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Home My WebLink About7 Pension Plan Documents Agenda Item # Memorandum To: Board of Directors From: Peter Holzmeister Date: February 1, 2002 Subject: Pension plan documents The TDPUD Board of Directors are the Trustees of the District's defined benefit pension plan, which provides a retirement benefit to our union employees. Attached are documents submitted to the District by Ron Richardson of the Wayne Richardson Company. The Wayne Richardson Company administers our employee defined benefit pension plan. We struggle regularly to understand the details of the pension plan. The pension field is highly regulated by federal law. Federal law is interpreted by the Internal Revenue Service which issues regulations regarding pension plans. We then employ the Richardson Company to tell us what the IRS rules mean. The Richardson Company employs consultants to draft pension plan documents that have been reviewed and qualified by the IRS so that the money we deposit into the pension plan trust fund is legal and tax exempt. The attached documents relate to the above described regulatory process. In essence, federal law regarding pension plans has changed several times during the past few years. However, our basic pension plan document has not changed to reflect new law. The reason is that the IRS is slow to interpret federal law and issue regulations. In the interim we have signed various forms saying that we will comply with law as soon as we know how to, and that has satisfied the IRS. The IRS has now issued regulations. Apparently the IRS is saying that we must adopt new documents by February 28, 2002 if we intend to use a pre-approved, so-called prototype documents. If we do not act by February 28 we will be required to submit customized documents that we must pay someone to prepare for our specific plan. This sounds expensive. The Richardson Company has chosen for use by its clients a set of plan documents prepared by Attleberry/Searle, Inc, and is asking us to express our intent to use that set of documents for our pension plan. By executing the attached certifications we are committing to the IRS that we will use the pre-approved prototype plan, thus coming into immediate compliance with IRS regulations. Hence our pension plan remains legal and tax exempt. The problem is we do not have a copy of the Attleberry/Searle documents. If I had the documents and read them I would not understand them; pension documents are esoteric. I will attempt to have Ron Richardson attend the meeting to better explain this entire matter. RECOMMENDATION: It is my recommendation that the Board authorize execution of the documents, I think. (We sign under penalty of perjury) RED` 0 20 WAYNE RICHARDSON COMPANY, INC. — Administrators & Consultants January 21, 2002 Peter Holzmeister, General Manager Truckee-Donner Public Utility District P O Box 309 Truckee, CA 96160-0309 Subject: Restatement of Pension, Profit Sharing, and 401k Retirement Plan Documents tiN 'CJ C�Ji. Please sign, date and return the enclosed "CERTIFICATION UNDER IRS REVENUE PROCEDURE 2000-20". A stamped envelope has been provided for your convenience. During the 1990's, four laws were passed by Congress which combined, changed a significant portion of the retirement plan requirements under the Internal Revenue Code. The acronym for this collection of laws is GUST. While the IRS was slowly developing regulations and modifications to comply with all these changes, retirement plans were expected to comply with these laws in "good faith", even though the document wording changes weren't completed by the IRS until mid 2000. Although the documents we provided from National Pension contained "good faith" amendments for most of these laws, or have been amended in "good faith", the final requirements of the Internal Revenue Code and Regulations require the restatement of all tax-qualified retirement plans in order to have continued tax-exempt qualification. Some document designers view the world through the eyes of professional administrators who need and want every possible too] at their disposal to correct minor problems for their customers at the least possible cost and inconvenience. For the same reason, these documents also offer plan sponsors the most flexibility to select provisions that make plan management easier, and reduce potential out-of-pocket costs. Other document designers view the world through the lowest possible denominator because their administrators don't have the technical expertise (or time)(or desire) to fix difficult problems, and because their customers wouldn't know the difference:anyway. 