HomeMy WebLinkAbout05 - Deferred Compensation PlanCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 5
October 25, 2005
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Human Resources Department
Barbara Ramsey, Human Resources Director, (949)644 -3303
b ramsev(&city. newport- beach. ca. us
Administrative Services Department
Dennis Danner, Administrative Services Director, (949)644 -3123
dd annerCa2city. newport- beach. ca. us
SUBJECT: DEFERRED COMPENSATION PLAN ADOPTION
RECOMMENDATION:
That the City Council approve the attached Deferred Compensation Plan Document and
Adoption Agreement. This Plan Document supersedes all previous plan documents.
DISCUSSION:
The City of Newport Beach has offered a deferred compensation plan to its employees
since 1978. This plan, under Internal Revenue Code Section 457, allows employees to
defer compensation, pretax, into a fund for use upon retirement. It is similar in concept
to a private sector 401K plan, although with very different rules for deferral and
distribution. Our plan has been administered by Great -West Life and Annuity Company
since 1990.
Our current plan document was approved by the City Council in 1997. Since that time
the IRS has issued final regulations that provide guidance for complying with changes
made to Section 457 by the Economic Growth and Tax Relief Reconciliation Act of
2001, the Tax Reform Act of 1997, and the Small Business Jobs Protection Act of 1996.
The final regulations also provide guidance on many provisions of eligible 457 plans
sponsored by governmental entities, such as the tax treatment of excess deferrals, plan
loans, plan terminations and unforeseeable emergencies.
Deferred Compensation
October 18, 2005
Page 2
The City has been complying with the new regulations since they were effective January
1, 2002. The Internal Revenue Service (IRS), however, has given employers until
December 31, 2005 to amend their plan documents to comply with the new regulations.
The major change to our adoption agreement is that it will allow participants to borrow
against their funds and repay the loan on a tax -free basis.
The various required changes to our Plan Document are listed below:
1. Under the definition of compensation, it allows sick, vacation, and other leave
pay to be deferred into the plan so long as the participant is employed when
the deferral election is made and the amounts are paid within 2Y� months
following severance of employment (if certain other restrictions are met) —
section 1.07.
Special catch -up rule for qualified police or firefighters — section 1.13.
2. First day of the month rule — section 2.03(a) for new deferrals, section 2.06 for
changes to deferral elections and section 2.10 for reenrollment.
3. Increased Elective Deferrals- section 3.01.
4. Age 50 Catch -up — section 3.02.
5. Increased 457 Catch -up — section 3.03.
6. Elimination of coordination with 401(k) and 403(b) contributions — section 3.04.
7. Participants covered by more than one plan — section 3.05 (a).
8. Excess deferrals — section 3.06.
9. USERRA provision is clarified to indicate that active duty represents a
severance of employment until re- employed upon return — section 3.07.
10. New required minimum distribution rules in Article V. Employers must force
out required minimum distributions as of the participants required beginning
date without participant consent — section 5.02 (b).
11. Flexible distributions and the elimination of irrevocable elections - section
5.03.
12. Unforeseeable Emergencies — section 5.05.
Deferred Compensation
October 18, 2005
Page 3
13. In- service transfers to purchase service credits in a governmental DB plan -
section 6.04.
14. Plan termination —section 11.01.
15. Other changes as required to satisfy EGTRRA have also been incorporated
into the plan document.
All of these changes require the City to adopt a new Plan Document and Adoption
Agreement for the administration of the City of Newport Beach Deferred
Compensation Plan. The new Plan Document contains new and revised sections
listed above and the Adoption Agreement is the vehicle for activating certain
provisions.
The Deferred Compensation Committee and the City Attorney's Office have reviewed
and approved these documents.
Prepared & Submitted by:
2Q !
Barbara Ramsey ('
Human Resources Director \v,
Dennis Danner
Administrative Services Director
ADOPTION AGREEMENT
,,
SECTION 457(b)
ELIGIBLE DEFERRED COMPENSATION PLAN
FOR GOVERNMENTAL EMPLOYERS
Adopted By: City of Newport beach
Employer
.Deferred Compensation Plan
Name of Plan
10/25/2005
Effective Date
4
SECTION 457(b) ELIGIBLE DEFERRED COMPENSATION PLAN
FOR GOVERNMENTAL EMPLOYERS
The Employer named below hereby establishes (or, as applicable, amends and restates) a
Deferred Compensation Plan for eligible Employees as provided in this Adoption Agreement and
the accompanying Great -West Retirement Services section 457(b) Eligible Deferred
Compensation Plan Document dated May 2005.
A. EMPLOYER INFORMATION.
1. EMPLOYER'S NAME AND ADDRESS:
City of riewport Beach
3300 Newport Blvd.
Beach, CA
2. TELEPHONE NUMBER: (949) 644 -3123
3. TAX ID NUMBER: 95- 6000751
4. NAME OF PLAN: City of Newport Beach Deferred Compensation Plan
5. NAME OF PLAN ADMINISTRATOR (the Employer unless another person(s) is appointed as set
forth in section 9.01 of the Plan):
C. Danner
B. EFFECTIVE DATE. (Check box 1 OR box 2 and fill in the blank(s))
1. p(] This is a new Plan having an effective date of l0/25/2005
2. [ j This is an amended and restated Plan.
The effective date of the original Plan was
Except as otherwise noted in this Adoption Agreement, the effective date of the amended and
restated Plan is
05 -05 Model 457(b) Adoption Agreement 2
for Governmental Employers
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C. CUSTODY OF ASSETS. (Check each box that applies.)
Internal Revenue Code ( "Code ") §457(g) shall be satisfied by setting aside Plan assets for the
exclusive benefit of Participants and Beneficiaries, as follows:
1. [ ] in a Trust pursuant to the provisions of Article VII of the Plan. The Employer, or certain
employees (or holders of certain positions with Employer) as named in this Adoption Agreement
shall be the Trustee.
2. [ ] in a Trust pursuant to a separate written trust agreement entered into between the Employer
and the bank or trust company named in this Adoption Agreement.
3. W in one or more annuity contracts meeting the requirements of Code §401(f).
4. [ ] in a custodial account meeting the requirements of Code §401(f), pursuant to a separate
written agreement with the Custodian named in this Adoption Agreement.
D. ELIGIBLE EMPLOYEES. (Check each box that applies.)
"Emplovee" shall mean:
1. X any full -time employee
2. Jk] any permanent part-time employee
3. �. ; any seasonal, temporary or similar part-time employee
4. any elected or appointed official
5. [ ] any independent contractor
6. K other employees: Concurrent with PERS membership
who performs services for and receives any type of compensation from the Employer (or any agency,
department, subdivision or instrumentality of the Employer) for whom services are rendered. If Box DA is
not checked, elected or appointed officials will not be treated as Employees and will not be eligible to
participate in the Plan, without regard to whether they are treated as common -law employees or
independent contractors for other purposes.
The following are the additional requirements or limitations, if any, for one or more of the specified class(es)
of employees to be eligible to participate in the Plan:
05 -05 Model 457(b) Adoption Agreement
for Governmental Employers
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E. PARTICIPANT LOANS. Effective date if later than January 1, 2002: 10/25/2005.
(Check Box I OR Box 2.)
1. The Administrator MAY direct the Trustee to make Participant loans in accordance with
Article IV of the Plan.
2. [ ] The Administrator MAY NOT direct the Trustee to make Participant loans in accordance
with Article IV of the Plan.
F. DISTRIBUTION OF SMALL ACCOUNT BALANCES effective March 28, 2005.
(Check Box 1, 2 or 3)
1. [ ] The Administrator SHALL direct the Trustee to distribute account balances of $1,000 or
less meeting the requirements of section 5.03(b) without Participant consent.
2. [ ] The Administrator SHALL direct the Trustee to distribute account balances in excess of
$1,000 but not exceeding $5,000 meeting the requirements of section 5..03 without Participant
consent.
3. K The Administrator SHALL NOT direct the Trustee distribute any account balances without
Participant consent.
G. IN- SERVICE DE MINIMIS DISTRIBUTIONS effective March 28, 2005.
(Check Box 1, 2 or 3)
1. [ ] The Administrator SHALL direct the Trustee to distribute account balances of $1,000 or
less meeting the requirements of section 5.04(b) without Participant consent.
2. [ ] The Administrator SHALL direct the Trustee to distribute account balances in excess of
$1,000 but not exceeding $5,000 meeting the requirements of section 5.04(b) without Participant
consent.
3. The Administrator SHALL NOT direct the Trustee to distribute any account balances
without Participant consent.
H. ROLLOVERS. Effective date if later than January 1, 2002:10/25/2005
(Check each box that applies)
X] Rollovers from eligible Code §457(b) plans SHALL BE allowed pursuant to section 6.01.
X Rollovers from plans qualified under Code § §40l(a), 401(k), 403(a) and 403(b) SHALL
BE allowed pursuant to section 6.01.
Rollovers from Individual Retirement Accounts and Annuities described in Code § §408(a)
an (b) SHALL BE allowed pursuant to section 6.01.
05 -05 Model 457(b) Adoption Agreement 4
for Governmental Employers
I. QUALIFIED DOMESTIC RELATIONS ORDERS. Effective date if later than January 1,
2002: 10/25/2005 (Check Box I OR Box 2.)
I. The Plan SHALL accept qualified domestic relations orders as provided in section 13.02 of
the 'Plan.
2. [ ] The Plan SHALL NOT accept qualified domestic relations orders as provided in section
13.02 of the Plan.
J. FICA REPLACEMENT ( "3121 ") PLAN.
Check each box that applies if this Plan is a retirement system providing FICA replacement retirement
benefits pursuant to regulations under Code §3121(b)(7)(F).
Eligible Employees (check each box that applies):
a. [ ] full -time employees and/or
b. [ ] part -time employees, and complete the following.
2. Contributions (check each box that applies):
a. [ ] The Employer shall make an annual contribution to each Participant's account
equal to percent of such Participant's Compensation.
b. [ ] Each Participant is required to make an annual contribution of _ percent of
Compensation.
(Note: The total percentage of a and b must equal at least 75%.)
In the event that this Plan is a retirement system providing FICA replacement retirement benefits as
described above, all references to In•Service De Minimis Distributions and Unforeseeable Emergency
distributions in the Plan Document shall be null and void.
This Adoption Agreement and the Plan Document attached hereto are duly executed on behalf of the
Employer.
EMPLOYER'S AUTHORIZED SIGNORS:
By: Dennis Danner By: Barbara
Title: Administrative Svcs Director Title: Human Resources Director
Date: 10/25/2005 Date: 10/25/2005
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[o]
TRUSTEE
A. Effective 10/25/2005 , the following is hereby appointed as Trustee for and accepts
the Trust created by the Employer's §457(6) Deferred Compensation Plan:
1. Complete this section only if box C. 1. was checked.
(xJ The Employer or
[ ] The following named employees:
2. Complete this section only if box C. 2, was checked.
[ ] The following named bank or trust company:
B. NAME(S) OF EMPLOYEE(S) AUTHORIZED TO ISSUE INSTRUCTIONS TO TRUSTEE:
This Trustee appointment is duly signed on behalf of the Employer and the Trustee.
EMPLOYER
[Signature]
Administrative Svcs Director
[Title]
[Date]
TRUSTEE
[Signature]
[Title]
[Date]
05 -05 Model 457(b) Adoption Agreement
for Governmental Employers
TRUSTEE
[Signature]
[Title]
[Date]
TRUSTEE
[Signature]
[Title]
[Date]
7
N
SECTION 457(b) ELIGIBLE DEFERRED COMPENSATION PLAN
FOR GOVERNMENTAL EMPLOYERS
Adopted By: City of Newport Beach
Employer
Deferred Compensation Plan
Name of Plan
10/25./2005
Effective Date
2005 Model 457(b) Plan Document for Governmental Employers
1-6
TABLE OF CONTENTS
SECTION 457(b) ELIGIBLE DEFERRED COMPENSATION PLAN
Page
Introduction. ........................................................................................................................................... i
SECTION 457(b) ELIGIBLE DEFERRED COMPENSATION PLAN
INTRODUCTION................................................................................................... ..............................1
I.
DEFINITIONS ............................................................................................ ..............................1
1.01
"Account Balance" ...................................................................................... ..............................1
1.02
" Administrator" .......................................................................................... ..............................1
1.03
"Alternate Payee" ....................................................................................... ..............................1
1.04
"Annual Deferral" ....................................................................................... ..............................1
1.05
" Beneficiary ................................................................................................ ..............................1
1.06
" Code" ........................................................................................................ ..............................1
1.07
"Compensation" ......................................................................................... ............................... 2
1.08
" Custodian" ................................................................................................. ..............................2
1.09
" Employee" ................................................................................................ ..............................2
1.10
" Empl oyer" ................................................................................................. ..............................2
1.11
"Includible Compensation" ......................................................................... ..............................2
1.12
"Nonelective Employer Contribution" ....................................................... ............................... 2
1.13
"Normal Retirement Age" ......................................................................... ............................... 2
1.14
" Participant" .............................................................................................. ............................... 3
1.15
"Participation Agreement" ......................................................................... ............................... 3
1.16
" Pl an" ......................................................................................................... ..............................3
1.17
"Plan Year" ................................................................................................ ..............................3
1.18
"Severance from Empl oyment" .................................................................. ............................... 3
1.19
"Trust or Custodial Agreement" ................................................................ ............................... 3
1.20
"Trust Fund" .............................................................................................. ............................... 3
1.21
" Trustee" ..................................................................................................... ..............................4
1.22
"Valuation Date" ......................................................................................... ..............................4
II.
