of the Code, and which is maintained for the benefit of any persons who are or are about to
become Participants in the Employer's Plan.
1
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r,
LJ
pg. 13 L"Ct:IVAkSOOCIWNTICU�DOOTRST4.W 4(] AUC.%)
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ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1 Third Persons
All persons dealing with the Trustee are released from inquiring into the decisions or authority of
the Trustee and from seeing to the application of any securities or other property paid or delivered
to the Trustee.
7.2 Nonalienation
The balances in a Participants Employer Contribution Account may not be assigned or alienated,
except that he may voluntarily and revocably assign up to ten percent (10 %) of the balances in
his Accounts once he is receiving distribution, so long as the assignment or alienation is not for
the purpose of defraying Plan administration costs. For purposes of this Section, a garnishment
or levy is not considered to be a voluntary assignment, and a loan to the-Participant; or his
Beneficiary in the event of the Participants death, shall not be treated as an assignment or
alienation if such loan is secured by the Participants nonforfeitable Employer Contribution
Account, and is not a prohibited transaction within the meaning of Section 4975 of the Code.
7.3 Saving Clause
7.4
' 7.5
In the event any provision of this Trust is held illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining parts of the Trust Agreement, but this instrument shall be
construed and enforced as if said provision had never been included.
This Trust shall be construed, administered and governed under the Act and the Code; and to the
extent any of the provisions of this Trust and/or the Plan are inconsistent with the Act and/or the
Code, the provisions of the Act and/or Code shall control. This Trust shall be construed,
administered and governed by the laws of the State in which the Trustee administers this Trust,
but only to the extent the,laws of such State have not been superseded, or are not inconsistent
with the Act and the Code. In the event, however, that any provision is susceptible to more than
one interpretation, such interpretation shall be given thereto as is consistent with this Trust and
the Plan being a qualified retirement Trust and Plan within the meaning of the Act and the Code.
In any action or other judicial proceedings affecting this Trust, it:shall be necessary to join as
' parties only the Trustee, the Administrator, and the Employer. No Participant or other persons
having any interest in this Trust shall be entitled to any Notice or service of process unless
otherwise required bylaw. Any judgment entered in such a proceeding or action shall be binding
' on all persons claiming under this Trust, provided, however, that nothing in this Trust shall be
construed as to deprive a Participant of such Participanfs right to seek adjudication of such
Participants rights under the Act.
pg. 10 L CEIPA DOCUNMNRCURR_DOO\ T4.w 4(22.AU&W)
1
1 7.6 Employment of Counsel
The Trustee may consult with legal counsel (who may be counsel for the Trustee or Employer).
1 7.7 Gender and Number
Words used in the masculine, feminine or neuter gender shall each be deemed to refer to the other
1 whenever the context so requires; and words used in the singular or plural number shall each be
deemed to refer to the other whenever the context so requires.
1 7.8 eadin s
Headings used is this Trust are inserted for convenience of reference only and any conflict between
1 such headings and the text shall be resolved in favor of the text.
7.9 Counterparts
' This Trust may be executed in an original and any number of counterparts by the Employer and the
Trustee, each of which shall be deemed to be an original of the one and the same instrument.
IN WITNESS WHEREOF, two - thirds of the participating employers as required by Section 6.2, and Trustee
have executed this Trust by their duly authorized agents on this 19 day of October,-"l 994
1 ACKNOWLEDGED AND ACCEPTED this 19 day of October, 1994
The Bank of California
1 TRUSTEE ton
BY
DiMalanta, Senior Vice President
1 By. �J
Ilona (Lonnie) Gartner, Vice Pres., Trust Officer
Phase II Systems
1 TRUST ADMINISTRATOR
1 By.
M.C. J n on, President
1
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1 pe. 15 LANCwAa81➢oCUABNI`,MT P(W%nST4.W 422-AUG•W1
' JUL-11- 1994 12:09 PHASE II SYSTEMS 7146312063 P.02/02
' SECOND AMENDMENT TO THE PUBLIC AGENCY RETIREMENT SYSTEM TRUST
WHEREAS, the Public Agency Retirement Trust ( "PARS Trust") was established by
'participating public agencies in the State of California to hold the assets for funding tax qualified
retirement plans established by such agencies, and
'WHEREAS, the PARS Trust provides under Section 3.1 for appointment of a successor Trustee
by vote of the participating Agencies, and
'WHEREAS, the proposed successor Trustee, Bank of California, agrees to accept fiduciary
investment liability as investment manager when requested in writing by a Participating
Agency's Plan Administrator, and further to accept the Hartford Life Insurance Company's Group
Annuity Contract GA -5278, and the Los Angeles and Orange County Local Agency investment
Funds into the Trust, and
'WHEREAS, the proposed successor Trustee, Bank of Califomia, agrees, when appointed by
the Participating Agency, as Discretionary Trustee with investment powers, assets will be
invested in accordance with Section 4.10 of the Trust, and further agrees as Discretionary
'Trustee to accept sole authority to manage Investments until notified in writing by the Plan
Administrator of the appointment of a replacement by said Plan Administrator, or a separately
selected Investment.Manager. The Trustee further agrees to act as a Directed Trustee in the
event of replacement as Discretionary Trustee, and retains the right to approve any PARS
investment, and
' WHEREAS, the Trust Administrator, in order to continue b duties on behalf of Participating
Agencies, requires continued authorization to sign distribution requests; contribution and
Investment designation arrangements, and general letters of instruction to the successor
' Trustee,
'NOW THEREFORE, the third paragraph of the PARS Trust is amended to read "Section 62'
instead of "Section 6.3 ", and Section 5.7 should read "gross negligence" instead of
"negligence "., and
' BE IT FURTHER RESOLVED, that the Bank of Califomis be appointed Trustee of the PARS
Trust, and that the necessary authorization, and corrections be made, as described above.
h
' tMM IS101. 13 9%
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EXHIBIT III
PARS Trust - Restatement
The Bank of California required Section 5.7 (Indemnification of Employer) be changed from "negligence"
to "gross negligence" as was the case in 5.6 (Indemnification of Trustee) and the change was approved by
over two- thirds of the participating agencies' Plan Administrators.
A strong objection was made to this change by one PARS Agency's counsel. As a result, the Bank of
California has agreed to accept Section 5.7 without "gross negligence" for all PARS agencies. The
concession is much appreciated and evidences the type of cooperation we have been receiving during the
transition period.
In the interest of simplicity, the PARS Trust has been restated to reflect the following changes:
1) Section 3.5 (Resignation or Removal of Trustee) on page 3 changes
prior written notice from 30 to 90 days.
Comment: The recent change of Trustees evidenced the need
for more time.
2) Section 5.7 (Indemnification of Employer) is added to page 11 without
"Gross'.
Comment: This eliminates the need for Amendment One.
3) The Bank of California accepts Trustee appointment effective the 1 st
of August, 1994 on page 16.
Comment: This replaces the former Trustee, Imperial Trust Company
and eliminates the need for Amendment Two.
Approval of this PARS Trust Restatement requires the two- thirds vote as described in 6.2 on page 12 of
the Trust Agreement. Therefore, please again show evidence of acceptance of the above three changes
in the restated Trust Agreement by signing and returning a copy of this letter. A date will be indicated on
page 16 after the two- thirds approval has been received and a copy of this page will be sent to you.
ACCEPTANCE OF PARS TRUST RESTATEMENT
Employer:
Plan Administral
Title:
Signature:
Date:
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P A R S
Public Agency Retirement System
PLAN DOCUMENT
CITY OF NEWPORT BEACH
Copyright c 1991 PHASE 11 SYSTEMS. All rights reserved. Reproduction in part or whole is prohibited.
1
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INTRODUCTION
The Public Agency Retirement System Trust has adopted the following Defined Contribution Plan on
behalf of affiliated government agencies for the benefit of their employees. It is intended that this Plan
meet all requirements for qualification as a profit - sharing plan set forth in the Code as amended from
time to time, for governmental plans. If any provision of this Plan is subject to more than one
interpretation, such ambiguity shall be resolved in favor of that interpretation which is consistent with
this Pension Plan being so qualified.
I
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1
TABLE OF CONTENTS
ARTICLE
I
DEFINITIONS
II
ELIGIBILITY REQUIREMENTS
III
CONTRIBUTIONS
IV
INVESTMENT OF CONTRIBUTIONS
V
VESTING
VI
DISTRIBUTIONS
VII
TERMINATION OF EMPLOYMENT
VIII
DEATH BENEFITS
DC
ADMINISTRATION
X
AMENDMENT AND DISCONTINUANCE OF THE PLAN
XI
MISCELLANEOUS
2
3
7
8
9
10
11
13
14
15
16
17
' ARTICLE I
' DEFINITIONS
1.01 'Administrator" means the Employer.
1.02 "Adoption Agreement" means the Public Agency Retirement System (PARS) Adoption Agreement.
