HomeMy WebLinkAboutRES 1984-39 - Board :c
RESOLUTION NO. 84 39
OF THE
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
ESTABLISHING A DEFERRED COMPENSATION PLAN
WHEREAS, the Truckee Donner Public Utility District has employees
rendering valuable services; and
WHEREAS, the establishment of a deferred compensation plan for such
employees will serve the interests of the District by enabling it to pro-
vide reasonable retirement security for its employees, by providing in-
creased flexibility in its personnel management system, and by assisting
in the attraction and retention of competent personnel; and
WHEREAS, the District has determined that the establishment of a de-
ferred compensation plan to be administered by the ICMA Retirement Corpora-
tion will serve the above objectives; I and
WHEREAS, the District desires that the investment of funds held under
its deferred compensation plan be administered by the ICMA Retirement Cor-
poration, as Trustee, with the understanding that such funds will be held
by the ICMA Retirement Trust, a trust established by public employers for
the purpose of representing the interests of such employers with respect to
the collective investment of funds held under their deferred compensation
plans;
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Truckee
Donner Public Utility District as follows:
1. The deferred compensation plan, attached hereto as Appendix A,
is hereby adopted, and ICMA Retirement Corporation is appoint-
ed to serve as administrator thereunder.
2. The President of the Board is hereby authorized to execute the
ICMA Retirement Trust, attached hereto as Appendix B.
3. The District hereby adopts the trust agreement, attached here-
to as Appendix C, and appoints the ICMA Retirement Corporation
as Trustee thereunder, and directs the ICMA Retirement Corpor-
ation, as Trustee, to invest all funds held under the deferred
compensation plan through the ICMA Retirement Trust as soon as
is practicable.
4. The General Manag^r of the Truckee Donner Public Utility Dis-
trict shall be the coordinator for this program and shall re-
ceive necessary reports, notices, etc. from the ICMA Retirement
Corporation as Administrator, and shall cast, on behalf of the
District, any required votes under the program. Administrative
duties to carry out the plan may be assigned to the appropriate
departme4.nts.
PASSED AND ADOPTED by the Boa'•rd of Directors of the Truckee Donner Public
Utility District at a regular meeting duly called and held within said District
on the 18th day of June 1984, by the following roll call vote:
AYES: Cooley, Corbett, Duffy and Maass.
NOES: None.
ABSENT: Hamilton.
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
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Ses A. Maass, President
ATTEST, '
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Susan M. Craig, Deputy District Clerk
APPENDIX A
("EMPLOYER")
~ DEFERRED COMPENSATION, PLAN
1. INTRODUCTION include any amount excludable from gross income under this
The Employer hereby establishes the Employer's Deferred Plan or any other plan described in section 457(b) of the
Compensation Plan,hereinafter referred to as the"Plan."The Plan Internal Revenue Code,any amount excludable from gross
consists of the provisions set forth in this document. income under section 403(b) of the Internal Revenue Code,
The primary purpose of this Plan is to provide retirement income or any other amount excludable from gross income for
and other deferred benefits to the Employees of the Employer in federal income tax purposes. Includible Compensation shall
accordance with the provisions of section 457 of the Internal be determined without regard to any community property
Revenue Code of 1954, as amended. laws.
This Plan shall be an agreement solely between the Employer 2.07 Joinder Agreement: An agreement entered into between an
and participating Employees. Employee and the Employer, including any amendments or
modifications thereof. Such agreement shall fix the amount
li. DEFINITIONS of Deferred Compensation, specify a preference among the
Account: The bookkeeping account maintained for each investment alternatives designated by the Employer,
2.01 Accou P 9 designate the Employee's Beneficiary or Beneficiaries, and
Participant reflecting the cumulative amount of the incorporate the terms,conditions,and provisions of the Plan
Participant's Deferred Compensation,including any income,
gains, losses, or increases or decreases in market value by reference.
attributable to the Employer's investment of the Participant's 2.08 Normal Compensation:The amount of compensation which
Deferred Compensation,and further reflecting any distribu- would be payable to a Participant by the Employer for a
tions to the Participant or the Participant's Beneficiary and taxable year if no Joinder Agreement were in effect to defer
any fees or expenses charged against such Participant's compensation under this Plan.