PARTICIPATION AND CONTRIBUTIONS ............................................ ............................... 4
2.01
El igibil ity ................................................................................................... ..............................4
2.02
Election Required for Participation ........................................................... ..............................4
2.03
Commencement of Participation ................................................................. ..............................5
2.04
Information Provided by the Participant .................................................... ............................... 5
2.05
Contributions Made Promptly ............................... :................................................................... 6
2.06
Amendment of Annual Deferrals Election ................................................. ............................... 6
2.07
Leave of Absence ...................................................................................... ............................... 6
2.08
Disabil ity .................................................................................................... ..............................6
2.09
Revocation of Deferrals ............................................................................ ............................... 6
2.10
Re- Enrol lment ............................................................................................ ..............................6
III.
LIMITATIONS ON AMOUNTS DEFERRED .......................................... ............................... 7
3.01
Basic Annual Limitation Effective for Calendar Years on and after January 1, 2002 ............... 7
3.02
Age 50 Catch -Up Annual Deferral Contributions ...................................... ............................... 7
2005 Model 457(b) Plan Document
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TABLE OF CONTENTS (Continued)
SECTION 457 ELIGIBLE DEFERRED COMPENSATION PLAN
Page
3.03 Special §457 Catch -up Limitations for Calendar Years Beginning On and After January 1,
2005 Model 457(b) Plan Document
for Governmental Employers
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2002 ........................................................................................................... ............................... 7
3.04
Coordination of Age 50 Catch -up with Special §457 Catch- up ................. ...............................
8
3.05
Special Rul es ............................................................................................. ...............................
8
3.06
Correction of Excess Deferrals ................................................................. ...............................
9
3.07
Protection of Persons Who Serve in a Uniformed Service ........................ ...............................
9
IV.
LOANS ...................................................................................................... .............................10
4.01
Loans ......................................................................................................... .............................10
4.02
Maximum Loan Amount ............................................................................. .............................10
4.03
Loan Provisions ......................................................................................... .............................10
4.04
Security for Loan; Defaul t ....................................................................... ...............................
11
4.05
Repayment ................................................................................................. .............................11
V.
BENEFTT DISTRIBUTIONS ..................................................................... .............................12
5.01
Distributions from the Trust ..................................................................... ...............................
12
5.02
Conditions for Distributions ...................................................................... .............................12
5.03
Severance from Employment for any Reason, Including Retirement .......... .............................12
5.04
In- Service Distributions ............................................................................ .............................13
5.05
Unforeseeable Emergency Distributions .................................................... .............................14
5.06
Death Benefit Distributions ....................................................................... .............................15
5.07
Participant's Payment Options ................................................................... .............................19
5.08
Default Distribution Option ....................................................................... .............................19
5.09
Limitations on Distribution Options ......................................................... ...............................
19
5.10
Eligible Rollover Distributions ................................................................. .............................20
5.11
El ections .................................................................................................... .............................21
5.12
Practices and Procedures ........................................................................... .............................21
5.13
Taxation of Distributions ........................................................................... .............................21
VI.
ROLLOVERS AND TRANSFERS ............................................................ .............................21
6.01
Eligible Rollover Contributions to Pl an .................................................. ...............................
21
6.02
Plan -to -Plan Transfers to the Pl an ........................................................... ...............................
22
6.03
Plan -to -Plan Transfers from the Pl an ....................................................... ...............................
22
6.04
Permissive Service Credit Transfers ....................................................... ...............................
23
VII.
CREATION OF TRUST AND TRUST FUND ........................................ ...............................
23
7.01
Trust Fund ................................................................................................ ...............................
23
7.02
Establishment of Trust ............................................................................. ...............................
24
7.03
Appointment and Termination of Trustee ................................................. ...............................
24
7.04
Acceptance .............................................................................................. ...............................
25
7.05
Control of Plan Assets ............................................................................. ...............................
25
7.06
General Duties of the Trustee .................................................................. ...............................
25
7.07
Investment Powers of the Trustee ............................................................ ...............................
26
7.08
Trustee Fees and Expenses ........................................................................ .............................26
7.09
Exclusive Benefit Rules ........................................................................... ...............................
26
7.10
Trustee Actions ........................................................................................ ...............................
27
7.11
Del egation ................................................................................................. .............................27
2005 Model 457(b) Plan Document
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TABLE OF CONTENTS (Continued)
SECTION 457 ELIGIBLE DEFERRED COMPENSATION PLAN
Page
7.12
Division of Duties and Indemnification ..................................................... .............................27
VIII.
INVESTMENPS-------------------------------------------------------------------------------------- -------------------------------
29
8.01
Investment Options ---------------------------------------------------------------------------------- -------------------------------
28
8.02
Participant Investment Direction. ............................................................................................
28
8.03
Employer Investment Direction ..............................................................................................
29
8.04
Participant Accounts-------------------------------------------------------------------------------- -------------------------------
30
IX.
ADMINISTRATION ..............................................................................................................
30
9.01
Administrator ..........................................................................................................................
30
9.02
Appointment and Termination of Administrator ...................................... ...............................
30
9.03
Duties of Administrator ..........................................................................................................
30
9.04
Administrative Fees and Expenses .......................................................... ...............................
31
9.05
Actions of Administrator ........................................................................................................
31
9.06
Delegation -----------------------------------------------------------•----------------------------------- -..............................
31
9.07
Investment and Service Providers ........................................................... ...............................
32
X.
LEAVE OF ABSENCE ---------------------------------------•------------------------------------- -............................32
10.01
Paid Leave of Absence ...........................................................................................................
31
10.02
Unpaid Leave of Absence------------------------------------------------------------------------ -------------------------------
32
M.
AMENDMENT OR TERMINATION OF PLAN .................................... ...............................
32
11.01
Termination----------------------------------------------------------------------------------------------- --•--------------------------32
11.02
Amendment ................................................................................................ .............................32
11.03
Copies of Amendments
33
X11,
TAX TREATMENT OF AMOUNTS CONTRIBUTED-------------------------- -------------------------------
33
X11I.
NON- ASSIGNABII TTY
33
1301
Non-Assignability...................,....... ...............
33
1302
Qualified Domestic Relations Orders--------------------------------------•--------------- -------------------------------
33
13.03
IRS Levy ........... ............ ... - - ........... ...... -35
1304
Mistaken Contributions---- __------- - - - - -- _35
1305
Payments to Minors and Incompetents...___ --_---__- _
- ---------------------------------------- -------------- ----------- ---- -- --
35
13.06
Procedures When Distributee Cannot Be Located ..- _----- _--- __-------- __ - - -_ -_ -------- _--- .--- _-- __......_.-- ..... -_
35
XIV
- - - -- - - ----------- ---------------- --------- ------ ---------------------------------------
XV
EMPLOYER PARTICII'ATION
36
XVI
INTERPRETATION ...... .....
36
16.01
Governing Law
36
16.02
Internal Revenue Code § 457
36
16.03
Word Usage ...... ....... ...... _________36
16.04
Headings......36
16.05
Entire Agreement
36
2005 Model 457(b) Plan Document
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iii
�3
SECTION 457(b) ELIGIBLE DEFERRED COMPENSATION PLAN
In accordance with the provisions of §457 of the Internal Revenue Code of 1986, as amended, the
Employer named in section A. of the Adoption Agreement hereby establishes this §457(b) Eligible
Deferred Compensation Plan, hereinafter referred to as the "Plan." Nothing contained in this Plan
shall be deemed to constitute an employment agreement between any Participant and Employer and
nothing contained herein shall be deemed to give a Participant any right to be retained in the employ
of Employer.
I. DEFINITIONS
IN 1.01 "Account Balance." The bookkeeping account maintained with respect to each Participant
which reflects the value of the deferred Compensation credited to the Participant, including the
Participant's Annual Deferrals, the earnings or loss of the Fund (net of Fund expenses)
allocable to the Participant, any transfers for the Participant's benefit, and any distribution
made to the Participant or the Participant's Beneficiary. If a Participant has more than one
Beneficiary at the time of the Participant's death, then each beneficiary's share of the Account
Balance shall be treated as a separate account for each Beneficiary. The Account Balance
includes any account established under Article VI for rollover contributions and plan -to -plan
transfers made for a Participant, the account established for a Beneficiary after a Participant's
death, and any account or accounts established for an alternate payee (as defined in Code
§414(p)(8)).
1.02 "Administrator." Administrator means the person,.persons or entity appointed by the
Employer to administer the Plan as set forth in section A. of the Adoption Agreement.
Administrator shall not include the recordkeeper or any company which issues policies,
contracts, or investment media to the Plan in respect of a Participant.
1.03 "Alternate Payee." Alternate Payee means the spouse, former spouse, child or other
dependent of a Participant who has acquired an interest in the Participant's account pursuant to
a Qualified Domestic Relations Order (QDRO) pursuant to section 13.02. Alternate Payees
shall be treated as Beneficiaries for all purposes under the Plan except that Alternate Payees
shall be allowed to request a distribution of all or a portion of their account balance at any
time, subject to the terms of the QDRO.
1.04 "Annual Deferral." The amount of Compensation deferred in any taxable year.
1.05 "Beneficiary." The designated person (or, if none, the Participant's surviving spouse, if any,
and then the Participant's estate) who is entitled to receive benefits under the Plan after the
death of a Participant.
1.06 "Code." The Internal Revenue Code of 1986, as now in effect or as hereafter amended.
All citations to sections of the Code are to such sections as they may from time to time be
amended or renumbered.
2005 Model 457(b) Plan Document
for Governmental Employers
1`1
1.07 "Compensation." All cash compensation for services to the Employer, including salary,
wages, fees, commissions, bonuses, and overtime pay, that is includible in the Employee's
gross income for the calendar year, plus amounts that would be cash compensation for services
to the Employer includible in the Employee's gross income for the calendar year but for a
compensation reduction election under Code §§ 125, 132(f), 401(k), 403(b), or 457(b)
(including an election to defer compensation under Article III. To the extent permitted by
Treasury regulations or other similar guidance, accrued bona fide 'sick, vacation or other leave
pay paid within two and one -half (2 ''/3) months of Participant's severance from employment so
long as the employee would have been able to use the leave if employment had continued.
1.08 " Custodian." The bank, trust company or other person, if any, selected by the Employer in
section C. and named on page 6 of the Adoption Agreement and who is authorized to hold Plan
assets in a custodial account in accordance with regulations issued by the Secretary of the
Treasury pursuant to Code §401(f).
1.09 "Employee." Each natural person (individual) who is employed by the Employer, either as a
common law employee or an independent contractor, including elected or appointed
individuals, as selected in section D. of the Adoption Agreement. Any employee who is
included in a unit of employees covered by a collective bargaining agreement that does not
specifically provide for participation in the Plan shall be excluded.
1.10 "Employer." An eligible entity that is a State as defined below, and who is the sponsor of the
Plan named in the section A. of the Adoption Agreement.
1.11 "Includible Compensation." An employee's actual wages in box 1 of Form W -2 for a year for
services to the Employer, but subject to a maximum of $200,000 (or such higher maximum as
may apply under Code §401(a)(17)) and increased (up to the dollar maximum) by any
compensation reduction election under Code § §125, 132(f), 401(k), 403(b), or 457(b)
(including an election to defer Compensation under Article III.
1.12 " Nonelective Employer Contribution." Nonelective Employer Contribution is a
contribution made by an Employer for the Participant with respect to which the Participant does
not have the choice to receive the contribution in cash or property. Such term may also include
an employer matching contribution.
1.13 "Normal Retirement Age." Normal Retirement Age means age 70' /z, unless the Participant
has elected an alternate Normal Retirement Age and delivered such election to the
Administrator prior to beginning special §457 Catch -up contributions as described in section
3.03 of the Plan. Once a Participant has begun making special §457 Catch -up contributions, his
Normal Retirement Age may not be changed.
For Participants eligible to receive benefits under the Employer's basic defined benefit pension
plan or a money purchase pension plan (herein collectively referred to as "pension plan "), a
Participant's alternate Normal Retirement Age may not be earlier than the earliest date the
Participant has the right to retire and receive immediate retirement benefits under such pension
plan, without actuarial or similar reduction because of retirement before some later specified
age, and the date selected may not be later than age 70' /z.