' 1.03 "Beneficiary" means any person or persons, other than the Employer or the Trustee, designated by a
Participant to receive any distributions under this Plan which may be due upon the Participant's
death. The Beneficiary for a married Participant shall be the Spouse of the Participant and may not
be changed to someone other than the Spouse unless Spousal Consent is provided.
1.04 " Code" means the Internal Revenue Code of 1986 and amendments thereto.
1.05 (a) "Compensation" means all compensation for the Plan Year paid or payable in cash by the
Employer for personal services to an Eligible Employee. This definition of "Compensation"
shall be subject to the further provisions of this Article, as well as the additional terms, if
' any, specified by the Employer in the Adoption Agreement.
(b) "Compensation" shall not include any amounts paid or payable by reason of services
performed (1) after the date an Employee ceases to be a Participant, or (2) prior to the date
' an Employee becomes a Participant.
(c) "Compensation' shall not include, with respect to any Employee, in any Plan Year (or such
other applicable period specifically designated in the Plan), any compensation in excess of
' $200,000 or such other amount established by the Secretary of Treasury in accordance with
Section 401(a)(17) of the Code. In addition, Compensation shall not include any amounts
contributed by an Employer, for or on account of Employees, under this Plan or under any
' other employee benefit plan qualified under the provisions of Section 401(x) of the Code.
(d) For purposes of the Highly Compensated Employee and Family Member definition:
' (1) Compensation shall mean total compensation as defined herein without regard to contri-
butions trade under Sections 125, 402(a)(8), 402(h)(1)(B) and, in the case of Employer
' Contributions made pursuant to a salary reduction agreement, 403(b) of the Code.
(2) Compensation paid to a Participant for. any Plan Year shall include all Compensation for
that Plan Year paid to any Family Member (hereafter defined) who is a Participant in
tthis Plan during such Plan Year.
(3) "Family Member" shall mean an Employee who is, on any one day of the Plan Year, a
t spouse, lineal ascendant, lineal descendant, or a spouse of an ascendant or descendant,
including a legally adopted individual, of an individual who during the Plan Year was:
' (A) an active or former Employee and a five percent (5%) owner within the meaning of
Section 416(i)(1)(B)(i) of the Code and the regulations thereunder, or
(B) one of the ten most highly -paid Highly Compensated Employees.
H
1.06 "Computation Period" means the Plan Year.
1.07 "Determination Date" means with respect to any Plan Year (a) the last day of the preceding Plan
Year, or (b) in the case of the first Plan Year of the Plan, the last day of such Plan Year.
' 1.09 "Effective Date" means the effective date of this Plan as stated in the Adoption Agreement.
1.09 "Eligible Employee" means any Employee who, at any time during which the Employer
maintains this Plan, is not accruing a benefit under another Retirement System provided or
maintained by the Employer. This definition of "Eligible Employee" shall be subject to the
additional terms, if any, specified by the Employer in the Adoption Agreement.
I(a) (1) Each hour for which an Employee is paid, or entitled to payment, for the performance of
duties for the Employer during an applicable computation period.
1.10
"Employee" means any person employed by the Employer on or after the Effective Date of this
'
Plan.
'
1.11
"Employee After Tax Contributions" means Employee Contributions which are not Pick Up
(2) For purposes of paragraph (1) above a leave of absence shall include the absence of an
Contributions.
1.12
"Employee Contribut ions" means contributions made to the Trust by the Participant, or made to
'
'
the Trust by the Employer on behalf of the Participant as Pick Up Contributions.
1.13
"Employee Contribution Account" means the value of the Participant's interest in this Plan which
is attributable to Employee Contributions and Employee After Tax Contributions, determined as of
'
a specified Valuation Date.
1.14
" Employer" means the Public Agency which by means of executing the Adoption Agreement has
'
adopted this Plan subject to the terms of the Trust.
1.15
"Employer Contributions' means contributions made to the Trust by the Employer on behalf of
the Participant which are not Pick Up Contributions.
1.16
"Employer Contribution Account" means the value of the Participant's interest in this Plan which
'
is attributable to Employer Contributions, determined as of a specified Valuation Date.
1.17
"Hour of Service" means:
I(a) (1) Each hour for which an Employee is paid, or entitled to payment, for the performance of
duties for the Employer during an applicable computation period.
(b) (1) Each hour for which an Employee is paid, or entitled to payment, by the Employer
'
(irrespective of whether the employment relationship has terminated) on account of a
period of time during which no duties are performed due to vacation, holiday, illness,
'
disability, layoff, jury duty, military duty, or a paid leave of absence during the
applicable computation period.
(2) For purposes of paragraph (1) above a leave of absence shall include the absence of an
Employee due to pregnancy of the Employee, birth of a child of the Employee, placement
of a child with the Employee in connection with the adoption of such child by the Employee
or the caring for such child for a period beginning immediately following such birth or
'
placement. If an Employee has already been credited with a sufficient number of Hours of
I
' Service during the computation period in which a leave of absence occurs as described in
this paragraph (2) in order to avoid a break in service, then such Hours of Service that
' would have been credited pursuant to this paragraph (2) will be credited to the next
immediate computation period.
' If the normal number of Hours of Service cannot be determined for an Employee who is
on sick leave of absence as described in this paragraph (2) then eight Hours of Service for
each day while the Employee is absent shall be used.
' (3) For purposes of this paragraph (b) no more than 100 Hours of Service will be credited to
an Employee during any single Computation Period. The crediting of Hours of Service
under paragraph (2) will be solely for the purpose of determining whether the Employee
' has incurred a break in service.
(c) Each hour for which back pay, irrespective of mitigation of damages, is either awarded or
agreed to by the Employer.
(d) Solely for purposes of determining whether a break in service for participation and vesting
purposes has occurred in a computation period, an individual who is absent from work for
' maternity or paternity reasons shall receive credit for the hours of service which would
otherwise have been credited to such individual but for such absence, or in any case in
which such hours cannot be determined, eight (8) hours of service per day of such absence.
' For purposes of this paragraph, an absence from work for maternity or paternity reasons
means an absence (1) by reason of the pregnancy of the individual, (2) by reason of the birth
of a child of the individual, (3) by reason of the placement of a child with the individual in
' connection with the adoption of such child by such individual, or (4) for purposes of caring
for such child for a period beginning immediately following such birth or placement. The
hours of service credited under this paragraph shall be credited (1) in the computation period
in which the absence begins if the crediting is necessary to prevent a break in service in that
' period, or (2) in all other cases, in the following computation period.
1.18 "Insurer" means any legal reserve life insurance company licensed to do business in the State
' of California.
1.19 "Inactive Participant" means a Participant who is no longer eligible to participate because he is no
longer in the class of Employees eligible to participate under the provisions of Article II.
1.20 "Normal Retirement Age" means sixty (60) years of age.
' 1.21 "Normal Retirement Data" means the first of the month coincident with or next following the date
on which the Participant attains Normal Retirement Age.
1.22 "Participant" means an Eligible Employee who has received Compensation from the Employer.
' 1.23 "PERS" means the California Public Employees Retirement System.
1.24 "Permanent and Total Disability" means presumably permanent incapacity in accordance with the
' definition used by the Federal Social Security Act occurring after the Effective Date and resulting
in a Participant being unable to engage in any regular gainful employment or occupation by reason
of any medically demonstrable physical or mental condition. Such Disability shall be deemed to
' exist only when written application has been filed with the Employer by or on behalf of such
1
1 6
Participant and when such Disability is certified to the Employer by a licensed physician approved
by the Employer. Such Disability will not be considered established unless it has continued for a
'
period of not less than six (6) consecutive months.
1.25
"Pick Up Contributions" means Employee Contributions made by the Employer on behalf of the
Participant pursuant to Section 414(6) of the Code. Pick Up Contributions shall not, under any
'
circumstances, be paid to the Participant or be directed by the Participant to be paid for any
purpose except as Pick Up Contributions to this Plan. The Employer may make Pick Up Contri-
butions through a reduction in salary, an offset against future salary increases, or a combination of
'
the two.
1.26
'Plan" means the Public Agency Retirement System (PARS), a governmental plan as it may from
time to time be amended.
1.27
"Plan Year" means a period of twelve (12) consecutive months as stated in the Adoption Agreement.
1.29
"Public Agency" means a State, a political subdivision of a State, and any agency or instrumentality
of a State or political subdivision of a State.
1.29
"Retirement System' means any plan which meets the requirements for a retirement system under
'
Section 3121(b)(7)(F) of the Code and regulations thereunder.
1.30
"Spousal Consent" means a written election signed by the Spouse to have someone other than the
Spouse considered the Participant's Beneficiary in which case such consent must acknowledge the
non - Spouse Beneficiary. Such written election shall be witnessed by a Plan representative
designated by the Administrator or a notary public and shall acknowledge the effect of such election
on the Spouse.