Deferred Compensation. 2.09 Normal Retirement Age:Age 70, unless the Participant has
2.02 Administrator: The person or persons named to carry out elected an alternate Normal Retirement Age by written
certain nondiscretionary administrative functions under the instrument delivered to the Administrator prior to Separation
Plan, as hereinafter described. The Employer may remove from Service. A Participant's Normal Retirement Age
any person as Administrator upon 60 days advance notice in determines (a) the latest time when benefits may commence
writing to such person, in which case the Employer shall under this Plan (unless the Participant continues employ-
name another person or persons to act as Administrator.The ment after Normal Retirement Age),and(b)the period during
Administrator may resign upon 60 days advance notice in which a Participant may utilize the catch-up limitation of
writingto the Employer,in which the case the Employer shall Section 5.02 hereunder.once a Participant has to any extent
name another person or persons to act as Administrator. utilized the catch-up limitation of Section 5.02, his Normal
Retirement Age may not be changed.
2.03 Beneficiary: The person or persons designated by the A Participant's alternate Normal Retirement Age may not
Participant in his Joinder Agreement who shall receive any be earlier than the earliest date that the Participant will
benefits payable hereunder in the event of the Participant's become eligible to retire and receive unreduced retirement
death. I _ benefits under the Employer's basic retirement plan covering
2.04 Deferred Compensation:The amount of Normal Compensa- the Participant and may not be later than the date the
tion otherwise payable to the Participant which the Participant attains age 70. If a Participant continues
Participant and the Employer mutually agree to defer employment after attaining age 70, not having previously
hereunder,any amount credited to a Participant's Account by elected an alternate Normal Retirement Age,the Participant's
reason of a transfer under Section 6.03,or any other amount alternate Normal Retirement Age shall not be later than the
which the Employer agrees to credit to a Participant's mandatory retirement age, if any, established by the
Account. Employer, or the age at which the Participant actually
separates from service if the Employer has no mandatory
2.05 Employee: Any individual who provides services for the retirement age. If the Participant will not become eligible to
Employer,whether as an employee of the Employer or as an independent contractor,and who has been designated by the receive benefits under a basic retirement plan maintained by Employer as eligible to participate in the Plan. the Employer,the Participant's alternate Normal Retirement
Age may not be earlier than attainment of age 55 and may not
2.06 Includible Compensation: The amount of an Employee's be later than attainment of age 70.
compensation from the Employer for a taxable year that is 2.10 Participant:Any Employee who has joined the Plan pursuant
attributable to services performed for the Employer and that to the requirements of Article IV.
is includible in the Employee's gross income for the taxable
year for federal income tax purposes; such term does not 2.11 Plan Year: The calendar year.
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2.12 Retirement: The first date upon which both of the following plan). For purposes of this Section 5.02, a Participant's
shall have occurred with respect to a Participant:Separation Includible Compensation for the current taxable year shall be
from Service and attainment of Normal Retirement Age. deemed to include any Deferred Compensation for the
2.13 Separation from Service: Severance of the Participant's taxable year in excess of the amount permitted under the
p Normal Limitation,and the Participant's Includible Compen-
employment with the Employer. A Participant shall be sation for any prior taxable year shall be deemed to exclude
deemed to have severed his employment with the Employer any amount that could have been deferred under the Normal
for purposes of this Plan when, in accordance with the
established practices of the Employer, the employment Limitation for such prior taxable year.
relationship is considered to have actually terminated.In the 5.03 Section 403(b)Annuities: For purposes of Sections 5.01 and
case of a Participant who is an independent contractor of the 5.02, amounts contributed by the Employer on behalf of a
Employer, Separation from Service shall be deemed to have Participant for the purchase of an annuity contract described
occurred when the Participant's contract under which in section 403(b) of the Internal Revenue Code shall be
services are performed has completely expired and treated as if such amounts constituted Deferred Compensa-
terminated, there is no foreseeable possibility that the tion under this Plan for the taxable year in which the
Employer will renew the contract or enter into a new contract contribution was made and shall thereby reduce the
for the Participant's services,and it is not anticipated that the maximum amount that may be deferred for such taxable year.