2005 Model 457(b) Plan Document
for Governmental Employers
6
If the Participant is not eligible to receive benefits under a basic defined benefit pension plan or
money purchase pension plan, the Participant's alternate Normal Retirement Age may not be
earlier than age 65 nor later than age 70 %.
A special rule shall apply to qualified police or firefighters under the Plan, if any. Any
qualified police or firefighter, as defined under §415(b)(2)(H)(ii)(I), who is participating in the
Plan may choose a Normal Retirement Age that is not earlier than age 40 nor later than age 70
%.
If any Participant continues to be employed by Employer after attaining age 70%3, not having
previously elected an alternate Normal Retirement Age, the Participant's alternate Normal
Retirement Age shall not be later than the age at which the Participant actually severs
employment with the Employer.
1.14 "Participant." An individual who is currently deferring Compensation, or who has
previously deferred Compensation under the Plan by salary reduction or received a
Nonelective Employer Contribution and who has not received a distribution of his or her entire
benefit under the Plan. Only individuals who perform services for the Employer as an
Employee may defer Compensation under the Plan. The Administrator, if he or she is otherwise
eligible, may participate in the Plan.
1.15 "Participation Agreement." The agreement entered into and filed by an Employee with the
Employer pursuant to Article II, in which the Employee elects to become a Plan Participant
1.16 "Plan." The Plan named in section A. of the Adoption Agreement.
1.17 "Plan Year." The calendar year.
1.18 "Severance from Employment." The date the Employee dies, retires, or otherwise has a
severance from employment with the Employer, as determined by the Administrator (and taking
into account guidance issued under the Code). An Employee whose employment is interrupted
by qualified military service under Code §414(u) shall be deemed severed from employment
until such time as he or she is reemployed following the term of duty. All other Participants
shall be deemed to have severed his employment with the Employer for purposes of this Plan
when both parties consider the employment relationship to have terminated and neither party
anticipates any future employment of the Participant by the Employer. In the case of a
Participant who is an independent contractor, Severance from Employment shall be deemed to
have occurred when the Participant's contract for services has completely expired and
terminated, there is no foreseeable possibility that the Employer shall renew the contract or
enter into a new contract for services to be performed by the Participant, and it is not
anticipated that the Participant shall become an Employee of the Employer.
1.19 "Trust or Custodial Agreement." The written agreement (or declaration) made by and
between the Employer and the Trustee under which the Trust Fund is maintained. Custodial
accounts and annuity contracts described in §401(f) are treated as trusts under the rules
described in Treasury Reg. § 1.457- 9(a)(2).
1.20 "Trust Fund." The trust fund created under and subject to the Trust Agreement or Custodial
Agreement, as selected in section C. and named on page 7 of the Adoption Agreement.
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1.21 "Trustee." The Trustee duly appointed and currently serving under the Trust Agreement if
selected in the Adoption Agreement.
1.22 "Valuation Date." Each business day.
II. PARTICIPATION AND CONTRIBUTIONS
2.01 Eli ibili . Individuals performing services for the Employer, as selected in section D. of
the Adoption Agreement, shall be eligible to participate in the Plan upon becoming employed
by the Employer unless specifically restricted in the Adoption Agreement.
2.02 Election Required for Participation An Employee may elect to become a Participant by
executing a Participation Agreement to defer a portion of his or her Compensation (and have
that amount contributed as an Annual Deferral on his or her behalf) and filing it in good order
with the Administrator. In entering into the Participation Agreement, the Participant elects to
participate in this Plan and consents to the deferral by the Employer of the amount specified in
the Participation Agreement from the Participant's gross compensation for each payroll period,
and agrees to be bound by all the terms and conditions of the Plan. Such deferral shall continue
in effect until modified, disallowed or revoked in accordance with the terms of this Plan, or
until the Participant ceases employment with the Employer. Any prior Employee who was a
Participant in the Plan and is rehired by Employer may resume participation in the Plan by
entering into a Participation Agreement so long as any distributions being taken from this Plan
are terminated prior to the resumption of deferrals under the Plan. Additionally, if distributions
had not begun pursuant to a prior Severance from Employment, any deferred commencement
date elected by such employee with respect to distribution of those prior Plan assets shall be
null and void.
The Employer retains the right to establish minimum deferral amounts per payroll period, and to
change such minimums from time to time and to limit the number and/or timing of enrollments
into the Plan in the Participation Agreement. No adjustment in future deferrals shall be made if
a periodic deferral is missed or is less than the amount elected. The Employer or
Administrator shall have the right to modify or disallow the periodic deferral of Compensation
elected by the Participant:
(a) in excess of the limitations stated in Article III;
(b) in excess of the Participant's net Compensation for any payroll period;
(c) upon any change in the length of payroll period utilized by Employer. In such case the
periodic deferral shall be adjusted so that approximately the same percentage of pay
shall be deferred on an annual basis;
(d) in order to round periodic deferrals to the nearest whole dollar amount;
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(e) to reduce the future deferrals in the event that the amount actually defaced for any
payroll period exceeds, for any reason whatsoever, the amount elected by the
Participant. In the alternative, such amount of excess deferral may be refunded to the
Participant; or
(f) if the deferral elected for any payroll period is less than the minimum amount specified
by the Employer or Administrator.
The participation election, or such other form as approved by the Administrator, shall include
the Employee's designation of investment funds. Any such election shall remain in effect until a
new election is filed. A change in the investment direction shall take effect as of the date
provided by the Administrator on a uniform basis for all Employees. The Participant may also
designate a Beneficiary(ies) to receive any amounts that may be distributed in the event of death
of the Participant prior to the complete distribution of benefits. A Participant may change the
designated Beneficiary(ies) at any time by filing such change with the Administrator in a
manner approved by the Administrator. A change in the Beneficiary designation shall take
effect when the election is accepted by the Administrator. If no such designation is in effect on
the Participant's death, or to the extent that there is no beneficiary who is treated as surviving
the Participant by 30 days, the Beneficiary shall be the Participant's surviving spouse, if any, or
if none, the Participant's estate.
2.03 Commencement of Participation.
(a) Voluntary Enrollment. An Employee shall become a Participant as soon as
administratively practicable following the date the Employee files a participation
election pursuant to section 2.02. Such election shall become effective no earlier than
the calendar month following the month in which the election is made. A new Employee
may defer compensation payable in the calendar month during which the Participant first
becomes an Employee if an agreement providing for the deferral is entered into on or
before the first day on which the Participant performs services for the Employer.
(b) Automatic Enrollment. Notwithstanding section 2.01 and section 2.02, to the
extent permitted by applicable law, the Administrator may establish procedures
whereby, as a term or condition of employment, each employee automatically elects to
participate in the Plan and consents to the deferral by the Employer of a specified
amount for any payroll period for which a Participation Agreement is not in effect. If
such procedures are in place, a Participant may elect a different deferral amount per
payroll period, including zero, by entering into a Participation Agreement.
2.04 Information Provided by the Participant. Each Employee enrolling in the Plan should
provide to the Administrator at the time of initial enrollment, and later if there are any changes,
any information necessary or advisable, in the sole discretion of the Administrator,
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for the Administrator to administer the plan, including, without limitation, whether the
Employee is a participant in any other eligible plan under Code §457(b).
2.05 Contributions Made Promvtiv. Annual Deferrals by the Participant under the Plan shall
be transferred to the Trust Fund within a period that is not longer than is reasonable for the
proper administration of the Participant's Account Balance. For this purpose, Annual Deferrals
shall be treated as contributed within a period that is not longer than is reasonable for the
proper administration if the contribution is made to the Trust Fund within 15 business days
following the end of the month in which the amount would otherwise have been paid to the
Participant.
2.06 Amendment of Annual Deferrals Election Subject to other provisions of the Plan, a
Participant may at any time revise his or her participation election, including a change of the
amount of his or her Annual Deferrals. Unless the election specifies a later effective date, a
change in the amount of the Annual Deferrals shall take effect as of the first day of the next
following month or as soon as administratively practicable if later. Notwithstanding the
above, if a negative election procedure has been implemented pursuant to section 2.03(b), a
Participant may enter into or modify a Participation Agreement at any time to provide for no
deferral.
2.07 Leave of Absence. Unless an election is otherwise revised, if Participant is absent from
work by leave of absence, Annual Deferrals under the Plan shall continue to the extent that
Compensation continues.
2.08 Disabi ' A disabled Participant may elect Annual Deferrals during any portion of the
period of his or her disability to the extent that he or she has actual Compensation (not imputed
Compensation and not disability benefits) from which to make contributions to the Plan and has
not had a Severance from Employment.
2.09 Revocation of Deferrals. In addition to a Participant's ability to change or revoke an
election as described in section 2.06, a Participant's request for a distribution in the event of an
Unforeseeable Emergency as defined in section 5.05(b) shall in addition be treated as a request
for revocation of deferrals as of a date determined by the Administrator for the period of time
determined under section 5.05(f). Revocation of deferrals is not a distributable event,
however, and the Participant's Account may only be distributed as provided in Article V.
2.10 Re- Enrollment. A Participant who revokes the Participation Agreement may again
become a Participant at the times and in the manner authorized by the Administrator, by entering
into a new Participation Agreement to defer Compensation payable no earlier than the fast
payroll period after the first day of the month after such new Participation Agreement is entered
into by the Participant and accepted by the Administrator.
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III. LIMITATIONS ON AMOUNTS DEFERRED
3.01 Basic Annual Limitation Effective for Calendar Years on and after January 1. 2002. The
maximum amount of the Annual Deferral under the Plan for any calendar year shall not exceed
the lesser of (i) the Applicable Dollar Amount or (ii) the Participant's Includible
Compensation for the calendar year. The Applicable Dollar Amount is the amount established
under Code §457(e)(15) applicable as follows:
$11,000 for 2002;
$12,000 for 2003;
$13,000 for 2004;
$14,000 for 2005; and $15,000
for 2006 and thereafter. After 2006, the $15,000 amount is adjusted for cost -of- living under
Code §415(d).
The annual deferral amount does not include any rollover amounts received by the Plan under
Treasury Reg. § 1.457- 10(e).
3.02 Ave 50 Catches Annual Deferral Contributions. A Participant who will attain age 50 or
more by the end of the calendar year is permitted to elect an additional amount of Annual
Deferrals, up to the maximum age 50 catch -up Annual Deferrals for the year. The maximum
dollar amount of the age 50 catch -up Annual Deferrals for a year is as follows:
$1,000 for 2002;
$2,000 for 2003;
$3,000 for 2004;
$4,000 for 2005;
$5,000 for 2006 and thereafter. After 2006, the $5,000 amount is adjusted for cost -of- living.
Age 50 catch -up contributions are subject to the requirements of Code §414(v).
3.03 Snecial 4457 Catch -up Limitations for Calendar Years Beainnins On and After January 1. 2002
If the applicable year is one of a Participant's last three (3) calendar years ending before the
year in which the participant attains Normal Retirement Age and the amount determined under
this section exceeds the amount computed under sections 3.01 and 3.02, then the Annual
Deferral limit under this section shall be the lesser of
(a) an amount equal to two (2) times the section 3.01 applicable dollar limit for such year;
or
(b) the sum of
An amount equal to the aggregate section 3.01 limit for the current year plus
each prior calendar year beginning after December 31, 2001, during which the
Participant was an Employee under the Plan, minus the aggregate amount of
Compensation that the Participant deferred under the Plan during such years,
Plus
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2. An amount equal to the aggregate limit referred to in Code §457(b)(2) for each
prior calendar year beginning after December 31, 1978, and before January 1,
2002, during which the Participant was an Employee (determined without regard
to sections 3.02 and 3.03), minus the aggregate contributions to Pre-2002
Coordination Plans for such years.
However, in no event can the deferred amount be more than the Participant's Compensation for
such years unless the Employer is making non - elective Employer contributions.
3.04 Coordination ofARe 50 Catch -un with Snecial &457 Catch-up. The Age 50 Catch -up does
not apply for any taxable year for which a higher limitation applies under the Special §457
Catch -up described in section 3.03. A Participant who is eligible for the Age 50 Catch -up for a
Plan Year and for whom the Plan Year is also one of the Participant's last three (3) taxable
years ending before the Participant attains Normal Retirement Age is eligible for the larger of
(a) The basic annual limitation described in 3.01 and the Age 50 Catch -up described in
section 3.02, or
(b) The basic annual limitation described in section 3.01 and the Special §457 Catch -up
described in section 3.03.
3.05 Special Rules. For purposes of this Article III, the following rules shall apply:
(a) Participant Covered By More Than One Eligible Plan. If the Participant is or has
been a participant in one or more other eligible plans within the meaning of Code
§457(b), then this Plan and all such other plans shall be considered as one plan for
purposes of applying the foregoing limitations of this Article III. For this purpose, the
Administrator shall take into account any other such eligible plan maintained by the
Employer and shall also take into account any other such eligible plan for which the
Administrator receives from the Participant sufficient information concerning his or her
participation in such other plan.