1.31
"Spouse" means the person to whom the Participant is married as of the earlier of the date on
which the Participant's benefits commence or the date of the Participant's death. To the extent
'
provided in any qualified domestic relations order a Participant's former Spouse may be treated
as the surviving Spouse for purposes of this Plan.
'
1.33
"SIRS" means the California State Teachers Retirement System.
1.34
"Trust" means the Public Agency Retirement System (PARS) Trust.
'
1.35
"Trustee" means the trustee of the Trust.
'
1.36
"Valuation Date" means the last day of the Plan Year.
1.37
"Vast" means to have a nonforfeitable right to the Employer Contribution Account and/or the
Employee Contribution Account.
'
1.39
'Year of Service" means a period of twelve (12) consecutive months coinciding with the Plan
Year.
'
1.39
As used in this Plan, the masculine shall include feminine and the singular shall include the plural,
where applicable.
1 6
' ARTICLE II
' ELIGIBILITY REQUIREMENTS FOR PARTICIPATION
2.1 Eligibility requirements are determined as stated in the Adoption Agreement.
2.2 For purposes of determining Years of Service and Breaks in Service for purposes of eligibility,
the initial eligibility computation period is based on requirements stated in the Adoption
' Agreement which shall mean a period of twelve (12) months commencing on the date on which
the Employee first performs an Hour of Service. The second eligibility Computation Period
shall be the Plan Year which begins within the first eligibility Computation Period, and the third
and subsequent eligibility Computation Periods shall be subsequent Plan Years.
' 2.3 An Eligible Employee will become a Participant immediately upon being hired.
2.4 A Participant of this Plan shall cease to be a Participant for the purpose of accruing further
participation credits on the date on which he becomes eligible for another Retirement System, as
defined by IRS Section 3121(b)(7)(F) the date employment is terminated because of permanent and
total disability, the date on which death occurs, the date of his retirement, or the date of his
' termination for any other reason.
2.5 (a) In the event a Participant is no longer a member of the eligible class of Employees as
' provided for in Section 2.1 above and the Adoption Agreement, and becomes ineligible to
participate, such Employee will participate immediately upon returning to the eligible class
of Employees.
' (b) In the event an Employee who is not a member of the eligible class of Employees becomes a
member of the eligible class, such Employee will participate immediately if such Employee
has satisfied the requirements of Section 2.1 and the Adoption Agreement.
' 2.6 A Participant who is no longer eligible to participate because he is no longer in the class of
eligible employees, but who has not terminated employment with the Employer shall become an
' Inactive Participant and shall remain such for twenty-four (24) months after which his interest in
the Plan will be distributed to him.
1
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' ARTICLE III
' CONTRIBUTIONS
3.1 (a) For each month that an Employee remains a Participant under this Plan, the Employer is
' responsible for and shall make Employer Contributions to the Trust hereunder which shall be
credited to the Participant's Employer Contributions Account. The amount of the Employer
Contributions to be made for any particular month and with respect to any particular
' Participant shall be as stated in the Adoption Agreement.
(b) For each month that an Employee remains a Participant under this Plan, the Employee is respon-
sible for and shall make Employee Contributions to the Trust hereunder which shall be credited
t to the Participant's Employee Contributions Account. The amount, if any, of the Employee
Contributions to be made for any particular month and with respect to any particular Participant
shall be as stated in the Adoption Agreement. The employee contribution shall be subject to
' IRC Section 414 (h) "before tax" employer pickup, if provided for in the Adoption Agreement.
3.2 The Employer may make contributions to the Trust hereunder sufficient to defray the expenses
of administering this Plan, including any expense charges or fees of the Insurer under the group
' annuity contract. In the event of the failure of the Employer to pay such expenses, they shall be
charged against the Participants' Employer Contribution Accounts and Employee Contribution
Accounts as specified in the Adoption Agreement.
' 3.3 "Annual Additions' means for any Plan Year the sum of the following amounts credited to a
Participant's accounts in all qualified defined contribution plans maintained by the Employer:
' (a) Employer Contributions
(b) .Employee Contributions
(c) Forfeitures
Solely for the purposes of this paragraph, the Total Compensation for a totally disabled (within the
meaning of Section 22(e) of the Code) participant of a defined contribution plan maintained by the
Employer is the compensation which the participant would have received for the year if the participant
' had been paid at the rate of compensation paid immediately before becoming permanently and totally
disabled; provided such imputed compensation may be taken into account only if the member is not
an officer, an owner, or a highly compensated employee, and only if contributions to the defined
contribution plan are nonforfeitable when made. In addition, amounts allocated after March 31,
1984 to an individual medical account, as defined in Section 415(1x1) of the Code, which are part of
a defined benefit plan maintained by the Employer, and amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after such date, which are attributable to
' post - retirement medical benefits allocated to the separate account of a key employee, as defined in
Section 419A(d)(3) of the Code, under a welfare benefit fund, as defined in Section 419(e) of the
Code, maintained by an Employer, shall also be treated as Annual Additions.
3.4 Notwithstanding anything to the contrary contained in this Plan, the Annual Additions to a
Participant's account for any Plan Year shall not exceed the lesser of the Defraud Contribution
Dollar Limitation (currently $30,000) for the Plan Year or twenty-five percent (25 %) of the
' Participant's Total Compensation for the Plan Year. The percentage limitation of the preceding
sentence shall not apply to any contributions for medical benefits (within the meaning of Section
419A(f)(2) of the Code) after separation from service which is otherwise treated as an Annual
' Addition under Section 415(1)(1) of the Code.
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ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
Valuation of Accounts
4.1 For the purpose of funding this Plan, the Employer will provide the Trustee with written
direction on how to invest assets consistent with this Article IV. Alternatively, at the option
of the Employer, and with the written consent of the Trustee the Employer may delegate to the
Trustee the authority to determine how the assets of the Plan will be invested, consistent with
the terms of this Plan and accompanying Trust.
4.2 The Trustee may invest some or all of the contributions in an investment contract issued by an
insurance company licensed to do business in California with a rating of A+ or better awarded
by Standard and Poor's Corporation's Insurer Solvency Review, or in any fund whose principal
is guaranteed by the Federal Deposit insurance Corporation. Such investment to be made shall
be made at the direction of the Employer, or at the discretion of the Trustee if a valid delegation
of investment decision has been provided to the Trustee by the Employer pursuant to Section 4.1.
4.3 Any group investment contract shall provide for separate accounting of each Participant's Employer
Contribution Account and Employee Contribution Account.
4.4 The value of a Participant's Employer Contribution Account and Employee Contribution
Account shall be determined at least annually on a date herein referred to as a Valuation Date.
As of each Valuation Date the trustee shall determine the amount of interest adjustment credited
to the total of all assets held for Employer Contribution Accounts and Employee Contribution
Accounts during the period since the preceding Valuation Date. The total interest adjustment
shall be allocated among all of the active individual Participant and Inactive Participant accounts
within each such classification as of the current Valuation Date. Not less frequently than
annually, the Employer shall notify each Participant of the value of his Employer Contribution
Account and Employee Contribution Account. All account values will be listed at book value
unless the Participant requests a listing of the current fair market value of such Account.
4.5 Contributions to the Trust Fund in an amount, and for a period, which are reasonable in the
discretion of the Trustee, shall be deposited in an interest- bearing account, which may be an interest
bearing account of the Trustee.
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ARTICLE V
VESTING
5.1 (a) Each Participant shall be Vested in his Employer Contribution Account as provided in the
Adoption Agreement.
(b) Each Participant shall be one hundred percent (100%) Vested in his Employee Contribution
Account at all times.
5.2 Any Participant who terminates his employment with the Employer prior to his Normal
Retirement Date and who does not meet the requirements under Section 5.1(a) and the Adoption
Agreement above shall lose all rights to the balance of his Employer Contributions Account
accrued prior to such date.
' 5.3 No change to a Vesting Schedule contained in this Article V and the Adoption Agreement shall
deprive a Participant of his nonforfeitable right to his Employer Contributions Account prior to
the adoption of the change. If the Vesting Schedule of this Plan is amended, each Participant
with at least five (5) Years of Service with the Employer prior to the adoption of the change,
' may elect within a reasonable time after the adoption of the change to have his nonforfeitable
percentage computed under the Plan without regard to the change.
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ARTICLE VI
' DISTRIBUTIONS
6.1 A Participant who terminates his employment by reason of death, the attainment of Normal
' Retirement Date or Permanent and Total Disability shall be entitled to one hundred percent
(100%) of the sum of his Employer Contribution Account and his Employee Contribution
Account, valued as of the Valuation Date coincident with or next following the actual date of
' distribution. The sum to which such a Participant is entitled shall be distributed in accordance
with the further provisions of this Article.
6.2 In the event that the termination of a Participant is caused by his death, his Beneficiary shall be
' paid his entire benefit in the Plan in one lump sum.