Participant will become an Employee of the Employer.
VI. INVESTMENTS AND ACCOUNT VALUES
III. ADMINISTRATION 6.01 Investment of Deferred Compensation: All investments of
3.01 Duties of Employer: Employer y to
:The Em to er shall have the authority Participants'Deferred Compensation made by the Employer,
including all property and rights purchased with such
make all discretionary decisions affecting the rights or amounts and all income attributable thereto,shall be the sole
benefits of Participants which may be required in the property of the Employer and shall not be held in trust for
administration of this Plan. Participants or as collateral security for the fulfillment of the
3.02 Duties of Administrator: The Administrator,as agent for the Employer's obligations under the Plan. Such property shall
Employer, shall perform nondiscretionary administrative be subject to the claims of general creditors of the Employer,
functions in connection with the Plan, including the and no Participant or Beneficiary shall have any vested
maintenance of Participants' Accounts, the provision of interest or secured or preferred position with respect to such
periodic reports of the status of each Account and the property or have any claim against the Employer except as a
disbursement of benefits on behalf of the Employer in general creditor.
accordance with the provisions of this Plan.
6.02 Crediting of Accounts:The Participant's Account shall reflect
the amount and value of the investments or other property
IV. PARTICIPATION IN THE PLAN obtained by the Employer through the investment of the
Participant's Deferred Compensation. It is anticipated that
4.01 Initial Participation:An Employee may become a Participant by entering into a Joinder Agreement prior to the beginning the Employer's investments with respect to a Participant will
conform to the investment preference specified in the
of the calendar month in which the Joinder Agreement is to
,, Participant's Joinder Agreement,but nothing herein shall be
become effective to defer compensation not yet earned. construed to require the Employer to make any particular
4.02 Amendment of Joinder Agreement:A Participant may amend investment of a Participant's Deferred Compensation. Each
an executed Joinder Agreement to change the amount of Participant shall receive periodic reports,not less frequently
compensation not yet earned which is to be deferred than annually, showing the then-current value of his
(including the reduction of such future deferrals to zero)or to Account.
change his investment preference (subject to such restric-
tions as may result from the nature or terms of any investment 6.03 Acceptance of Transfers:Pursuant to an appropriate written
made by the Employer). Such amendment shall become agreement, the Employer may accept and credit to a
effective as of the beginning of the calendar month Participant's Account amounts transferred from another
commencing after the date the amendment is executed. A employer within the same State representing amounts held
Participant may at any time amend his Joinder Agreement to by such other employer under an eligible State deferred
µ
change the-designated Beneficiary and such amendment compensation plan described in section 457 of the Internal
shall become effective immediately. Revenue Code. Any such transferred amount shall not be
treated as a deferral subject to the limitations of Article V,
V. LIMITATIONS ON DEFERRALS provided however, that the actual amount of any deferral
Limitation: Except as provided in Section 5.02, the under the plan from which the transfer is made shall be taken
5.01 NormalP P into account in computing the catch-up limitation under
maximum amount of Deferred Compensation for any
Participant for any taxable year shall not exceed the lesser of Section 5.02.