2277 gait Avenue, Suite 101 - Sacramento CA 95825 (916) 483-9202 Fax 483-9204 It is because of our desire to have every tool available to serve you that after an extensive review of available documents, we have decided to use Pension Publications of Denver (PPD) prototype documents sponsored by Atteberry/Searle, hic., and volume submitter documents sponsored by SunGard Corbel, Inc.. PPD/SunGard is regarded as the leading designer of plan documents, and was one of the very first to have all of their various document designs pre-approved by the IRS. Most of our plans have been using National Pension documents, Lincoln Life is the next most common document, and finally there are a fair number of plans which have come on board with documents from third-party administrators, insurance companies, and payroll services. Note: Employers who have recently decided to terminate their plans will need to restate their plans to bring them into compliance with federal laws at the time of termination— this is a requirement under the Internal Revenue Code. Note: A few Employers sponsor money purchase plans as second plans that will be combined with the lead profit sharing plan in the restatement process; however to obtain an extension in the time (beyond February 28) to accomplish that, a "CERTIFICATION" must be completed. In addition to developing the next generation of plan documents, the IRS has also changed many of the "ground rules" for plans. Eliminating the necessity of a determination letter for some, and requiring, but easing the determination letter process and cost for others. One of these changes is the requirement that plans must elect, not later than February 28, 2002, which document package they will utilize for the restatement of their plan document. The enclosed "CERTIFICATION" complies with that requirement. Please call me with any questions you may have about the enclosed certification, or the restatement of your organization's retirement plan. With warm personal regards, A Ron Richardson President CERTIFICATION UNDER IRS REVENUE PROCEDURE 2000-20 TO BE COMPLETED BY THE EMPLOYER: I, (representative of the Employer) hereby certify under penalty of perjury that Truckee-Donner Public Utility District intends to adopt the prototype plan sponsored by Atteberry/Searle, Incorporated once it has been approved by the Internal Revenue Service, and that I make this certification on the date set for below for the purpose of extending the remedial amendment period under Section 401(b)- 1 of the Income Tax Regulations pursuant to section 19.03 of Rev. Proc. 2000-20. X Signature and Title Date Signed Employer: Truckee-Donner Public Utility District Address: P O Box 309 Truckee, CA 96160-0309 EIN: 94-6001449 TO BE COMPLETED BY ATTEBERRY/SEARLE INCORPORATED I, Stacey Atteberry, (representative of prototype Sponsor) hereby certify under penalty of perjury that Atteberry/S earl e, Incorporated received the above certification and that such certification was made under the circumstances described in section 19.03 of Rev. Proc. 2000-20. Stacey Atteberry, President Date Signed Sponsor Name: Atteberry/Searle, Incorporated Address: 915 University Avenue, Sacramento CA 95825 EIN: 68-0082549 CERTIFICATION UNDER IRS REVENUE PROCEDURE 2000-20 TO BE COMPLETED BY SUNGARD CORBEL INC. I, Michele Lellouche, J.D., as a representative of SunGard Corbel Inc.,hereby certify that this certification form is being executed under the circumstances described in section 1��9..03��jjof///Rev. Prr/oc..//2000-20. /�(2h:Ct 4 /V L(�Yt�c 6/21/01 Signature Date Signed Michele Lellouche,J.D. Assistant General Counsel SunGard Corbel Inc. 1660 Prudential Drive Jacksonville, FL 32207 EIN: 59-1894343 TO BE COMPLETED BY THE EMPLOYER: 1, (representative of the Employer) hereby certify under penalty of perjury that Truckee-Donner Public Utility District intends to adopt a volume submitter plan sponsored by SunGard Corbel, Inc. once it has been approved by the Internal Revenue Service, and that I make this certification on the date set for below for the purpose of extending the remedial amendment period under Section 401(b)-1 of the Income Tax Regulations pursuant to section 19.03 of Rev. Proc. 2000-20. X Signature and Title Date Signed Employer: Truckee-Donner Public Utility District Address: P O Box 309 Truckee, CA 96160-0309 EIN: 94-6001449