6.3 If the sum to which the Participant is entitled is less than $3,500, it shall be distributed to the
t Participant as a single sum. If the sum to which a Participant is entitled is $3,500 or greater it
will also be distributed in the form of a lump sum, but such distribution may not be distributed
to the Participant prior to his Normal Retirement Date without his consent.
' 6.4 A Participant may continue in employment beyond his Normal Retirement Date to a deferred
retirement date which may be the first day of any month subsequent to his normal Retirement
Date. A Participant who terminates his service on or after his deferred retirement date shall be
' entitled to one hundred percent (100 %) of the sum of his Employer Contribution Account and his
Employee Contribution Account, revalued as of the Valuation Date coincident with or next
following the actual date of distribution. The Account shall be distributed in accordance with
' the further provisions of this Article.
6.5 The interest in the Plan of an Inactive Participant shall be distributed to him at the end of a
period of 24 (twenty four) months during which he has received no contributions to his accounts
' in this Plan.
6.6 An Employee who is a Participant in this Plan will have his entire interest in this Plan distributed in
' accordance with Section 401(a)(9) of the Code. A Participant's entire interest in this Plan will be:
(a) Distributed commencing not later than the required beginning date (in accordance with
' Internal Revenue Service regulations) and must be made over one of the following periods
(or a combination thereof):
(1) the life of the Participant,
' (2) the lives of the Participant and a designated Beneficiary,
(3) a period not extending beyond the life expectancy of the Participant, or
' (4) a period not extending beyond the life expectancy of the Participant and it designated
Beneficiary.
' (b) Distributed over a period specified in (a) (3) or (4) above, or over a period not extending
beyond the life expectancy of the designated Beneficiary.
(c) Except as provided below, the required beginning date for purposes of this Section shall be the
' April 1st of the calendar year following the later of:
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(1) the calendar year in which the Participant attains age 70 112 or,
(2) the calendar year in which the Participant retires.
(d) For purposes of this Article VI, life expectancy of the Participant and life expectancy of the
Participant and designated Beneficiary will be computed using the return multiples contained
in Section 1.72 -9 of the Income Tax Regulations. A Participant's life expectancy (and his
Spouse's life expectancy) may not be recalculated.
(e) Distribution of a Participant's interest in this Plan will be made in accordance with Section
401(a)(9) of the Code and the provisions of such Code section will supersede any provision in
this Plan which may be inconsistent with such Code section.
(i) If distribution is considered to have commenced in accordance with the Regulations before
the Participant's death, the remaining interest will be distributed at least as rapidly as muter
the method of distribution being used as of the date of the Participant's death.
6.7 Distributions made to a Participant's designated Beneficiary under this Plan shall be incidental to
the primary purpose of providing benefits to Participants and such distributions will be made in
accordance with Section 401(a)(9) of the Code.
6.8 Anything in this Plan to the contrary notwithstanding, the Participant shall not have the right to
elect to have all or part of his interest in this Plan, which would otherwise become available to
him during his lifetime, paid only to his Beneficiary after his death.
6.9 In no event shall the annuity commencement date of a Participant who becomes entitled to benefits
under this Plan be later than 60th day after the close of the Plan year in which the latest of the
following events occurs:
(a) The Participant reaches his Normal Retirement Date;
(b) The Participant qualifies for Permanent and Total Disability;
(c) The Participant terminates employment with the Employer;
Notwithstanding the above, a Participant may make written application to the Administrator for a
deferred annuity commencement date which may be the first day of any month subsequent to the
latest date specified in (a), (b), or (c) above but in no event will such date be later than the
required beginning date specified in this Article.
6.10 A Participant who becomes eligible for another retirement system as defined by IRC Section
3121(b)(7)(F) or Social Security provided by his employer but does not terminate employment
with the Employer shall become an Inactive Participant.
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ARTICLE VII
TERMINATION OF EMPLOYMENT
7.1 A Participant who terminates his employment by reason of death, the attainment of Normal
Retirement Date or Permanent and Total Disability shall be entitled to one hundred percent
(100%) of the sum of his Employer Contribution Account and his Employee Contribution
Account, valued as of the Valuation Date coincident with or next following the actual date of
distribution. The sum to which such a Participant is entitled shall be distributed in accordance
with the further provisions of this Article.
7.2 Upon the Participant's termination of employment with the Employer his Vested interest in this
Plan shall be determined in accordance with Article V of this Plan.
7.3 (a) If upon the Participant's termination of employment his Vested interest in this Plan is less
than $3,500, it shall be distributed immediately to the Participant as a single sum. If the sum
to which a Participant is entitled is $3,500 or greater it will also be distributed in the form of
a lump sum, but such distribution may not be distributed to the Participant prior to his
Normal Retirement Date without his consent.
(b) If upon the Participant's termination of employment his Vested interest in this Plan is $3,500
or more, a distribution it will be paid immediately unless the Participant requests that payment
made at his Normal Retirement Date.
7.4 If a Participant other than a part-time, seasonal or temporary employee terminates his
employment with the Employer and is not fully Vested in his Employer Contribution Account on
his date of termination, he shall forfeit that portion of his Employer Contribution Account in
which he was not vested as of the Valuation Date next following. Any amounts so forfeited shall
be applied to reduce future Employer Contributions made under this Plan.
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V114rtyeAKUnn
' DEATH BENEFITS
8.1 If a married Participant dies prior to receiving his interest in this Plan, his spouse shall become
' Beneficiary. If unmarried, his estate shall be the beneficiary unless otherwise evidenced by a
written instrument.
' 8.2 At any time, and from time to time, each Participant, retired Participant, disabled Participant or
terminated Participant shall have the right to designate the Beneficiary to receive the death
benefits to which he is entitled hereunder. The Beneficiary for a married Participant shall at all
times be the Spouse of the Participant and may not be changed to someone other than the Spouse
' unless Spousal Consent is provided. Each such designation for death benefits shall be evidenced
by a written instrument filed with the Administrator and signed by the Participant. If no such
designation is on file with the Administrator at the time of the death of the Participant, or if for
' any reason at the sole discretion of the Administrator such designation is defective, then the
Spouse of such Participant shall be conclusively deemed to be the Beneficiary designated to
receive such benefit.
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ARTICLE IX
ADMINISTRATION
9.1 The Employer is the Plan Administrator under this Plan within the meaning of the Employee
Retirement Security Act of 1974 (ERISA), as applicable to governmental plans and as amended
from time to time, and shall supervise and control the operation of this Plan in accordance with its
terms and may make rules and regulations for the administration of this Plan which are not
inconsistent with the terms and provisions hereof.
9.2 The Employer shall see that books of account are kept which shall show all receipts and
disbursements and a complete record of the operation of this Plan, including records of the
Accounts of individual Participants. The Administrator shall be responsible for the preparation,
submission, and/or publication of all reports, descriptions, and forms which may be required for
this Plan to conform to the applicable provisions of the Code.
9.3 In any case where the provisions of this Plan require the consent or approval of the Employer or
Administrator of an election or request made by an Employee, Participant, or Beneficiary, in
order to make such election or request effective, the Employer shall act on such election or
request as promptly as shall be reasonable in the circumstances. In any case where action by the
Insurer under the group annuity contract is necessary in order to make operative an effective
election or request made by an Employee, Participant or Beneficiary, it shall be the
responsibility of the Employer to transmit such election or request to the Insurer in writing and
as promptly as shall be reasonable in the circumstances. The Insurer shall not be obliged to take
action under the group annuity contract with respect to any particular election or request unless
the Insurer shall have received the election or request in such form and detail as shall be
reasonably required by the Insurer.
9.4 The Employer in interpreting any provision of this Plan or in making any judgment or
determination with respect to any person hereunder will apply uniform rules in a like manner to
all persons under similar circumstances.
9.5 If an application or a claim for benefits under this Plan has been filed with the Administrator by a
Participant or Beneficiary (claimant), the Administrator must decide within 90 days (an additional
90 days may be granted if proper notice is given to the claimant indicating the special circmn ='
stances requiring an extension prior to the termination of the initial 90 -day period) whether to pay
benefits. If the claimant•dces not receive any answer from the Administrator within 90 days or in
180 days (in special instances) the claim for benefits shall be considered to have been denied. The
Administrator shall provide the claimant with a written explanation for the denial of benefits in
language calculated to be understood by the Participant citing pertinent provisions of the Plan, an
explanation of the Plan's claim review procedure with appropriate forms for the claimant's use in
submitting his claim, and a description of any information necessary for the claimant to perfect the
claim.
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ARTICLE X
'
AMENDMENT AND DISCONTINUANCE OF THIS PLAN
10.1
While the Employer expects to continue this Plan indefinitely, it necessarily reserves the right to
amend this Plan at any time. No such amendment shall, however, deprive any Participant or
'
Beneficiary of any benefit previously vested in him under this Plan. Irrespective of any amendment,
no part of the assets held under this Plan shall ever revert to the Employer or be used for or diverted
to any purpose other than for the exclusive benefit of the Participants.