(b) Pre- Participation Years. In applying section 3.03, a year shall be taken into
account only if the Participant was eligible to participate in the Plan during all or a
portion of the year and Compensation deferred, if any, under the Plan during the year
was subject to the Basic Annual Limitation described in section 3.01 or any other plan
ceiling required by Code §457(b).
(c) Pre-2002 Coordination Years. For purposes of section 3.03(b)(2)(B),
"contributions to Pre-2002 Coordination Plans" means any employer contribution,
salary reduction or elective contribution under any other eligible Code §457(b) plan, or
a salary reduction or elective contribution under any Code §401(k) qualified cash or
deferred arrangement, Code §402(h)(1)(B) simplified employee pension (SARSEP),
Code §403(b) annuity contract, and Code §408(p) simple retirement account, or under
any plan for which a deduction is allowed because of a contribution to an organization
described in Code § 501(c)(18), including plans, arrangements or accounts maintained
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by the Employer or any employer for whom the Participant performed services.
However, the contributions for any calendar year are only taken into account for
purposes of section 3.03(b)(2)(B) to the extent that the total of such contributions does
not exceed the aggregate limit referred to in Code §457(b)(2) for that year.
(d) Disregard-Excess Deferral. For purposes of sections 3.01, 3.02 and 3.03, an
individual is treated as not having deferred compensation under a plan for a prior
taxable year to the extent Excess Deferrals under the plan are distributed, as described
in section 3.06. To the extent that the combined deferrals for pre-2002 years exceeded
the maximum deferral limitations, the amount is treated as an Excess Deferral for those
prior years.
3.06 Correction of Excess Deferrals. If the Annual Deferral on behalf of a Participant for any
calendar year exceeds the limitations described above, or the Annual Deferral on behalf of a
Participant for any calendar year exceeds the limitations described above when combined with
other amounts deferred by the Participant under another eligible deferred compensation plan
under Code §457(b) for which the Participant provides information that is accepted by the
Administrator, then the Annual Deferral, to the extent in excess of the applicable limitation
(adjusted for any income or loss in value, if any, allocable thereto), shall be distributed to the
Participant.
3.07 Protection of Persons Who Serve in o '_'niformed Service. An Employee whose
employment is interrupted by qualified military service under Code §414(u) may elect to make
additional Annual Deferrals upon resumption of employment with the Employer equal to the
maximum Annual Deferrals that the Employee could have elected during that period if the
Employee's employment with the Employer had continued (at the same level of Compensation)
without the interruption or leave, reduced by the Annual Deferrals, if any, actually made for the
Employee during the period of the interruption or leave. This right applies for five (5) years
following the resumption of employment (or, if sooner, for a period equal to three times the
period of the interruption or leave).
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IV. LOANS
4.01 Loans. If so specified in section E. of the Adoption Agreement, a Participant who is an
Employee may apply for and receive a loan from his or her Account Balance as provided in this
Article IV or pursuant to a loan policy executed by the Plan Administrator. Any such loan may
not be for an amount less than the minimum amount specified by the Administrator. If not
specified by the Administrator, the minimum loan amount shall be $1,000.
Except as modified by the loan policy adopted by the Plan Administrator from time to time, the
following rules shall apply to loans under the Plan.
4.02 Maximum Loan Amount No loan to a Participant hereunder may exceed the lesser of
(a) $50,000, reduced by the greater of (i) the outstanding balance on any loan from the Plan
to the Participant on the date the loan is made or (ii) the highest outstanding balance on
loans from the Plan to the Participant during the one -year period ending on the day
before the date the loan is approved by the Administrator (not taking into account any
payments made during such one -year period), or
(b) one -half of the value of the Participant's vested Account Balance.
For purposes of this section 4.02, any loan from any other plan maintained by a
participating employer shall be treated as if it were a loan made from this Plan, and the
Participants vested interest under any such other plan shall be considered a vested
interest under this Plan; provided, however, that the provisions of this paragraph shall
not be applied so as to allow the amount of loan under this section 4.02 to exceed the
amount that would otherwise be permitted in the absence of this paragraph.
4.03 Loan Provisions. The terms of the loan shall:
(a) require level amortization with payments not less frequently than quarterly throughout
the repayment period, except that alternative arrangements for repayment may apply in
the event that the borrower is on a bona fide unpaid leave of absence for a period not to
exceed one (1) year for leaves other than a qualified military leave within the meaning
of Code §414(u) or for the duration of an interruption of employment which is due to
qualified military service;
(b) require that the loan be repaid within five (5 )years unless the Participant certifies in
writing to the Administrator that the loan is to be used to acquire any dwelling unit
which within a reasonable time is to be used (determined at the time the loan is made)
as a principal residence of the Participant; and
(c) provide for a reasonable rate of interest to be fixed by the Administrator from time to
time. The Administrator shall not discriminate among Participants in the matter of
interest rates, but loans granted at different times may bear different interest rates based
upon prevailing rates at the time.
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D,3
A loan to a Participant shall be considered a directed investment option for such Participant's
account balance.
4.04 Security for Loan: Default.
(a) Security. Any loan to a Participant under the Plan shall be segued by the pledge
of the portion of the Participant's interest in the Plan invested in such loan.
(b) Default In the event that a Participant fails to make a loan payment under this
Article IV by the end of the calendar quarter following the calendar quarter in which
such payment was due, a default on the loan shall occur. In the event of such default;
(i) all remaining payments on the loan shall be immediately due and payable;
(ii) interest will continue to accrue on the unpaid balance until the loan is repaid in
full; and
(iii) the Participant shall be permanently ineligible for any future loans from the Plan
unless, in the Administrator's sole discretion, the Participant is deemed to be
credit worthy and agrees to repay the loan through payroll deduction.
In the case of any default on a loan to a Participant, the Administrator shall apply the portion of
the Participant's interest in the Plan held as security for the loan in satisfaction of the loan on the
date of Severance from Employment. In addition, the Administrator shall take any legal action it
shall consider necessary or appropriate to enforce collection of the unpaid loan, with the costs
of any legal proceeding or collection to be charged to the Account Balance of the Participant.
Notwithstanding anything elsewhere in the Plan to the contrary, in the event a loan is
outstanding hereunder on the date of a Participant's death, his or her estate shall be his or her
Beneficiary as to the portion of his or her interest in the Plan invested in such loan (with the
Beneficiary or Beneficiaries as to the remainder of his or her interest in the Plan to be
determined in accordance with otherwise applicable provisions of the Plan).
4.05 Repayment The Participant shall be required, as a condition to receiving a loan, to enter into
an irrevocable agreement authorizing the Employer to make payroll deductions from his or her
Compensation as long as the Participant is an Employee and to transfer such payroll deduction
amounts to the Trustee in payment of such loan plus interest. Repayments of a loan shall be
made by payroll deduction of equal amounts (comprised of both principal and interest) from
each paycheck, with the first such deduction to be made as soon as practicable after the loan
funds are disbursed; provided, however, a Participant may prepay the entire outstanding
balance of his loan at any time; and provided, further, that if any payroll deductions cannot be
made in full because a Participant is on an unpaid leave of absence or is no longer employed by
a participating employer (that has consented to make payroll deductions for this purpose) or the
Participant's paycheck is insufficient for any other reason, the Participant shall pay directly to
the Plan the full amount that would have been deducted from the Participant's paycheck, with
such payment to be made by the last business day of the calendar month in which the amoun!
would have been deducted.
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V.
5.01 Distributions from the Trust. The payment of benefits from the Trust in accordance with the
terms of the Plan may be made by the Trustee, or by any custodian or other person so authorized
by the Employer to make such distribution. Neither the Administrator, the Trustee, the
Custodian nor any other person shall be liable with respect to any distribution from the Trust
made at the direction of the Employer or a person authorized by the Employer to give
disbursement direction.
5.02 Conditions for Distributions.
(a) 457 Deferred Compensation. Payments from a Participant's §457 Deferred
Compensation account shall not be made to the Participant or Beneficiary earlier than:
(1) the Participant's Severance from Employment or death pursuant to sections 5.03
and 5.06;
(2) the Participant's account meets all of the requirements for an in- service de
minimis distribution pursuant to section 5.04(a) and/or (b);
(3) the Participant incurs an approved Unforeseeable Emergency pursuant to section
5.05;
(4) The calendar year in which an in- service Participant attains age 70'/3, but only
if such participant revokes all deferrals of Compensation into the Plan prior to
beginning distributions; or
(5) Plan termination under section 11.01.
(b) Latest Distribution Date. In no event shall any distribution to a Participant under
this Article V begin later than the April 1 of the year following the calendar year in
which the participant attains age 70'/3 or April 1 of the year following the year in which
the Participant retires or otherwise has a Severance from Employment, whichever is
later. If the Participant delays the distribution due in the calendar year he turns age 70
'/ or severs employment, as applicable, to the following calendar year, a second
required minimum distribution must be taken by the end of that calendar year.
(c) Rollovers. If a Participant has a separate account attributable to rollover
contributions to the Plan, the Participant may at any time elect to receive a distribution
of all or any portion of the amount held in the rollover account(s).
5.03 Severance from Employment for any Reason Including Retirement.
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(a) Subject to section 5.03(b), distributions to a Participant shall commence following
Severance from Employment, on the regular distribution commencement date (as the .
Employer or Administrator may establish from time -to -time) elected by the Participant,
in a form and manner determined pursuant to sections 5.07, 5.08 and 5.09. If the
Participant does not elect otherwise, the distribution shall be paid commencing on the
Participant's Required Beginning Date under a payment method meeting the
requirements of Code §401(a)(9) and the regulations thereunder.
(b) If, in section F. of the Adoption Agreement, the Plan elected mandatory distributions of
Account Balances of $1,000 or less, and if the Participant does not elect to have such
distribution paid directly to an eligible retirement plan specified by the Participant in a
direct rollover or to receive the distribution directly, then the Administrator will pay the
distribution in a lump sum to the Participant at the Participant's last known mailing
address.
If, in section F. of the Adoption Agreement, the Plan elected mandatory distributions of amounts
greater than $1,000 but not greater than $5,000, and if the Participant does not elect to have
such distribution paid directly to an eligible retirement plan specified by the Participant in a
direct rollover or to receive the distribution directly, then the Administrator will pay the
distribution amount in excess of$1,000 in a direct rollover to an individual retirement plan
designated by the plan administrator.
5.04 In- Service Distributions.
(a) Voluntary In- Service Distribution of De Minimis Accounts. A Participant who is ar,
active Employee may elect to receive a distribution of the total amount payable to the
Participant under the Plan if the following requirements are met:
(1) the portion of the total amount payable to the Participant under the Plan does not
exceed an amount specified from time to time by the Administrator (not in
excess of $5,000 or other applicable limit under the Code);
(2) the Participant has not previously received an in- service distribution of the total
amount payable to the Participant under the Plan; and
(3) no amount has been deferred under the Plan with respect to the Participant
during the two-year period ending on the date of the in- service distribution.
(b) Involuntary In- Service Distribution of De Minimis Accounts. If so elected in section
G. of the Adoption Agreement, the Administrator shall distribute the total amount
payable under the Plan to a Participant who is an active Employee if the following
requirements are met:
(1) the Participant has not previously received an in- service distribution of the total
amount payable to the Participant under the Plan;
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(2) no amount has been deferred under the Plan with respect to the Participant
during the two-year period ending on the date of the in- service distribution; and
(3) the total Account Balance amount payable to the Participant under the Plan, does
not exceed the amount selected in section G. of the Adoption Agreement
If, in section G. of the Adoption Agreement, the Plan elected mandatory distributions of
$1,000 or less, and if the Participant does not elect to have such distribution paid
directly to an eligible retirement plan specified by the Participant in a direct rollover or
to receive the distribution directly, then the Administrator will pay the distribution in a
lump sum to the Participant at the Participant's last known mailing address.
If, in section G. of the Adoption Agreement, the Plan elected mandatory distributions
greater than $1,000 but not greater, than $5,000, and if the Participant does not elect to
have such distribution paid directly to an eligible retirement plan specified by the
Participant in a direct rollover or to receive the distribution directly, then the
Administrator will pay the distribution in a direct rollover to an individual retirement
plan designated by the plan administrator.
(c) As indicated in section J. of the Adoption Agreement, participants in a plan that is a
retirement system providing FICA replacement retirement benefits pursuant to
regulations under Code §312l(b)(7)(F) are not eligible for In- Service De Minimis
distributions.
5.05 Unforeseeable Emergency Distributions.
(a) Distribution If the Participant has an unforeseeable emergency before
retirement or other Severance from Employment, the Participant may elect to receive a
lump sum distribution equal to the amount requested or, if less, the maximum amount
determined by the Administrator to be permitted to be distributed under this section
5.05.