$7,500.00 or 33 1/3 percent of the Participant's Includible 6.04 Employer Liability:In no event shall the Employer's liability to
Compensation for the taxable year. This limitation will pay benefits to a Participant under Article VI exceed the value
ordinarily be equivalent to the lesser of $7,500.00 or 25 of the amounts credited to the Participant's Account; the
percent of the Participant's Normal Compensation. Employer shall not be liable for losses arising from
5.02 Catch-up Limitation: For each of the last three (3) taxable depreciation or shrinkage in the value 0f any investments
years of a Participant ending before his attainment of Normal acquired under this Plan.
Retirement Age, the maximum amount of Deferred
i
Compensation shall be the lesser of: (1) $15,000 or (2) the VII. BENEFITS
sum of(i)the Normal Limitation for the taxable year,and(ii)
that portion of the Normal Limitation for each of the prior 7.01 Retirement benefits and Election on Separation from
taxable years of the Participant commencing after 1978 Service: Except as otherwise provided in this Article VII,the
during which the Plan w-'s �n existence and the Participant distribution of a Participants Account shall commence
was eligible to participate in the Plan (or in any other plan during the second calendar month after the close of the Plan
established under section 457 of the Internal Revenue Code Year of the Participant's Retirement,and the distribution of
t, an employer within the same State as the Employer) less such Retirement benefits shall be made in accordance with
the amount of Deferred Compensation for each such prior one of the payment options described in Section 7.02.
taxable year (including amounts deferred under such other Notwithstanding the foregoing, the Participant may irrevo-
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cably elect within 60 days following Separation from Service Sections 7.01 or 7.'06,a death benefit equal to the value of the
to have the distribution of benefits commence on a date other Participant's Account shall be payable to the Beneficiary
,,than that described in the preceding sentence which is at commencing no later than 60 days after the close of the Plan
least 60 days after the date such election is delivered in Year in which the Participant would have attained Normal
writing to the Employer and forwarded to the Administrator Retirement Age. Such death benefit shall be paid in a lump
but not later than 60 days after the close of the Plan Year of sum unless the Beneficiary elects a different payment option
the Participant's Retirement. within 90 days of the Participant's death.A Beneficiary who
7.02 Payment Options:As provided'in Sections 7.1.01,7.05 and 7.06, may elect a payment option pursuant to the provisions of the
a Participant may elect to have the value of his Account preceding sentence shall be treated as if he were Participant
distributed in accordance with one of the following payment for purposes of determining the payment options available
options, provided that such option is consistent with the under Section 7.02; provided, however, that the payment
limitations set forth in Section 7.03: option chosen by the Beneficiary must provide for payments
to the Beneficiary over a period no longer than the life
(a) Equal monthly, quarterly, semi-annual or annual expectancy of the Beneficiary if the Beneficiary is the
payments in an amount chosen by the Participant, Participant's spouse and must provide for payments over a
continuing until his Account is exhausted; period not in excess of fifteen (15)years if the Beneficiary is
(b) One lump sum pa.,me'nt; not the Participant's spouse.
(c) Approximate) equal month) 7.06 Disability:In the event a Participant becomes disabled before
y q y, quarterly, semi-annual the commencement of Retirement benefits
or annual payments, calculated to continue for a period a is under Section
7.01, the Participant may elect to commence benefits under
pertain chosen by the Participant', one of the payment options described in Section 7.02 on the
(d) Payments equal to payments made by the issuer of a last day of the month following a determination of disability
retirement annuity policy acquired by the Employer; by the Employer. The Participant's request for such
(e) An other payment option elected by the Participant determination must be made within a reasonable time after
y the impairment which constitutes the disability occurs. A
and agreed to by the Employer. Participant shall be considered disabled for of this
purposes
A Participant's election of a payment option must be made at Plan if he is unable to engage in any substantial gainful
least 30 days before the payment of benefits is to commence. activity by reason of any medically determinable physical or
jIf a Participant fails to make a timely election of a payment mental impairment which can be expected to result in death
option,benefits shall be paid monthly under option(c)above or be of long-continued and indefinite duration. The
for a period of five years. disability of any Participant shall be determined in
7.03 Limitation on Options: No payment option may be selected accordance with uniform principles consistently applied and
by the Participant under Section 7.02 unless the present value upon the basis of such medical evidence-as the Employer
of the payments to the Participant,determined as of the date deems necessary and desirable.