10.2
It is expressly understood, however, that the power of the Employer to amend this Plan is subject
to this Article, and that no amendment shall be made which would:
'
(a) deprive any Beneficiary of a then deceased Participant of the right to receive the benefits to
which the Beneficiary may be entitled hereunder,
'
(b) deprive any Participant of the benefits to which he is entitled hereunder,
(c) deprive any Participant of any of the proportionate interest in this Plan to which he would be
'
entitled were he to terminate employment on the date of such amendment,
(d) eliminate or reduce an early retirement benefit or retirement type subsidy (as defined in
'
regulations), or
(e) eliminate an optional form of benefit, except to the extent it may be required to qualify, or as
'
a condition of continued qualification of this Plan, under Section 401 of the Code.
10.3
This Plan shall be permanent and discontinued upon written notice to the Trustee by the Employer.
A complete discontinuance of contributions by the Employer shall be deemed a discontinuance of
'
this Plan.
10.4
If this Plan is terminated, partially terminated, or suspended, or if Employer Contributions to this
Plan are permanently discontinued, further contributions to this Plan shall thereupon cease and all
'
credits to the Account of Participants and former Participants who are affected by such termination,
partial termination, or suspension shall become one hundred percent (100%) vested. Any
'
forfeitures which shall have occurred in accordance with Article VII. Section 7.3 hereof prior to
reduce Employer Contributions hereunder shall be distributed pro -rats among the Accounts of
those Employees who were Participants on the effective date of the termination of this Plan.
10.5
In the event the Employer decides it is impossible or not advisable to continue to make its
'
contributions as herein provided, the Employer shall have the power to terminate this Plan through
appropriate resolutions.
'
10.6
This Plan may not be merged or consolidated with any other plan, nor may any assets or liabilities
of this Plan be transferred to any other plan unless each Participant in this Plan would (if such Plan
had then terminated) receive a benefit immediately after such merger, consolidation or transfer
'
which is equal to or greater than the benefit he would have been entitled to receive immediately
before such merger, consolidation or transfer (if this Plan had then terminated).
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ARTICLE XI
' MISCELLANEOUS
11.1 Inclusion in this plan shall not be construed as giving the Employee any right to be retained in the
' service of the Employer without its consent, nor shall it interfere with the right of the Employer to
discharge the Employee, nor shall it give the Employee any right, claim or interest in any
retirement benefits herein described except upon fulfillment of the provisions and requirements of
t this Plan.
11.2 (a) To the maximum extent permitted by law, the benefits or payments herein provided shall not
in any way be liable to attachment, garnishment or other process, or be seized, taken,
' appropriated or applied by any legal or equitable process, to pay any debt or liability of any
Participant. Except as otherwise permitted by law or an order, decree or judgment issued
pursuant to a Qualified Domestic Relations Order, benefits or payments under this Plan may
' not be assigned. In the event of any conflict between provisions of this Plan and the terms
of any description issued in conjunction with the Plan, the provisions of this Plan shall
control.
' (b) For purposes of this Plan a "Qualified Domestic Relations Order" means a domestic
relations order (as specified below) which creates or recognizes the existence of an alternate
payee's (any Spouse, former Spouse, child or other dependent of a Participant) right to, or
assigns to an alternate payee the right to, receive all or a portion of the benefits payable to a
Participant under this Plan. A domestic relations order means any judgment, decree or
order (including approval of a property settlement agreement) which relates to the provision
' of child support, alimony payments, or marital property rights to a Spouse, former Spouse,
child or other dependent of a Participant and is made pursuant to a state domestic relations
order. Such order (a) must clearly specify (1) the name and last (mown mailing address (if
any) of the Participant and the alternate payee covered by the order, (2) the amount or
' percentage of the Participant's Account to be paid by the Plan to each alternate payee, or the
manner in which such amount or percentage is to be determined, (3) the number of payments
or period to which such order applies, and (4) the name of each Plan to which such order
' applies, and (b) must not require (1) the plan to provide any type or form of benefits, or any
option, not otherwise provided under the Plan, or (2) provide increased benefits, and (3) the
payment of benefits to an alternate payee which are required to be paid to another alternate
' payee under another order previously Qualified Domestic Relations Order. The provisions
relating to the establishment of a Qualified Domestic Relations Order and the payment of
any benefits to an alternate payee shall be applied in the method and manner which is
consistent with Section 414(p) of the Code. / l�
' this y of o , 199 , at - L�' `errA.k
rgnature of Plan AdministraAtor /%
Title
1 17
Proposed Admendments — City of Newport Beach
Public Agency Retirement System
City of Newport Beach ( "City ") has adopted the Public
' Agency Retirement System ( "Plan") for the benefit of eligible employees, and
has reserved the right to amend the Plan. The Plan shall therefore be amended
' as specified below as of January 1, 1992 the effective date of the Plan.
Amendment # One
tSection 4.4 of the Plan shall be amended by adding the following:
' The assets of the Trust will be valued annually at fair market value as of the last day
of the Plan Year. On such date, the earnings and losses of the Trust will be allocated
' to each Participant's Accounts in the ratio that the value of each Account balance
bears to all account balances.
Amendment # Two
' Section 3.4 shall be amended by adding the following:
' Excess annual additions. If, as a result of the allocation of forfeitures, or a
reasonable error in estimating a Participant's annual compensation, the annual
' additions under the terms of a plan for a particular participant would cause the
limitations of Section 415 applicable to that participant for the limitation year
to be exceeded, the excess amounts shall not be deemed annual additions in
' that limitation year and shall be treated as follows:
' (i) The excess amounts in the participant's account shall be allocated and
reallocated to other participants in the plan. However, if the allocation or
reallocation of the excess amounts causes the limitations of Section 415 to be
' exceeded with respect to each plan participant for the limitation year, then
these amounts shall be held unallocated in a supense account. If a suspense
account is in existence at any time during a particular limitation year, other
' than the limitation year described in the preceding sentence, all amounts in
the suspense account shall be allocated and reallocated to Participants'
' accounts (subject to the limitations of Section 415) before any employer
contributions and employee contributions which would constitute annual
additions may be made to the plan for that limitation year.
1
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' Amendment # Three
Section 3.4 shall be amended by adding the following:
If, in addition to this Plan, the Participant is covered under another qualified
defined contribution plan maintained by the Employer, a welfare benefit fund, as
defined in Code Section 419(e) maintained by the Employer, or an individual
tmedical account, as defined in Code Section 415 (1) (2), maintained by the
Employer, that provides an Annual Addition during any Limitation Year, the
Annual Additions that may be credited to a Participant's accounts under this Plan
' for any Limitation Year will not exceed the maximum amount permitted under
Code Section 415 reduced by the Annual Additions credited to. the Participant's
' account under the other Plans and welfare benefit funds for the same - Limitation
Year.. If the Annual Additions with respect to the Participant under other
' defined contribution plans and welfare benefit funds maintained by the Employer
are less than the maximum amount permitted under Code Section 415 and the
Employer contributions that would otherwise be contributed or allocated to the
' Participant's accounts under this Plan would cause the Annual Additions for the
Limitation Year to exceed this limit, the amount contributed or allocated
under this Plan will be reduced so that the Annual Additions under all such plans
' and funds for the Limitation Year will equal less than the maximum amount
permitted under Code Section 415. If the Annual Additions with respect to the
' Participant under. such other defined contribution plans and welfare benefit funds
in the aggregate are equal to or greater than the maximum amount permitted
under Code Section 415, no amount will be contributed or allocated to the
' Participant's accounts under this Plan for the Limitation Year.
If the employer maintains, or at any time maintained, a qualified defined
' benefit plan covering any Participant in this Plan, the sum of the Participant's
Defined Benefit Fraction and Defined Contribution Fraction will -not exceed
1.0 for any..Limitation Year. For this purpose, the amount of the Annual
' Addition for any Limitation Year will be reduced to the extent necessary
so that the sum of the Defined Benefit Fraction and Defined Contribution
' Fraction do not exceed 1.0. For purposes of the above, the following
definitions will apply:
' Compensation: All of each Participants's compensation (as that term is defined
in Code §415(c)(3)). For any Self - Employed Individual covered under the Plan,
compensation will mean Earned Income. Compensation includes only that compensation
' which is actually paid to, or includible in the gross income of, the Participant
during the "applicable period ". For this Plan, except as specified to the contrary
elsewhere in this Plan document, the applicable period will be the Plan Year
unless applicable law mandates a different period, in which case the applicable
period will be such legally required period.
'
The annual compensation of each Participant taken into account under the Plan for
any year will not exceed $200,000, as adjusted by the Treasury Secretary at the
'
same time and in the same manner as under Code §415(d), except that the dollar
'
increase in effect on January 1 of any calendar year is effective for years beginning
'
in such calendar year. If the Plan determined compensation on a period of time that
'
contains fewer than 12 calendar months, then the annual compensation limit is an
amount equal to the annual compensation limit for the calendar year in which the
compensation period begins multiplied by the ratio obtained by dividing the
'
number of full months in the period by 12.