(b) Unforeseeable emergency defined. An unforeseeable emergency is defined as a
severe financial hardship of the Participant resulting from: an illness or accident of the
Participant, the Participant's spouse, or the Participant's dependent (as defined in Code
§ 152(a)); loss of the Participant's property due to casualty (including the need to rebuild
a home following damage to a home not otherwise covered by homeowner's insurance,
e.g., as a result of a natural disaster); the need to pay for the funeral expenses of the
Participant's spouse or dependent (as defined in Code § 152(a)); or other similar
extraordinary and unforeseeable circumstances arising as a result of events beyond the
control of the Participant. For example, the imminent foreclosure of or eviction from the
Participant's primary residence may constitute an unforeseeable emergency. In addition,
the need to pay for medical expenses, including non - refundable deductibles, as well as
for the cost of prescription drug medication, may constitute an unforeseeable emergency.
Except as otherwise specifically provided in this section 5.05, neither the purchase of
home nor the payment of college tuition is an unforeseeable emergency.
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(c) Unforeseeable emergency distribution standard. A distribution on account of
unforeseeable emergency may not be made to the extent that such emergency is or may
be relieved through reimbursement or compensation from insurance or otherwise, by
liquidation of the Participant's assets, to the extent the liquidation of such assets would
not itself cause severe financial hardship, or by cessation of deferrals under the Plan.
(d) Distribution necessary to satisfy emergency need. Distributions because of an
unforeseeable emergency may not exceed the amount reasonably necessary to satisfy the
emergency need (which may include any amounts necessary to pay any federal, state, or
local income taxes or penalties reasonably anticipated to result from the distribution).
(e) The Administrator shall have the right to request and review all pertinent information
necessary to assure that Unforeseeable Emergency withdrawal requests are consistent
with the provisions of Code §457.
(f) The Employer or Administrator may suspend the Participant's salary deferral election
during the pendency of the Participant's request for an Unforeseeable Emergency
distribution. Payment of an Unforeseeable Emergency distribution shall result in
mandatory suspension of deferrals for a minimum of six (6) months from the date of
payment (or such other period as mandated in applicable Treasury regulations).
(g) As indicated in section J. of the Adoption Agreement, participants in a plan that is a
retirement system providing FICA replacement retirement benefits pursuant to
regulations under Code §3121(b)(7)(F) are not eligible for unforeseeable emergency
distributions.
5.06 Death Benefit Distributions. Upon receipt of satisfactory proof of the Participant's death, the
Participant's remaining Account Balance shall be paid under a method satisfying the required
minimum distribution Wile of Code §401(a)(9) and the regulations thereunder.
(a) Participant's Regred Beginning Date, The Participant's entire interest will be
distributed, or begin to be distributed, to the Participant no later than the Participant's
required beginning date as defined in Section 5.06(1).
(b) Death of Participant Before Participant's Required Beginning Date. If the Participant
dies before the required beginning date, the Participant's entire interest will be
distributed, or begin to be distributed, no later than as follows:
(1) If the Participant's surviving spouse is the Participant's sole designated
beneficiary, then, except as provided in Section 5.06(f), distributions to the
surviving spouse will begin by December 31 of the calendar year immediately
following the calendar year in which the Participant died, or by December 31 of
the calendar year in which the Participant would have attained age 70%3, if later.
(2) If the Participant's surviving spouse is not the Participant's sole designated
beneficiary, then, unless the Beneficiary elects the five -year Wile, distributions to
2005 Model 457(b) Plan Document 15
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the designated beneficiary will begin by December 31 of the calendar year
immediately following the calendar year in which the Participant died.
(3) If there is no designated beneficiary as of September 30 of the year following
the year of the Participant's death, the Participant's entire interest will be
distributed by December 31 of the calendar year containing the fifth anniversary
of the Participant's death.
(4) If the Participant's surviving spouse is the Participant's sole designated
beneficiary and the surviving spouse dies after the Participant but before
distributions to the surviving spouse begin, this Section 5.06(b), other than
Section 5.06(b)(1), will apply as if the surviving spouse were the Participant.
For purposes of this Section 5.06(b) and Section 5.06(f) unless Section
5.06(b)(4) applies, distributions are considered to begin on the Participant's
required beginning date. If Section 5.06(b)(4) applies, distributions are
considered to begin on the date distributions are required to begin to the
surviving spouse under Section 5.06(b)(1). If distributions under an annuity
purchased from an insurance company irrevocably commence to the Participant
before the Participant's required beginning date (or to the Participant's surviving
spouse before the date distributions are required to begin to the surviving spouse
under Section 5.06(b)(1)), the date distributions are considered to begin is the
date distributions actually commence.
(c) Forms of Distribution Unless the Participant's interest is distributed in the form of an
annuity purchased from an insurance company or in a single sum on or before the
required beginning date, as of the first distribution calendar year distributions will be
made in accordance with Section 5.06. If the Participant's interest is distributed in the
form of an annuity purchased from an insurance company, distributions thereunder will
be made in accordance with the requirements of Code §401(a)(9) and the Treasury
regulations.
(d) Amount of Required Minimum Distribution For Each Distribution Calendar Year
During the Participant's Lifetime. During the Participant's lifetime, the minimum
amount that will be distributed for each distribution calendar year is the lesser of.
(1) the quotient obtained by dividing the Participants account balance by the
distribution period in the Uniform Lifetime Table set forth in Section
1.401(a)(9) -9 of the Treasury regulations, using the Participant's age as of the
Participant's birthday in the distribution calendar year; or
(2) if the Participant's sole designated beneficiary for the distribution calendar year
is the Participant's spouse, the quotient obtained by dividing the Participant's
account balance by the number in the Joint and Last Survivor Table set forth in
Section 1.401(a)(9) -9 of the Treasury regulations, using the Participant's and
2005 Model 457(b) Plan Document 16
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aci
spouse's attained ages as of the Participant's and spouse's birthdays in the
distribution calendar year.
(e) Lifetime Required Minimum Distributions Continue Through Year of Participant's
Death. Required minimum distributions will be determined under Sections 5.06(d) and
(e) beginning with the first distribution calendar year and up to and including the
distribution calendar year that includes the Participant's date of death.
(f) Death On or After Participant's Required Beginning Date.
(1) Participant Survived by Designated Beneficiary. If the Participant dies on or
after the Participant's required beginning date and there is a designated
beneficiary, the minimum amount that will be distributed for each distribution
calendar year after the year of the Participant's death is the quotient obtained by
dividing the Participant's account balance by the longer of the remaining life
expectancy of the Participant or the remaining life expectancy of the
Participant's designated beneficiary, determined as follows:
(a) The Participant's remaining life expectancy is calculated using the age of
the Participant in the year of death, reduced by one for each subsequent
year.
(b) If the Participant's surviving spouse is the Participant's sole designated
beneficiary, the remaining life expectancy of the surviving spouse is
calculated for each distribution calendar year after the year of the
Participant's death using the surviving spouse's age as of the spouse's
birthday in that year. For distribution calendar years after the year of the
surviving spouse's death, the remaining life expectancy of the surviving
spouse is calculated using the age of the surviving spouse as of the
spouse's birthday in the calendar year of the spouse's death, reduced by
one for each subsequent calendar year.
(c) If the Participant's surviving spouse is not the Participant's sole
designated beneficiary, the designated beneficiary's remaining life
expectancy is calculated using the age of the beneficiary in the year
following the year of the Participant's death, reduced by one for each
subsequent year.
(2) No Designated Beneficiary. If the Participant dies on or after the date
distributions begin and there is no designated beneficiary as of September 30 of
the year after the year of the Participant's death, the minimum amount that will
be distributed for each distribution calendar year after the year of the
Participant's death is the quotient obtained by dividing the Participant's account
balance by the Participant's remaining life expectancy calculated using the age
of the Participant in the year of death, reduced by one for each subsequent year.
2005 Model 457(b) Plan Document 17
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23a
(g) Death Before Participant's Required Beginning Date.
(1) Participant Survived by Designated Beneficiary. If the Participant dies before
the required beginning date and there is a designated beneficiary, the minimum
amount that will be distributed for each distribution calendar year after the year
of the Participant's death is the quotient obtained by dividing the Participant's
account balance by the remaining life expectancy of the Participant's designated
beneficiary, determined as provided in Section 5.06(f).
(2) No Designated Beneficiary. If the Participant dies before the required
beginning date and there is no designated beneficiary as of September 30 of the
year following the year of the Participant's death, distribution of the
Participant's entire interest will be completed by December 31 of the calendar
year containing the fifth anniversary of the Participant's death.
(3) Death of Surviving Spouse Before Distributions to Surviving Spouse Are
Reouired to Benin. If the Participant dies before the required beginning date, the
Participant's surviving spouse is the Participant's sole designated beneficiary,
and the surviving spouse dies before distributions are required to begin to the
surviving spouse under Section 5.06(b)(1), this Section 5.06(g)(3) will apply as
if the surviving spouse were the Participant.
(h) Designated beneficiary. The individual who is designated as the Beneficiary under the
Plan and is the designated beneficiary under Section 401(a)(9) of the Internal Revenue
Code and Section 1.401(a)(9) -1, Q&A -4, of the Treasury regulations.
(i) Distribution calendar year. A calendaryear for which a minimum distribution is
required. For distributions beginning before the Participant's death, the first
distribution calendar year is the calendar year immediately preceding the calendar year
which contains the Participant's required beginning date. For distributions beginning
after the Participant's death, the first distribution calendar year is the calendar year in
which distributions are required to begin under Section 5.06(b). The required minimum
distribution for the Participant's first distribution calendar year will be made on or
before the Participant's required beginning date. The required minimum distribution for
other distribution calendar years, including the required minimum distribution for the
distribution calendar year in which the Participant's required beginning date occurs,
will be made on or before December 31 of that distribution calendar year.
(j) Life expectancy. Life expectancy as computed by use of the Single Life Table in
Section 1.401(a)(9) -9 of the Treasury regulations.
(k) Participant's account balance. The account balance as of the last valuation date in the
calendar year immediately preceding the distribution calendar year (valuation calendar
year) increased by the amount of any contributions made and allocated or forfeitures
allocated to the account balance as of dates in the valuation calendar year after the
2005 Model 457(b) Plan Document 18
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31
valuation date and decreased by distributions made in the valuation calendar year after
the valuation date. The account balance for the valuation calendar year includes any
amounts rolled over or transferred to the Plan either in the valuation calendar year or in
the distribution calendar year if distributed or transferred in the valuation calendar year.
(1) Required beginning date. The date specified under Section 401(a)(9) of the Internal
Revenue Code when distributions are required to begin, which, for a Participant, is
currently the April 1 following the year the Participant attains age 70 '/2 or retires,
whichever is later.
5.07 Participant's Payment Options. A Participant's election of a payment option must be
made at least thirty (30) days prior to the date that the payment of benefits is to commence or
such earlier date as may be permitted by the plan. If a timely election of a payment option is not
made, benefits shall be paid in accordance with section 5.08. Subject to applicable law and the
other provisions of this Plan, distributions may be made in accordance with one of the
following payment options.
(a) A single lump -sum payment of the entire Account Balance;
(b) Installment payments for a period of years (payable on a monthly, quarterly, semi -
annual, or animal basis) which extends no longer than the life expectancy of the
Participant as permitted under Code §401(a)(9) using the Uniform Lifetime Table at
Reg. § 1.041(a)(9) -9, A -2 for the Participant's age on the Participant's birthday for that
year. If the Participant's age is less than age 70, the distribution period is 27.4 plus the
number of years that the Participant's age is less than age 70. The Account Balance for
this calculation (other than the final installment payment) is the Account Balance as of
the end of the year prior to the year for which the distribution is being calculated;
(c) Partial lump -sum payment of a designated amount, with the balance payable in
installment payments for a period of years, as described in subsection (b);
(d) Annuity payments (payable on a monthly, quarterly, or annual basis) for the lifetime of
the Participant or for the lifetimes of the Participant and Beneficiary in compliance with
Code §401(a)(9); or
(e) Such other forms of installment payments as may be approved by the Employer
consistent with the requirements of Code §401(a)(9).
5.08 Default Distribution Option In the absence of an effective election by the Participant as to the
commencement and/or form of benefits, distributions shall be made in accordance with the
applicable requirements of Code §§ 401(a)(9) and 457(d), and final Treasury regulations
thereunder. In the absence of an effective election by the Beneficiary or Alternate Payee as to
the commencement and/or form of benefits, distribution shall be made in a lump sum.
5.09 Limitations on Distribution Options. Notwithstanding any other provision of this Article V,
Plan distributions shall satisfy the requirements of this section 5.09.
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(a) No distribution option may be selected by a payee under this Article V unless it satisfies
the applicable requirements of Code § §401(a)(9) and 457(d), and final Treasury
regulations thereunder.
(b) The terms of this Article V shall be construed in accordance with all applicable Code
sections.
5.10 Eligible Rollover Distributions.
(a) General. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit an election under this section, a Participant, the surviving spouse of a
Participant (or a Participant's former spouse who is the alternate payee under a
qualified domestic relations order as defined in Code §414(p)) (herein collectively
called "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 in a direct rollover.
(b) Definitions. For purposes of this section, the following definitions shall apply.