'
In determining the compensation of.a Participant for-purposes of this limit, .the
'
rules of Code §414(q)(6) will apply, except in applying these rules, "family"
will.include only the Participant's spouse and any lineal descendants of the
'
Participant who have not attained age 19 before the close of the year. If, as
a result of the application of.these rules, the adjusted $200,000 limit is exceeded,
'
then (except for determining the portion of compensation up to the integration
'
level if this Plan provides for permitted disparity), the limit will be prorated
among the affected. individual's compensatin determined under this section before
'
this limit is applied.
If compensation for any prior plan year is taken into account in determining the
employee's contributions or benefits for the current year, the compensation for such
'
year, is subject to the applicable annual compensation limit in effect for that
prior year.
'
Defined Benefit. Fraction:. A. fraction, the numerator of which is the sum of
the Participant's projected annual benefits under all. the defined benefit plans
'
(whether or not terminated) maintained by the Employer, and the
denominator. of which .is the lesser of 125% of the dollar limit determined
for the Limitation Year under Code §415(b) and (d) or 140% of the highest
'
average compensati on, including any adjustments under Code §415(b).
Notwithstanding the above, if the Participant was a Participant as of the first
day of the first Limitation Year beginning after December 31, 1986, in one
or more defined benefit plans maintained by the Employer that were in
existence on May 6, 1986, the denominator of this fraction will not be less
'
than 125 % of the sum of the annual benefits under such plans that the
Participant had accrued as of the close of the last Limitation Year beginning
before January , 1, 1987, disregarding any changes in the terms and
'
conditions of the plan after May 5, 1986. The preceding sentence applies
only if the defined benefit plans individually and in the aggregate satisfied
'
Code §415 for all Limitation Years beginning before January 1, 1987.
' Employer: For purposes of this Article, Employer will mean the Employer
that sponsors this Plan, and all members of a controlled group of
corporations (as defined in Code §414(b) as modified by §415(h), all
' commonly controlled trades or businesses (as defined in §414(c) as modified
by §415(h) or affiliated service groups (as defined in §415(m) of which the
' Employer is a part, and any otber entity required to be aggregated with the Employer
pursuant to regulations under §414(0).
4
'
Defined Contribution Dollar Limitation: $30,000 or if greater, one - fourth
of the defined benefit dollar limitation of Code §415(b)(1) as in effect for
1
the Limitation Year.
Defined Contribution Fraction: A fraction, the numerator of which is the
'
sum of the Annual Additions to the Participant's account under all the
defined contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years (including the
'
Annual Additions attributable to the Participant's nondeductible employee
contributions to all defined benefit plans,. whether or not terminated,
maintained by the Employer, and the Annual Additions attributable to all
'
welfare benefit funds, as defined in Code §419(e), and individual medical
accounts, as defined in Code §415(1)(2), maintained by the Employer), and
the denominator of which is the sum of the maximum aggregate amounts for
the current and all prior Limitation Years of service with the Employer
'
(regardless of whether a defined contribution. plan was maintained by the
Employer). The maximum aggregate amount in any Limitation Year is the
lesser of 125% of the dollar limitation determined under Code §415(b) and
'
(d) in effect under Code §415(c)(1)(A) or 35% of the Participant's
compensation for such year.
'
If the Employee was a Participant as of the end of the first day of the first
limitation Year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer that were in existence on
'
May 6, 1986, the numerator of this fraction will be adusted if the sum of
this fraction and the Defined Benefit Fraction would otherwise exceed 1.0
'
under the terms of this plan. Under the adjustment, an amount equal to the
product of (i) the excess of the sum of the-fractions over 1.0 times (ii) the
'
denominator of: this fraction, will be permanently subtracted from the
numerator of this fraction. The adjustment_ is calculated using the fractions
as they would be computed as of the end of the last Limitation Year
'
beginning before January 1, 1987, and disregarding any changes in the
terms and conditions of the Plan made after May 5, 1986, but using the §415
limitation applicable to the first Limitation Year beginning on or after
'
January 1, 1987.
' Employer: For purposes of this Article, Employer will mean the Employer
that sponsors this Plan, and all members of a controlled group of
corporations (as defined in Code §414(b) as modified by §415(h), all
' commonly controlled trades or businesses (as defined in §414(c) as modified
by §415(h) or affiliated service groups (as defined in §415(m) of which the
' Employer is a part, and any otber entity required to be aggregated with the Employer
pursuant to regulations under §414(0).
11
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1 Ammendment # Four
A new Section 3.5 will be added as follows:
1 If the Plan's vesting schedule is amended or the Plan is amended in any way that
directly or indirectly affects the computation of a Participant's nonforfeitable
1 percentage, or if the Plan is deemed amended by an automatic change to or from
a top -heavy vesting schedule, each Participant with at least three years of
service with the Employer may elect within a reasonable period after the
1 adoption of the amendment or change to have his nonforfeitable percentage
computed under the Plan without regard.to such amendment, or change.
1 Election period. The period during which.the election may be made will begin
with the date the amendment is adopted or deemed to be made and will end on
1 the latest of-
(i) 60 days after the amendment is adopted;
(ii). 60 days after -the amendment becomes effective; or
(iii). 60 days after the Participant is issued written notice
1 of the amendment by the Employer or Plan Administrator.
1 Ammendment # Five
1 Section 4.4 shall be amended to delete the following sentence:
1 Not less frequently than annually, the Employer shall notify each participant of
the value of his Employer Contribution Account and Employee Contribution Account.
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' Executed this / day of '76Ei 199L4 at
t! tat,-O
' Signature of Plan Administrator
' . pk& fr&I" a—
Title
Agency Name
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Amendments to the Public Agency Retirement System — City of Newport Beach
11.3 (a) This section applies to distributions made on or after January 1, 1993. Notwithstanding
any provision of the plan to the contrary that would otherwise limit a distributee's
election under this section, a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the distributee in a
direct rollover.
(b) Definitions
(i) Eligible Rollover Distribution: An eligible rollover distribution is any distribution of all
or any portion of the balance to the credit of the distributee, except that an eligible
rollover distribution does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually made for the
life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary, or for a specified period of
ten years or more; any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(ii) Eligible retirement plan: An eligible retirement plan is an individual retirement
account described in section 408(a) of the Code, an individual retirement annuity
described in section 408(b) of the Code, an annuity plan described in section 403(a) of
the Code , or a qualified trust described in section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However, in the case of an eligible rollover
distribution to a surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(iii) Distributee: A distributee includes an employee or former employee. In addition,
the employee's or former employee's surviving spouse and the employee's or former
employee's spouse or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in section 414(p) of the Code, are distributees with
regard to the interest of the spouse or former spouse.
(iv) Direct Rollover: A direct rollover is a payment by the plan to the eligible retirement
plan specified by the distributee.
this day of 198, at���""
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Title
RECEIVED J U L 2 1 1993
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P A R S
Public Agency Retirement System
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ADOPTION AGREEMENT
'
RECEIVED APR 1 7 1992
'
Version 8
January 23, 1992
Copyright c 1991 PHASE II SYSTEMS. All rights reserved. Reproduction in part or whole is prohibited.
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ADOPTION AGREEMENT TO
THE PUBLIC AGENCY RETIREMENT SYSTEM (PARS)
AND TRUST AGREEMENT
EMPLOYER City of Newport Beach
FEDERAL I.D. N 3956000751
ADMINISTRATOR Duane K. Munson
(Name)
Director of Personnel
ADDRESS Personnel
(Department)
3300 Newport Blvd. P.O. Box 1768
(Number Street)
Newport Beach, CA 92658 -8915
(City) (State and Zip Code)
NAME OF PLAN PUBLIC AGENCY RETIREMENT SYSTEM (PARSr
City of Newport Beach
(Agency Name)
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INTRODUCTION
' This Adoption Agreement, the provisions of the Public Agency Retirement System (PARS), and the
provisions of the PARS Trust of which this Agreement is a part, are hereby adopted by the Employer
executing this Agreement for the benefit of Eligible Employees and their Beneficiaries.
' This Adoption Agreement is part of the adoption of a new Plan, as provided in Section 2.5 of the PARS
Trust.
' This Adoption Agreement superceeds all earlier versions.
Item 1: EFFECTIVE DATE
' EFFECTIVE DATE shall mean January 1, 1992.
Item 2: ELIGIBLE EMPLOYEE
' A. ELIGIBLE EMPLOYEE shall mean only those Employees who, at any time during which the
Employer maintains this Plan, are not accruing a benefit under Social Security or another Retirement
' System provided and maintained by the Employer which meets the minimum requirements of IRS
Regulations of IRC Section 3121 (b)(7)(f).
B. ELIGIBLE EMPLOYEE shall include all active employees until termination of employment and
inactive employees until their interest in the Plan is distributed.
C. ELIGIBLE EMPLOYEE shall exclude all employees exempted under IRC Section 3121 (b)(7)(f).
' D. ELIGIBLE EMPLOYEE shall include the following:
' Item 3: ELIGIBILITY REQUIREMENTS
' A. SERVICE REQUIREMENT: An Employee who qualifies as an ELIGIBLE EMPLOYEE under
Item 2 above shall be eligible to participate immediately.
B. EMPLOYMENT REQUIREMENT: An Employee who terminates employment during the Plan
Year shall still be eligible to participate during such Plan Year.
Item 4: COMPENSATION
' A. COMPENSATION shall mean all compensation for the Plan Year paid or payable in cash by the
Employer for personal services by the Eligible Employee. This definition of COMPENSATION shall
be subject to the provisions of Article 1.0.5 of the Plan as well as the further provisions of this Item.
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B. If elected in this Item, the term COMPENSATION shall be defined as follows:
W -2 Wages
Base Salary
CALIF. PERS Compensation
CALIF. STRS Compensation
Other
Item 5: NORMAL RETIREMENT AGE
[]YES
NO
[]YES
NO
(]YES
NO
[]YES
NO
[ ] YES
[ ] NO (define below)
NORMAL RETIREMENT AGE shall mean sixty (60) years of age.
'
Item 6:
NORMAL RETIREMENT DATE
NORMAL RETIREMENT DATE shall mean the first of the month coincident with or next following
'
the date on which the Participant attains NORMAL RETIREMENT AGE.
Item 7:
DEATH AND TOTAL DISABILITY PROVISION
A Participant's Vesting and distribution rights on the date of his death or 'Permanent and Total
'
Disability' will be the same as the Vesting and distribution rights applicable on the date of his
attainment of Normal Retirement Age.
'
Item 9:
ALLOCATION AND AMOUNT OF CONTRIBUTIONS
A. The Employer shall make Employer Contributions in the amount of 3.75% of each Participant's
Compensation. Employer Contributions shall be forwarded to the Trustee to be allocated to each
Participant's Employer Contribution Account.
B. Each Participant shall make Employee Contributions in the amount of 3.75 % of his Compensation.
Employee Contributions shall be forwarded to the Trustee to be allocated to the Participant's Employee
'
Contribution Account. Employee contributions will be "before tax' due to the employer's adoption of
IRC Section 414(h) "employer pickup" in the Plan Document.
Item 9:
INVESTMENT OF CONTRIBUTIONS
A. Pursuant to Section 4.1(a) of the Trust, the funding policy and method of this plan shall be as
follows:
Yes _7. No _ All Contributions will be deposited in the Imperial Bank Money Market
Fund and wire- transferred each month to the Hartford's Group immediate Participation
'
Guarantee (IM) insured investment contract.
Yes _ No _ All Contributions will be deposited in the Imperial Bank Money Market
'
Fund guaranteed by the Federal Deposit Insurance Corporation.
B. Yes _ No _ Pursuant to Section 4.1(a)(2) of the Trust, the Plan Administrator hereby names
'
the Trustee as the Fiduciary for all contributions to be deposited in the Imperial Bank Money Market
Fund and wire - transferred each month to the Hartford's Group Immediate Participation Guarantee (MG)
'
insured investment contract.
C. A Participant shall not be permitted to direct the investment of his Employer Contribution Account
'
or his Employee Contribution Account.
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Item 10: ALLOCATON OF EXPENSES:
' Yes_X_ No_ All Plan expenses shall be paid out of Plan assets, and shall be allocated as follows:
50% to the Employer Contribution Accounts, and 50% to the Employee Contribution Accounts.
' Yes_ No_X_ All Plan expenses shall be paid in addition to designated Employer and Employee
contributions, and the PARS Trust Administrator shall bill the Employer monthly for Plan expenses.
Item 11: VALUATION DATE
' VALUATION DATE shall mean the date as of which a valuation is completed. Valuations are done at
least monthly and more frequently, at the discretion of the Trustee.
' Item 12: METHOD OF FUNDING
The Plan shall be fmded as provided under Section 4.1 of the PARS Plan Document.
Item 13: VESTING
' A. The Participant's Employee Contribution Account shall be 100% Vested at all times. The
Participant's Employer Contribution Account shall be 100% Vested at Normal Retirement Age, Total
Disability or Death. However, notwithstanding anything to the contrary in this Plan, the Participant
' shall be Vested in his Employer Contribution Account to such a degree and at such a time as to meet the
minimum requirements for a retirement system under Section 3121(b)(7)(F) of the Code.
B. Yes--No-NA-Years of Service with the Employer completed before the Employer maintained this
Plan shall be counted to determine the mnforfeitable percentage in such Employee's benefit from
Employer Contributions.
' C. Yes_Vo_NA_Years of Service completed prior to termination of employment shall not be credited
to an Employee who terminates employment before satisfying the eligibility requirements in Item 3 of
the Adoption AgreemenL
' D. For Vesting purposes, a Participant will be credited with a Year of Participation or Service only if
he or she completes at least one Hour of Service during the computation period.
' Item 14: PLAN YEAR
t The PLAN YEAR shall be the period of twelve (12) consecutive months commencing on
January 1 and ending on December 31.
Item 15: MISCELLANEOUS
' This Adoption Agreement shall be used only in conjunction with the Public Agency Retirement System
(PARS) and the PARS Trust.
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Executed this Z'/
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' Amendment Number 1 to the PARS Alternate Retirement System (ARS)
Adoption Agreement
' Rem 8: INVESTMENT OF CONTRIBUTIONS
Investment of Trust assets shall be governed by the following as indicated by the initials
of the Administrator. P
' (a) Yes V'-<o s Pursuant to Section 4.1(a)(2) of the Trust, the Administrator
hereby appoints the Trustee as the fiduciary with respect to the authority and duty
to direct the investment a n management of all Trust assets.
' (b)Yes No Pursuant to Section 4.1(a)(2) of the Trust, and subject
to the acce ptance of the Trustee, the Administrator hereby appoints
as fiduciary with respect to the authority and duty to direct the investment and
' management of all Trust assets. The following statement of investment policy
shall govern the investment of Trust assets, subject to the acceptance of such
assets by the Trustee:
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Employer.
' Plan Administral
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Title:
Signature:
'
Date:
(c)Yes,.—No ✓ ursuant to Section 4.1(a)(2) of the Trust, the
Administrator shall remain the fiduciary with respect to the authority and
duty to direct the investment and management of all Trust assets. The
following statement of investment policy shall govern the investment of
Trust assets, subject to the acceptance of such assets by the Trustee:
' RJUSERS"EMAMCAINVE3 AAM
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June 14, 1996
'
Gail Olson
Human Resources Manager
City of Newport Beach
'
3300 Newport Blvd.
Newport Beach, CA 92659 -1768
S Y S T E M S
' Subject: PARS Alternate Retirement System (ARS) retirement plan for Part -time,
Seasonal, and Temporary Faculty Employees dated January 1, 1992
' Dear Ms. Olson:
' We are pleased to have the opportunity to serve as your consultants. We are committed
to providing efficient and responsive services to our client agencies in a professional relationship
based on mutual trust, confidentiality, and prompt and candid communication. In that spirit, this letter
sets forth our agreement with you regarding the services we will provide and our billing practices
under this engagement.
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We will provide the services necessary for the installation and administration of the subject plan.
Installation
' In the installation phase, the necessary services include:
1. Meeting with appropriate City personnel to discuss plan provisions, implementation timelines,
benefit communication strategies and data reporting and contribution requirements;
' 2. Providing the necessary analysis and advisory services to finalize these elements of the plan;
' 3. Providing for review by City legal counsel the documentation needed to establish the plan;
and
' 4. Upon your authorization, preparing and submitting application to the Internal Revenue Service for
a determination that the plan is qualified (the application fee for which shall be paid by the City).
' Administration
In the administration phase, the necessary services include:
' 1. Monitoring the receipt by the trustee of plan contributions remitted by the City;
' 350 East Seventeenth Street • Suite 212 • Costa Mesa, California 92627
(714) 631 -6369 • FAX (714) 631 - 2063.1- 800 - 540 -6369 (outside 714 Area Code)
' Gail Olson
' City of Newport Beach
June 14, 1996
Page 2 of 4
2. Coordinating distribution payments to participants (which shall be made by the trustee at
the direction of the City), including the provision of required tax filings in regard to these
' payments, and acting as on -going liaison (via toll -free telephone) between the participant
and the City in regard to these distribution payments;
' 3. Performing periodic accounting of contributions, distributions, expenses and investment
earnings;
4. Preparing and. submitting periodic reports of non - contributing participants to the City;
5. Preparing and submitting an annual report to the City;
' 6. Preparing and submitting the annual report to the State Controller's Office including the required
certified trust -wide audit; and
' 7. Advising the City of on -going compliance and qualification requirements.