(1) 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 (10) years
or more; any distribution to the extent such distribution is required under Code
§401(a)(9); any deemed distribution under the provisions of Code §72(p); the
portion of any distribution that is not includable in gross income; any
distribution of excess deferrals; and any distribution on account of an
Unforeseeable Emergency.
(2) Eligible Retirement Plan. An eligible retirement plan is an individual
retirement account described in Code §408(a), an individual retirement annuity
described in Code §408(b), an annuity plan described in Code §403(a) that
accepts the distributee's eligible rollover distribution, a qualified trust
described in Code §401(a) (including §401(k)) that accepts the distributee's
eligible rollover distribution, a tax - sheltered annuity described in Code §403(b)
that accepts the distributee's eligible rollover distribution, or another eligible
deferred compensation plan described in Code §457(b) that accepts the
distributee's eligible rollover distribution.
(3) Distributee. A distributee includes an Employee or former Employee, 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
2005 Model 457(b) Plan Document 20
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Qualified Domestic Relations Order, as defined in Code §414(p), are
distributees with regard to the interest of the spouse or former spouse.
(4) Direct Rollover. A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
5.11 Elections. Elections under this section shall be made in such form and manner as the
Administrator may specify from time to time. To the extent permitted by and in accordance
with the Code, any irrevocable elections as to the form or timing of distributions executed prior
to January 1, 2002, are hereby revoked.
5.12 Practices and Procedures. The Employer or Plan Administrator may adopt practices and
procedures applicable to existing and new distribution elections.
5.13 Taxation of Distributions. To the extent required by law, income and other taxes shall be
withheld from each benefit payment and payments shall be reported to the appropriate
governmental agency or agencies.
VI. ROLLOVERS AND TRANSFERS
6.01 Eligible Rollover Contributions to Plan.
(a) If so specified in section H. of the Adoption Agreement, and only to the extent so
specified, a Participant who is an Employee and who is entitled to receive an eligible
rollover distribution from another eligible retirement plan may request to have all or a
portion of the eligible rollover distribution paid to the Plan. The Administrator may
require such documentation from the distributing plan as it deems necessary to effectuate
the rollover in accordance with Code §402 and to confirm that such plan is an eligible
retirement plan within the meaning of Code §402(c)(8)(B).
(b) For purposes of section 6.01(a), an eligible rollover distribution means any distribution
of all or any portion of a Participant's benefit under another eligible retirement plan,
except that an eligible rollover distribution does not include (1) any installment payment
for a period of 10 years or more, (2) any distribution made as a result of an
unforeseeable emergency or other distribution which is made upon hardship of the
employee, (3) any deemed distribution under the provisions of Code §72(p), (4) the
portion of any distribution that is not includable in gross income, (5) any distribution of
excess deferrals or (6) for any other distribution, the portion, if any, of the distribution
that is a required minimum distribution under Code §401(a)(9). In addition, an eligible
retirement plan means an individual retirement account described in Code §408(a), an
individual retirement annuity described in Code §408(b), a qualified trust described in
Code §401(a), an annuity plan described in Code § §403(a) or 403(b), or an eligible
governmental plan described in Code §457(b), that accepts the eligible rollover
distribution.
2005 Model 457(b) Plan Document 21
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3
(c) The Plan shall establish and maintain for the Participant a separate account for any
eligible rollover distribution paid to the Plan from any eligible retirement plan that is
not an eligible governmental plan under Code §457(b). In addition, the Plan shall
establish and maintain for the Participant a separate account for any eligible rollover
distribution paid to the Plan from any eligible governmental plan under Code §457(b).
6.02 Plan -to -Plan Transfers to the Plan. At the direction of the Employer, the Administrator may
permit a class of Participants who are participants in another eligible governmental plan under
Code §457(b) to transfer assets to the Plan as provided in this section 6.02. Such a transfer is
permitted only if the other plan provides for the direct transfer of each Participant's interest
therein to the Plan. The Administrator may require in its sole discretion that the transfer be in
cash or other property acceptable to the Administrator. The Administrator may require such
documentation from the other plan as it deems necessary to effectuate the transfer in accordance
with Code §457(e)(10) and Treasury Reg. § 1.457 -10(b) and to confirm that the other plan is an
eligible governmental plan as defined in Reg. § 1.457 -2(f). The amount so transferred shall be
credited to the Participant's Account Balance and shall be held, accounted for, administered and
otherwise treated in the same manner as an Annual Deferral by the Participant under the Plan,
except that the transferred amount shall not be considered an Annual Deferral under the Plan in
determining the maximum deferral under Article III.
6.03 Plan -to -Plan Transfers from the Plan.
(a) At the direction of the Employer, the Administrator may permit a class of Participants
and Beneficiaries to elect to have all or any portion of their Account Balance
transferred to another eligible governmental plan within the meaning of Code §457(b)
and Reg. § 1.457 -2(f). An in- service transfer is permitted under this section only if the
Participant is transferring to another eligible governmental plan maintained by
Employer. In all other circumstances, a transfer is permitted under this section 6.03(a)
for a Participant only if the Participant has had a Severance from Employment with the
Employer and is an employee of the entity that maintains the other eligible governmental
plan. Further, a transfer is permitted under this section 6.03(a) only if the other eligible
governmental plan provides for the acceptance of plan-to-plan transfers with respect to
the Participants and Beneficiaries and for each Participant and Beneficiary to have an
amount deferred under the other plan immediately after the transfer at least equal to the
amount transferred.
(b) Upon the transfer of assets under this section 6.03, the Plan's liability to pay benefits to
the Participant or Beneficiary under this Plan shall be discharged to the extent of the
amount so transferred for the Participant or Beneficiary. The Administrator may require
such documentation from the receiving plan as it deems appropriate or necessary to
comply with this section 6.03 (for example, to confirm that the receiving plan is an
eligible governmental plan under paragraph (a) of this section 6.03, and to assure that
the transfer is permitted under the receiving plan) or to effectuate the transfer pursuant to
Reg. §1.457- 10(b).
6.04 Permissive Service Credit Transfers.
2005 Model 457(b) Plan Document 22
for Governmental Employers
35
(a) If a Participant is also a participant in a tax - qualified defined benefit governmental plan
(as defined in Code §414(d)) that provides for the acceptance of plan -to -plan transfers
with respect to the Participant, then the Participant may elect to have any portion of the
Participant's Account Balance transferred to the defined benefit governmental plan. A
transfer under this section 6.04(a) may be made before the Participant has had a
Severance from Employment.
(b) A transfer may be made under section 6.04(a) if the transfer is either for the purchase of
permissive service credit (as defined in Code §415(n)(3)(A)) under the receiving
defined benefit governmental plan or a repayment to which Code §415 does not apply
by reason of Code §415(k)(3), or as otherwise allowed by the Internal Revenue
Service.
VII. CREATION OF TRUST AND TRUST FUND
7.01 Trust Fund. All amounts of Annual Deferrals, all property and rights purchased with such
amounts, and all income attributable to such amounts, property, or rights shall be held and
invested in the Trust Fund in accordance with this Plan and the Trust Agreement. The Trust
Fund, and any subtrust established under the Plan, shall be established pursuant to a written
agreement that constitutes a valid trust under applicable state law. The Trustee shall ensure that
all investments, amounts, property, and rights held under the Trust Fund are held for the
exclusive benefit of Participants and their Beneficiaries. The Trust Fund shall be held in trust
pursuant to the Trust Agreement for the exclusive benefit of Participants and their Beneficiaries
and defraying reasonable expenses of the Plan and of the Trust Fund. It shall be impossible,
prior to the satisfaction of all liabilities with respect to Participants and their Beneficiaries, for
any part of the assets and income of the Trust Fund to be used for, or diverted to, purposes other
than for the exclusive benefit of Participants and their Beneficiaries.
The trust requirement of Code §457(g) may be satisfied by a trust agreement, a custodial
agreement or the annuity contract, if any. The trust requirement shall be satisfied in the manner
specified in the Adoption Agreement. If so elected in the Adoption Agreement, the Employer or
certain employees of (or holders of certain positions with) the Employer shall be named as
Trustee in the Adoption Agreement and Plan assets shall be set aside in trust pursuant to this
Article VII.
If the Employer does not elect to self - trustee the Plan, the Employer must elect one of the
following options in the Adoption Agreement:
(a) Plan assets will be set aside in trust pursuant to a separate written trust agreement
entered into between the Employer and the bank or trust company named as Trustee
named in the Adoption Agreement. The Employer shall enter into a separate written
trust agreement with the Trustee.
2005 Model 457(b) Plan Document - 23
for Governmental Employers
KIM
(b) Plan assets shall be set aside in one or more annuity contracts issued by an insurance
company qualified to do business in the state where the contract is issued. The owner
of the annuity contract is the "deemed trustee" of the assets invested under the contract
for purposes of Code §457(g).
(c) Plan assets shall be set aside in one or more custodial accounts described in Code
§401(f) with the bank or trust company named in the Adoption Agreement as Custodian
and "deemed trustee" for purposes of Code §457(g). The Employer shall enter into a
separate written custodial agreement with the Custodian.
7.02 Establishment of Trust. The Employer or named Employees of Employer (or certain
holders of positions with the Employer) named in the Adoption Agreement shall serve as under
a Trust hereby created to hold all of the assets of the Plan for the exclusive benefit of
Participants and Beneficiaries. The Trust shall consist of all contributions made under the Plan
and the investment earnings thereon. All contributions and the earnings thereon less payments
made under the terms of the Plan, including fees and expenses, shall constitute the Trust. Except
to the extent that the Employer enters into a separate written trust agreement with a bank or trust
company Trustee, the assets in Trust shall be administered as provided in this document.
7.03 Appointment and Temvnation of Trustee. A Trustee may be named by the Employer and
may be a Participant. The Trustee shall remain in office at the will of the Employer and may be
removed from office at any time by the Employer, with or without cause. Such removal shall be
effective upon delivery of written notice to the Trustee or at such later time as may be
designated in such notice; provided that any such notice of removal shall take effect no sooner
than thirty (30) days and no later than sixty (60) days after the delivery thereof, unless such
thirty (30) or sixty (60) day period shall be waived. The Trustee may resign at any time upon
giving written notice to the Employer or at such later time as may be designated in the notice of
resignation; provided that (a) any such notice of resignation shall take effect no sooner than
thirty (30) days and no later than sixty (60) days after the delivery thereof, unless such thirty
(30) day or sixty (60) day period shall be waived and (b) upon such resignation or removal the
Employer shall have the power and the duty to designate and appoint a successor Trustee, and
the actual appointment of a successor Trustee is a condition that must be fulfilled before the
resignation or removal of the Trustee shall become effective.
Upon appointment, the successor Trustee shall have all the rights, powers, privileges, liabilities
and duties of the predecessor Trustee. The Trustee so resigned or removed shall take any and
all action necessary to vest the rights, powers, privileges, liabilities and duties of the
Administrator in his, her or its successor.
7.04 Acceptance. By signing the Adoption Agreement the Trustee accepts the Trust created under
the Plan and agrees to perform the obligations imposed.
7.05 Control of Plan Assets. The assets of the Trust or evidence of ownership shall be held by
the Trustee, under the terms of the Plan and under either this Article VII or under the separate
written trust agreement with a bank or trust company. If the assets represent amounts
transferred from a former plan, the Trustee shall not be responsible for the propriety of any
investment under the former plan.
2005 Model 457(b) Plan Document 24
for Governmental Employers
3�
7.06 General Duties of the Trustee. The Employer or named individuals in the employ of the
Employer named as Trustee(s) in the Adoption Agreement shall be responsible for the
administration of investments held in the Plan. The Trustee's duties shall include:
(a) receiving contributions under the terms of the Plan;
(b) making distributions from Plan assets held in Trust in accordance with written
instructions received from an authorized representative of the Employer;
(c) keeping accurate records reflecting its administration of the Trust assets and making
such records available to the Employer for review and audit. Within ninety (90) days
after each Plan Year, and within ninety (90) days after its removal or resignation, the
Trustee shall file with the Employer an accounting of its administration of the Trust
assets during such year or from the end of the preceding Plan Year to the date of
removal or resignation. Such accounting shall include a statement of cash receipts and
disbursements since the date of its last accounting and shall contain an asset list
showing the fair market value of investments held in the Trust as of the end of the Plan
Year.
The value of marketable investments shall be determined using the most recent price quoted on
a national securities exchange or over the counter market. The value of non - marketable
investments shall be determined in the sole judgment of the Trustee which determination shall
be binding and conclusive. The value of investments in securities or obligations of the
Employer in which there is no market shall be determined in the sole judgment of the Employer
and the Trustee shall have no responsibility with respect to the valuation of such assets. The
Employer shall review the Trustee's accounting and notify the Trustee in the event of its
disapproval of the report within ninety (90) days, providing the Trustee with a written
description of the items in question. The Trustee shall have sixty (60) days to provide the
Employer with a written explanation of the items in question; and
(d) employing such agents, attorneys or other professionals as the Trustee may deem
necessary or advisable in the performance of its duties.