Phase II Systems is not licensed to provide and does not offer tax, accounting, legal or actuarial advice.
' In providing the services specified above, we will retain qualified professional service providers at our
cost as we deem necessary if the service lies outside our area of expertise.
t Fees
Our fees for the services specified above will be as follows:
' 1. Setup Fee (one -time) $750.00
2. _Consulting Fee 2% of contributions
' 3. Monthly Base Charge $50.00
4.
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5. Termination Fee (per terminated participant) $12.00'
' For total account balances of less than $50.00, the fee shall be the lesser of $12.00 or total
account balance minus the employee contribution account.
For purposes of this agreement, a participant of the subject plan shall not be considered a "Contributing
Participant" for a given month unless contributions have been credited to his or her account at some time
within the twelve -month period ending with that month.
Gail Olson
' City of Newport Beach
June 14, 1996
Page. 3 of 4
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With the exception of the Termination Fee, the total amount of fees due in a given month shall be allocated
' proportionally among active participants of the City's plan in that month, based on account balance. The
Termination Fee shall not be allocated among participants but shall be deducted solely from the terminating
participant's account.
' Fees shall be billed to the trustee as contributions are made by the City to the plan, and it shall be the
responsibility of the trustee to pay those fees from the assets of the plan.
' The fees specified above represent all customary and usual expenses relating to the operation of the
' subject plan, with the exception of fees charged by the trustee and the Investment Manager.
Trustee fees are currently 0.12% of contributions and are guaranteed through June 30, 1997.
' In the Event of Suspension of Contributions
' Our fees are determined on the understanding that the City will make continuous contributions to the plan
on a regular basis no less frequently than annually. In the event annual contributions are suspended,
' either temporarily or permanently, prior to the complete discharge of all obligations to provide payments
to participants in the subject plan, we reserve the right to bill the trustee for our services at the rates
indicated in our standard fee schedule in effect at the time the services are provided. It shall be the
' responsibility of the trustee to pay such billings from the assets of the plan. Before any such services
are performed, we will provide the City with written notice of the services to be rendered and an
estimate of the fees we will charge.
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Fees for Services Beyond Scope
Charges for services beyond those specified in this letter will be billed to the trustee at the rates
indicated in our standard fee schedule in effect at the time the services are provided. It shall be the
' responsibility of the trustee to pay such billings from the assets of the plan. Before any such services
are performed, we will provide the City with written notice of the services to be rendered and an
estimate of the fees we will charge.
' Information Furnished to Phase II S tys ems
' It shall be the responsibility of the City to certify the accuracy and completeness of the periodic information
required by us in the course of providing our services under this agreement, and Phase 11 Systems shall
rely on such information without further audit.
' It shall further be the responsibility of the City to deliver the required periodic information to us in such a
' manner that we have a reasonable amount of time to perform the services provided for in this agreement.
' Gail Olson
City of Newport Beach
June 14, 1996
' Page 4 of 4
' In the event that the City fails to provide the required periodic information in a complete, accurate and
timely manner, we reserve the right, notwithstanding the further provisions of this agreement, to
terminate this agreement upon written notice of thirty (30) days.
Confidentiality
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Because of the proprietary nature of the services provided, it is our policy that the City and its employees
and representatives not disclose any information relating to the subject plan to individuals who are not
employed by the City without the prior written consent of Phase II Systems.. This restriction is made a
part of this agreement.
A 137=
This agreement shall remain in effect for a one -year period beginning July 1, 1996 and ending June 30,
1997. This agreement will continue unchanged for successive twelve month periods beginning on July 1,
1997 unless either party gives written notice to the other party of the intent to terminate prior to April 1 of
the year in which the agreement is to terminate.
Our billing practices reflect our commitment to deal fairly with our client agencies in this as in all other
aspects of our relationship. We are pleased to be retained as your consultants, and we look forward
to providing our services to you on a basis that is mutually satisfactory.
Sincerely yours,
xww"""4�-
Kent Hammeras, CEBS
President, Phase II Systems
PARS Trust Administrator
F419ERTLM ARSXLW WMI EWVORl4NN0UNCE.W
' Agency:
' Address:
Plan:
PARS Request for Distribution
Authorization Form
City of Newport Beach
P.O. Box 1768
Newport Beach, CA 92658 -8915
PARS Alternate Retirement System (ARS)
Plan Administrator: Ms. Gail Olson
By the authority vested in me as plan administrator, I authorize the following personnel from
the City of Newport Beach to sign the "Request for Distribution° forms:
Name: tx��
Title: &&t
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Name: ek&4tz
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PLAN AbMINISTRATOR SIGNATURE
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TITLE
F: W Oy`Aen�M�inMe�U}15T.00CT
llIk /lti UVA �&'
(Signature)
Wan,�LL/./
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�EC��v ED
pPR 1 �} 1999
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'PUBLIC A .N .Y RETIREMENT SYSUZ AR ) INVESTMENT INFORMATION
Your employer's PARS plan is under the trusteeship of Union Bank of California (UBOC). In addition to serving as
the corporate trustee for your employer "s PARS plan, UBOC has also been designated by your employer to assume
' the fiduciary responsibility for making investment decisions. UBOC invests and manages the assets of your
employer's PARS plan through its investment management division, MERUS -UCA Capital Management ( MERUS).
' PARS plan contributions are primarily invested in a fixed income pool actively managed by MERUS and designed
to maximize income consistent with a very low level of price volatility using two components: 1) a laddered U.S.
Treasury portfolio with maturities going out as far as 5 years, but averaging between 1 -3 years, and 2) an internal
portfolio of $65 million invested in Guaranteed Investment Contracts (GIC) rated'A' or better with an average
maturity not to exceed 3.5 years. The pool has assets allocated between the two components based upon market
conditions, with the GIC portfolio component not anticipated to exceed a 25% allocation. The U.S. Treasury
securities in this portfolio are backed by the full faith and credit of the United States Government. The PARS plan
t assets invested by MERUS posted an annual return of 9.82% for 1995. This annual return figure represents actual
returns as reported by MERUS for 1995, and is not intended to indicate guarantee of future investment results.
Some PARS plans aLw.utitize:a group annuity contract with The Hartford Life Insurance Company (fhe Hartford).
These group annuity contracts are credited with actual earnings on the underlying investments (principally
government bonds and corporate securities), but contain an annual interest rate guarantee. In 1995, the annual
interest rate guarantees for the portion of PARS plan assets invested in The Hartford group annuity contracts ranged
' from 5.75% to 7.25 %, depending on individual agency plan contract with The Hartford.
In order to accommodate daily plan contributions from all the plans in PARS, a short -term investment depository
account is utilized. Within 24 hours of deposit into this account, PARS plan contributions are invested in the
' HighMark 1001/o U.S. Treasury Obligations Money Market Fund (HighMark). On a monthly basis, these depository
account assets are transferred over to the management of MERUS for further investment as described above. The
100% U.S. Treasury Obligations Money Market Fund returned 4.69% in 1995 for the portion of PARS plan assets
' invested in that fund. This annual return figure represents actual returns as reported by The HighMark Mutual Fund
Group for 1995, and is not intended to indicate guarantee of future investment results.
' The actual PARS investment return figures will vary by agency plan based upon the proportions of assets within the
various investments described above, and the timing throughout the plan year of those investment fund inflows and
outflows. 'Investment gains or losses are determined by the combination of interest, dividends and market value
' change of the underlying investments. The annual return figures listed on this page represent actual returns as
reported by MERUS and The HighMark Mutual Fund Group, and are not intended to indicate guarantee of future
investment results.
' This information was prepared by Phase II Systems and has been approved for release by the Plan Administrator of
your employer's plan. Generally,.Phase II Systems is authorized to release information regarding the plan only to
the Plan Administrator (the individual at the agency assigned by resolution of the agency's governing board to
administer the plan in accordance with the plan's legal documents). Items approved for release upon request to plan
participants include the Summary Plan Description and individual account information upon verification of
identification. Phase II Systems is not authorized to release estimates, projections, representations or interpretations
' of plan activity, on an individual or plan basis. Phase Ii Systems furthermore is not licensed to provide and does not
offer financial, tax, accounting, legal or actuarial advice.
If you have further questions regarding this plan, please send your request in writing to Phase II Systems to the
' address listed at the bottom of the page. Responses to your request must be approved by the Plan Administrator of
your plan prior to release.
t.AUI [ZE THE USE OF THIS DOCUMENT FOR PLAN PARTICIPANT INQUIRY
LQilt2l
2 PL N ADMINISTRATOR SIGNATURE DATE TITLE
by Puree lr 9n wtrV24% CITY OF NEWPORT BEACH
RECEIVED AUG 0 7 40000
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