The Trustee's duties shall be limited to those described above. The Employer shall be
responsible for any other administrative duties required under the Plan or by applicable law.
7.07 Investment Powers of the Trustee. The Trustee shall implement an investment program
based on the Employer's investment objectives. If either the Employer or the Employee fails to
issue investment directions as provided in sections 6.01 and 6.02, the Trustee shall have
authority to invest the Trust assets in its sole discretion. In addition to powers given by law,
the Trustee may:
(s; invest the Trust assets in any form of property, including common and preferred stocks,
exchange and trade put and call options, bonds, money market instruments, mutual funds
(including Trust assets for which the Trustee or its affiliates serve as investment
advisor), Treasury bills, deposits at reasonable rates of interest at banking institutions
including but not limited to savings accounts and certificates of deposit, and other fors
2005 Model 457(b) Plan Document 25
for Governmental Employers
W1 ON
of securities or investment of any kind, class, or character whatsoever, or in any other
property, real or personal, having a ready market;
(b) invest and reinvest all or any part of the Trust assets in any insurance policies or other
contracts with insurance companies including but not limited to individual or group
annuity, deposit administration, and guaranteed interest contracts. Such contracts shall
be held in the name of the Trustee;
(c) transfer any assets of the Trust to any group or common, collective or commingled fund
that is maintained by a bank or other institution that is established to permit the pooling
of assets of separate Trusts so long as such fund is available to §457 plans;
(d) hold cash uninvested and deposit same with any banking or savings institution at
reasonable interest;
(e) join in or oppose the reorganization, recapitalization, consolidation, sale or merger of
corporations or properties, including those in which it is interested as a Trustee, upon
such terms as it deems wise;
(f) hold investments in nominee or bearer form;
(g) to vote or refrain from voting any stocks, bonds, or other securities held in the Trust, to
exercise any other right appurtenant to any securities or other property held in the Trust,
to vote or refrain from voting proxies;
(h) exercise all ownership rights with respect to assets held in the Trust; and
(i) do any and all other acts that may be deemed necessary in the performance of the
Trustee's duties hereunder.
7.08 Trustee Fees and Expenses. All reasonable costs, charges and expenses incurred by the
Trustee in connection with the administration of the Trust assets (including fees for legal
services rendered to the Trustee) may be paid by the Employer, but if not paid by the Employer
when due, shall be paid from the Trust. Such reasonable compensation to a bank or trust
company Trustee as may be agreed upon from time to time between the Employer and the
Trustee may be paid by the Employer, but if not paid by the Employer when due shall be paid
by the Trust. The Trustee shall have the right to liquidate Trust assets to cover its fees.
Notwithstanding the foregoing, no compensation other than reimbursement for expenses shall be
paid to a Trustee who is the Employer or a full -time Employee. in the event any part of the
Trust assets become subject to tax, all taxes incurred shall be paid from the Trust unless the
Administrator advises the Trustee not to pay such tax.
7.09 Exclusive Benefit Rules. No part of the Trust assets shall be used for, or diverted to,
purposes other than for the exclusive benefit of Participants, former Participants with a interest
in the Plan, and the Beneficiary or Beneficiaries of a deceased Participant having an interest in
the Trust assets at the death of the Participant.
7.10 Trustee Actions. Every action taken by the Trustee shall be presumed to be a fair and
reasonable exercise of the authority vested in or the duties imposed upon him, her, or it. The
Trustee shall be deemed to have exercised reasonable care, diligence and prudence and to have
acted impartially as to all persons interested, unless the contrary be proven by affirmative
2005 Model 457(b) Plan Document 26
for Governmental Employers q
�Q
evidence The Trustee shall not be liable for amounts of Compensation deferred by
Participants or for other amounts payable under the Plan.
7.11 Delegation. Subject to any applicable laws and any approvals required by the Employer, the
Trustee may delegate any or all powers and duties hereunder to another person, persons, or
entity, and may pay reasonable compensation for such services as an administrative expense of
the Plan, to the extent such compensation is not otherwise paid.
7.12 Division of Duties and Indemnification.
(a) The Trustee shall have the authority and discretion to manage and govern the Trust
assets to the extent provided in this instrument, but does not guarantee the Trust in any
manner against investment loss or depreciation in asset value, or guarantee the adequacy
of the Trust assets to meet and discharge all or any liabilities of the Plan.
(b) The Trustee shall not be liable for the making, retention or sale of any investment or
reinvestment made by it, as herein provided, or for any loss to, or diminution of the
Trust assets or for any other loss or damage which may result from the dischame of its
duties hereunder except to the extent it is judicially determined that the Trustee nas
failed to exercise the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character with like aims.
(c) The Employer warrants that all directions issued to the Trustee by it or the
Administrator shall be in accordance with the terms of the Plan and not contrary to the
provisions of the Code.
(d) The Trustee shall not be answerable for any action taken pursuant to any direction,
consent, certificate, or other paper or document on the belief that the same is genuine
and signed by the proper person. All directions by the Employer or the Administrator
shall be in writing from the authorized individual or individuals named in the Adoption
Agreement.
(e) The duties and obligations of the Trustee shall be limited to those expressly imposed
upon it by this instrument or subsequently agreed upon by the parties. Responsibility for
administrative duties required under the Plan or applicable law not expressly imposed
upon or agreed to by the Trustee shall rest solely with the Employer.
(f) The Trustee shall be indemnified and held harmless by the Employer from and against
any and all liability to which the Trustee may be subjected, including all expenses
reasonably incurred in its defense, for any action or failure to act resulting from
compliance with the instructions of the Employer, the employees or agents of the
Employer, the Administrator, or any other fiduciary to the Plan, and for any liability
arising from the actions or inactions of any predecessor Trustee, custodian or other
fiduciaries of the Plan.
(g) The Trustee shall not be responsible in any way for the application of any payments it is
directed to make or for the adequacy of the Trust assets to meet and discharge any and
all liabilities under the Plan.
2005 Model 457(b) Plan Document 27
for Governmental Employers
VIII. INVESTMENTS
8.01 Investment Options. Employer shall have the sole discretion to select one or more investment
options to be offered under the Plan. These investment options may include specified life
insurance policies, annuity contracts, or investment media issued by an insurance company. It
shall be the sole responsibility of the Employer to ensure that all investment options offered
under the Plan are appropriate and in compliance with any and all state laws pertaining to such
investments.
8.02 Participant Investment Direction. If the Employer chooses to designate one or more
investment options in which Participants may direct investment of their Account(s), Participants
shall have the option to direct the investment of their Account(s) from among the investment
options designated by the Employer. The Participant's right to transfer among or out of any
such investment options shall be subject to any timing or other restrictions imposed upon
Participants by the providers of the investment options chosen by the Participant, including, but
not limited to market - timing restrictions, excessive trading restrictions and redemption fees.
The Trustee or Custodian, as applicable, shall hold title to such investment options. A
Participant's right to direct the investment of Account balances shall apply only to making
selections among the options made available under the Plan and only to the extent specified by
the Employer pursuant to uniform rules. The terms of this paragraph, including any trading
restrictions or fees, shall also apply to Beneficiary and Alternate Payee accounts.
(a) Each Participant shall designate on the form prescribed by the Administrator the one or
more investment options in which he or she wishes to have his Account invested and
may change such investment directions in accordance with and at the time or times
specified under uniform rules established by the Administrator or the investment
provider, as applicable. The Participant's Account shall be debited or credited as
appropriate to reflect all gains or losses on such investments. If a Participant has the
right to direct the investment of his Account but does not provide such direction
pursuant to uniform rules established by Employer, the Participant's Account shall be
invested in the investment option selected by the Plan.
(b) Neither the Employer, the Administrator, the Trustee, the Custodian nor any other
person shall be liable for any loss incurred by virtue of following the Participant's
directions or by reason of any reasonable administrative delay in implementing such
directions.
(c) The Employer may from time to time change the investment options made available
under the Plan pursuant to uniform Hiles established by the Administrator. If the
Employer eliminates an investment option, all Participants who had chosen that
investment option shall select another option. If the Participant does not select a new
option, money remaining in the eliminated investment option shall be reinvested at the
direction of the Employer. The Participants shall have no right to require the Employer
to select or retain any investment option. Any change with respect to investment options
2005 Model 457(b) Plan Document 28
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X11
made by the Employer or a Participant, however, shall be subject to the terms and
conditions (including any rules or procedural requirements) of the affected investment
options.
8.03 Emnlover Investment Direction.
(a) To the extent the Employer chooses not to allow Participant direction of the investment
of his or her Account, the Employer shall have the right to direct the Trustee or
Custodian with respect to investments of the Trust assets, may appoint an investment
manager to direct investments or may give the Trustee sole investment management
responsibility. The Employer or investment manager shall make any investment
directive in writing. Such instructions regarding the delegation of investment
responsibility shall remain in force until revoked or amended in writing. The Trustee
shall not be responsible for the propriety of any investment made at the direction of the
Employer or an investment manager and shall not be required to consult with or advise
the Employer regarding the investment quality of any directed investment held
hereunder. In the absence of such written directive, the Trustee shall automatically
invest the available cash in its discretion in an appropriate interim investment until
specific investment directions are received.
(b) If the Employer fails to direct the investment of Trust assets or name an investment
manager, and the Trustee or Custodian do not have investment authority, the
Administrator shall have full investment authority.
8.04 Participant Accounts. The Administrator shall maintain or cause to be maintained one
or more individual accounts for each Participant. Such accounts shall include separate
accounts, as necessary, for Code §457 Deferred Compensation, Code §457 rollovers, IRA
rollovers, other qualified plan and Code §403(b) plan rollovers, and such other accounts as
may be appropriate from time -to -time for plan administration. At regular intervals established
by the Administrator, each Participant's account(s) shall be credited with the amount of any
Deferred Compensation paid into the Trust; debited with any applicable administrative or
investment expense, including, but not limited to, fees charged to Participants, allocated on a
reasonable and consistent basis; credited or debited with investment gain or loss, as
appropriate; and debited with the amount of any distribution. Each Participant shall be notified
in writing of the balance in his Account at least once a year.
13L ADMINISTRATION
9.01 Administrator. Employer shall be the Administrator unless another person or persons is
appointed by the Employer in section A. of the Adoption Agreement pursuant to section 1.02.
9.02 Awointment and Termination of Administrator. An Administrator may be named in section
A. of the Adoption Agreement by the Employer and maybe a Participant. The Administrator
shall remain in office at the will of the Employer and may be removed from office at any time
by the Employer, with or without cause. Such removal shall be effective upon delivery of
2005 Model 457(b) Plan Document 29
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�a
written notice to the Administrator or at such later time as may be designated in such notice;
provided that any such notice of removal shall take effect no later than sixty (60) days after the
delivery thereof, unless such sixty (60) day period shall be waived. The Administrator may
resign at any time upon giving written notice to the Employer or at such later time as may be
designated in the notice of resignation provided that; (a) any such notice of resignation shall
take effect no later than sixty (60) days after the delivery thereof, unless such sixty (60) day
period shall be waived; and (b) upon such resignation or removal the Employer shall have the
power and the duty to designate and appoint a successor Administrator, and the actual
appointment of a successor Administrator is a condition that must be fulfilled before the
resignation or removal of the Administrator shall become effective. Upon appointment, the
successor Administrator shall have all the rights, powers, privileges, liabilities and duties of
the predecessor Administrator. The Administrator so resigned or removed shall take any and
all action necessary to vest the rights, powers, privileges, liabilities and duties of the
Administrator in the successor.
9.03 Duties of Administrator. Subject to any applicable laws and any approvals required by the
Employer, the Administrator shall have full power and authority to adopt rules, regulations and
procedures for the administration of the Plan, and to interpret, alter, amend, or revoke any rules,
regulations or procedures so adopted. The Administrator's duties shall include:
(a) appointing the Plan's attorney, accountant, actuary, custodian or any other party needed
to administer the Plan or the Plan assets;
(b) directing the Trustee or Custodian with respect to payments from the Plan assets held in
Trust;
(c) communicating with Employees regarding their participation and benefits under the
Plan, including the administration of all claims procedures;
(d) filing any returns and reports with the Internal Revenue Service or any other
governmental agency;
(e) reviewing and approving any financial reports, investment reviews, or other reports
prepared by any party appointed under paragraph'(a);
(f) establishing a funding policy and investment objectives consistent with the purposes of
the Plan; and
(g) construing and resolving any question of Plan interpretation. The Administrator's
interpretation of Plan provisions including eligibility and benefits under the Plan is
final.
9.04 Administrative Fees and Expenses. All reasonable costs, charges and expenses incurred by
the Administrator in connection with the administration of the Plan (including fees for legal
services rendered to the Administrator) may be paid by the Employer, but if not paid by the
Employer when due, shall be paid from Plan assets. Such reasonable compensation to the
2005 Model 457(b) Plan Document 30
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'�3
Administrator as may be agreed upon from time to time between the Employer and
Administrator may be paid by the Employer, but if not paid by the Employer when due shall be
paid from Plan assets. Notwithstanding the foregoing, no compensation other than
reimbursement for expenses shall be paid to an administrator who is the Employer or a fiill-
time Employee of the Employer. In the event any part of the assets in the Plan become subject
to tax, all taxes incurred shall be paid from the Plan assets unless the Administrator instructs the
Trustee or Custodian not to pay such tax.
9.05 Actions of Administrator. Every action taken by the Administrator shall be presumed to be
a fair and reasonable exercise of the authority vested in or the duties imposed upon him, her, or
it. The Administrator shall be deemed to have exercised reasonable care, diligence and
prudence and to have acted impartially as to all persons interested, unless the contrary be
proven by affirmative evidence. The Administrator shall not be liable for amounts of
Compensation deferred by Participants or for other amounts payable under the Plan.
9.06 Delegation. Subject to any applicable laws and any approvals required by the Employer, the
Administrator may delegate any or all powers and duties hereunder to another person, persons,
or entity, and may pay reasonable compensation for such services as an administrative expense
of the Plan, to the extent such compensation is not otherwise paid.
9.07 Investment and Service Providers. Any company which issues policies, contracts, or
investment media to the Employer or in respect of a Participant is not a party to this Plan and
such company shall have no responsibility, accountability, or liability to the Employer, the
Administrator, any Participant, or any Beneficiary with regard to the operation or adequacy of
this Plan, including any future amendments made thereto.
X. LEAVE OF ABSENCE
10.01 Paid Leave of Absence. If a Participant is on an approved leave of absence from the
Employer with Compensation, or on approved leave of absence without Compensation that
does not constitute a Severance from Employment, which under the Employer's current
practices is generally a leave of absence without Compensation for a period of one year or less,
said Participant's participation in the Plan may continue.
10.02 Unpaid Leave of Absence. If a Participant is on an approved leave of absence without
Compensation and such leave of absence continues to such an extent that it becomes a
Severance from Employment, said Participant shall have separated from service with the
Employer for purposes of this Plan. Upon termination of leave without pay and return to active
status, the Participant may enter into a new Participation Agreement to be effective when
permitted by section 2.10.
XL AMENDMENT OR TERMINATION OF PLAN
2005 Model 457(b) Plan Document 31
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1 1
11.01 Termination. The Employer may at any time terminate this Plan; provided, however, that no
termination shall affect the amount of benefits, which at the time of such termination shall have
accrued for Participants or Beneficiaries. Such accrued benefit shall include any Compensation
deferred before the time of the termination and income thereon accrued to the date of the
termination. Such amount shall be calculated in accordance with section 8.04 and the terms and
conditions of the affected investment option. Upon such termination, each Participant in the
Plan shall be deemed to have revoked his agreement to defer future Compensation as provided
in section 2.09 as of the date of such termination and section 2.03(b) shall no longer be in
effect. Each Participant's full Compensation on a nondeferred basis shall be restored. Upon
plan termination, all amounts deferred will be distributed to Participants or Beneficiaries as
soon as administratively practicable after the termination date.
11.02 Amendment. The Employer may amend the provisions of this Plan at anytime; provided,
however, that no amendment shall affect the amount of benefits which at the time of such
amendment shall have accrued for Participants or Beneficiaries, to the extent of Compensation
deferred before the time of the amendment and income thereon accrued to the date of the
amendment, calculated in accordance with section 8.04 and the terms and conditions of the
investment options hereunder; and provided further, that no amendment shall affect the duties
and responsibilities of the Trustee or Custodian unless executed by the Trustee or Custodian.
To the extent permitted by applicable law, the Employer delegates to the Administrator the
authority to adopt rules, regulations or procedures from time to time as may be necessary or
desirable to conform Plan provisions to, or to elaborate Plan provisions in light of, technical
amendments to the Code, Treasury regulations or other guidance issued under the Code, and
such rules, regulations or procedures are hereby ratified by the Employer as having the force
and effect of Plan amendments.
11.03 Copies of Amendments. The Administrator shall provide a copy of any Plan amendment
to any Trustee or custodian and to the issuers of any investment options selected pursuant to
section 8.01.
XIL TAX TREATMENT OF AMOUNTS CONTRIBUTED
It is intended that pursuant to Code §457, the Amount Deferred shall not be considered current
compensation for purposes of federal income taxation. This rule shall also apply to state income
taxation unless applicable state laws provide otherwise. Such amounts shall, however, be included
as compensation to the extent required under the Federal Insurance Contributions Act (FICA).
Payments under this Plan shall supplement retirement and death benefits payable under the
Employer's group insurance and retirement plans, if any.
X11L NON- ASSIGNABILI
2005 Model 457(b) Plan Document 32
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13.01 Non - Assignability. Except as provided in sections 13.02 and 13.03, the interests of each
Participant or Beneficiary under the plan are not subject to the claims of the Participant's or.
Beneficiary's creditors, and neither the Participant nor any Beneficiary shall have any right to
sell, assign, transfer, or otherwise convey the right to receive any payments hereunder or any
interest under the Plan, which payments and interest are expressly declared to be non -
assignable and non - transferable.
13.02 Oualified Domestic Relations Orders. If so specified in the Adoption Agreement,
domestic relations orders approved by the Administrator shall be administered as follows.
(a) Notwithstanding section 13.0 1, if a final judgment, decree, or order (including approval
of a property settlement) that is related to the provision of child support, alimony
payments, or the marital property rights of a spouse or former spouse, child, or other
dependent of a Participant (herein called an Alternate Payee) is made pursuant to the
domestic relations law of any State and meets the requirements of Code §414(p), then
such order shall be referred to as a Qualified Domestic Relations Order ( "QDRO "). If
a QDRO is duly filed upon the Employer, then the amount of the Participant's Account
Balance shall be paid to or set aside in a separate account for Alternate Payee(s) as
elected by the Alternate Payee. Payments to the Alternate Payee shall be made without
regard to whether the Participant is eligible for a distribution of benefits under the Plan.
The Administrator shall establish reasonable procedures for determining the status of
any such decree or order and for effectuating distribution pursuant to the QDRO and
may charge the Participant and Alternate Payee a fee as established from time to time.
Where necessary to carry out the terns of such a QDRO, a separate account shall be
established with respect to the Alternate Payee(s) and such person shall be entitled to
make investment selections with respect thereto in the same manner as the Participant,
except to the extent restricted by the employer or a specific investment option under the
plan. All costs and charges incurred in carrying out the investment selection shall be
deducted from the account created for the spouse, former spouse, or child making the
investment selection. The Alternate Payee may select from among the forms of payment
available to Participants except a joint and survivor annuity naming the Alternate Payee
and a subsequent spouse. Withholding and income tax reporting shall be done with
respect to the alternate payee under the terms of the Code as amended from time to time.
(b) The Employer's liability to pay benefits to a Participant shall be reduced to the extent
that amounts have been paid or set aside for payment to a spouse, former spouse or
child pursuant to this section. No amount shall be paid or set aside unless the
Employer, or its agents or assigns, has been provided with satisfactory evidence
releasing them from any further claim by the Participant with respect to these amounts.
The Participant shall be deemed to have released the Employer from any claim with
respect to such amounts in any case in which the Employer has been notified of or
otherwise joined in a proceeding relating to a QDRO which sets aside a portion of the
Participant's account for a spouse, former spouse or child, and the Participant fails to
obtain an order of the court in the proceeding relieving the Employer from the obligation
to comply with the QDRO.
2005 Model 457(b) Plan Document 33
for Governmental Employers 11
VJ
(c) The Employer shall not be obligated to comply with any judgment, decree or order that
attempts to require the Plan to violate any Plan provision or any provision of Code
§457. Neither the Employer nor its agents or assigns shall be obligated to defend
against or set aside any judgment, decree, or order described herein or any legal order
relating to the division of a Participant's benefits under the Plan unless the full expense
of such legal action is bome by the Participant. In the event that the Participant's action
(or inaction) nonetheless causes the Employer, its agents or assigns to incur such
expense, the amount of the expense may be charged against the Participant's account and
thereby reduce Employer's obligation to pay benefits to the Participant. In the course of
any proceeding relating to divorce, separation, or child support, the Employer, its
agents and assigns shall be authorized to disclose information relating to Participant's
individual account to the Participant's spouse, former spouse or child (including the
legal representatives of the spouse, former spouse or child), or to a court.
2005 Model 457(b) Plan Document 34
for Governmental Employers I�
"1�
13.03 IRS Lew. Notwithstanding section 13.01, the Administrator may pay from a Participant's
or Beneficiary's Account Balance the amount that the Administrator finds is lawfully demanded
under a levy issued by the Internal Revenue Service with respect to that participant or
Beneficiary or is sought to be collected by the United States Government under a judgment
resulting from an unpaid tax assessment against the Participant or Beneficiary.
13.04 Mistaken Contributions. If any contribution (or any portion of a contribution) is made to
the Plan by a good faith mistake of fact, then within one year after the payment of the
contribution, and upon receipt in good order of a proper request approved by the Administrator,
the amount of the mistaken contributions (adjusted for any income or loss in value, if any,
allocable thereto) shall be returned directly to the Participant or, to the extent required or
permitted by the Administrator, to the Employer.
13.05 Payments to Minors and Incompetents. To the extent the Employer or Administrator
determines that the following procedure meets applicable state or local law, if a Participant or
Beneficiary entitled to receive any benefits hereunder is a minor or is adjudged to be legally
incapable of giving valid receipt and discharge for such benefits, benefits will be paid to such
person as the Administrator may designate for the benefit of such Participant or Beneficiary.
Such payments shall be considered a payment to such Participant or Beneficiary and shall, to
the extent made, be deemed a complete discharge of any liability for such payments under the
Plan.
13.06 Procedure When Distributee Cannot Be Located. The Administrator shall make all
reasonable attempts to determine the identity and address of a participant or a Participant's
Beneficiary entitled to benefits under the Plan. For this purpose, a reasonable attempt means
(a) the mailing by certified mail of a notice to the last known address shown on the Employer's
or Administrator's records, (b) notification sent to the Social Security Administration, Internal
Revenue Service or the Pension Benefit Guaranty Corporation (under their program to identify
payees under retirement plans), and (c) the payee has not responded within six (6) months. If
the Administrator is unable to locate such a person entitled to benefits hereunder, or if there has
been no claim made for such benefits, the trust fund shall continue to hold the benefits due such
person until in the Employer's or Administrator's sole discretion, the Plan is required to take
other action under applicable law except that if, in the Adoption Agreement, the Plan elected
mandatory distributions greater than $1,000, then the Administrator will pay the distribution for
such person in a direct rollover to an individual retirement plan designated by the plan
administrator.
MV. DISCLAIMER
The Employer and the Administrator make no endorsement, guarantee or any other representation and
shall not be liable to the Plan or to any Participant, Beneficiary, or any other person with respect to
(a) the financial soundness, investment performance, fitness, or suitability (for meeting a Participant's
objectives, future obligations under the Plan, or any other purpose) of any investment option offered
pursuant to section 8.01 or any investment vehicle in which amounts deferred under the Plan are
actually invested, or (b) the tax consequences of the Plan to any Participant, Beneficiary or any other
person.
2005 Model 457(b) Plan Document l
for Governmental Employers 46
XV. EMPLOYER PARTICIPATION
Notwithstanding any other provisions of this Plan, the Employer may contribute additional amounts
into the Plan on behalf of any Participant, so long as the total amount contributed by the Employer
when added to the Annual Deferral made by the Participant does not exceed the maximum deferral
permitted by Article III for the calendar year. The amount of such Employer contribution and the
Employees or independent contractors eligible to receive such contributions shall be detailed in an
amendment attached to this Plan document. Such Employer contributions shall be wages for services
rendered by the Participant to the Employer during the payroll period contributed.
11i /J
16.01 Governing Law. This Plan shall be construed under the laws of the state in which the
Employer's headquarters are located.
16.02 457. This Plan is intended to be an eligible deferred compensation plan within the meaning
of Code §457, and shall be interpreted so as to be consistent with such section and all
regulations promulgated thereunder.
16.03 Word Usage. Words used herein in the singular shall include the plural and the plural the
singular where applicable, and one gender shall include the other genders where appropriate.
16.04 Headings. The headings of sections, sections or other subdivisions hereof are included
solely for convenience of reference, and if there is any conflict between such headings and the
text of the Plan, the text shall control.
16.05 Entire Agreement This Plan, the executed Adoption Agreement and any properly adopted
amendment thereof, shall constitute the total agreement or contract between the Employer and
the Participant regarding the Plan. No oral statement regarding the Plan may be relied upon by
the Participant. This Plan and any properly adopted amendment, shall be binding on the parties
hereto and their respective heirs, administrators, Trustees, successors, and assigns and on all
designated Beneficiaries of the Participant.
2005 Model 457(b) Plan Document 2
for Governmental Employers �n