benefits commence, exceeds 50 percent of.the value of the 7.07 Unforeseeable Emergencies: In the event an unforeseeable
Participant's Account as of the date benefits commence. emergency occurs,a Participant may apply to the Employer
Present value determinations under this Section shall.be to receive that part of the value of his account that is
made by the Administrator in accordance with the expected reasonably needed to satisfy the emergency need.If such an
return multiples set forth in section 1.72-9 of the Federal application is approved by the Employer,the Participant shall
Income Tax Regulations(or any successor provision to such be paid only such amount as the Employer deems necessary
regulations). to meet the emergency need,but payment shall not be made
to the extent that the financial hardship may be relieved
7.04 Post-retirement Death Benefits: Should the Participant die through cessation of deferral under the Plan, insurance or
after he has begun to receive benefits under a payment other reimbursement, or liquidation of other assets to the
option, the remaining payments, if any, under the payment extent such liquidation would not itself cause severe financial
option shall be payable to the Participant's Beneficiary hardship. An unforeseeable emergency shall be deemed to
commencing within 60 days after the Administrator receives involve only circumstances of severe financial hardship to the
proof of the Participant's death,unless the Beneficiary elects Participant resulting from a sudden and unexpected illness or
payment under a different payment option at least 30 days accident of the Participant or of a dependent (as defined in
prior to the date that the first payment becomes payable to section 152(a) of the Internal Revenue Code) of the
the Beneficiary, In no event shall the Employer or Participant,loss of the Participant's property due to casualty,
Administrator be liable to the Beneficiary for the amount of or other similar and extraordinary unforeseeable ci►cum-
any payment made in the name of the Participant before the stances arising as a result of events beyond the control of the
Administrator receives proof of death of the Participant. Participant.The need to send a Participant's child to college
Notwithstanding the foregoing, payments to a Beneficiary or to purchase a new home shall not be considered
shall not extend over a period longer than(i)the Beneficiary's unforeseeable emergencies. The determination as to
life expectancy if the Beneficiary is the Participant's spouse whether such an unforeseeable emergency exists shall be
or (ii) fifteen (15) years if the Beneficiary is not the based on the merits of each individual case.
Participant's spouse. If no Beneficiary is designated in the
Joinder Agreement,or if the designated Beneficiary does not
survive the Participant for a period of fifteen (15) days,then Vlll. NON-ASSIGNABILITY
the commuted value of any remaining payments under the No Participant or Beneficiary shall have any right to commute,
payment option shall be paid in a lump sum to the estate of sell,assign,pledge,transfer or otherwise convey or encumber the
the Participant. If the designated Beneficiary survives the right to receive any payments hereunder, which payments and
Participant for a period of fifteen (15) days, but does not rights are expressly declared to be non-assignable and non-
continue to live for the remaining period of payments under transferable.
the payment option (as modified,if necessary,in conformity
with the third sentence of this section),then the commuted IX, RELATIONSHIP TO OTHER PLANS AND EMPLOYMENT
value of any remaining payments under the payment option AGREEMENTS
shall be paid in a lump sum to the estate of the Beneficiary. This Plan serves in addition to any other retirement,pension,or
benefit plan or system presently in existence or hereinafter
7.05 Pre-retirement Death Benefits: Should the Participant die established for the benefit of the Employer's employees, and
before he has begun to receive the benefits provided by participation hereunder shall not affect benefits receivable under
3
any such plan or system. Nothing contained in this Plan shall be period, the Employer notifies the Administrator in writing that it
deemed to constitute an employment contract or agreement disapproves such amendment, in which case such amendment
between any Participant and the Employer or to give any shall not become effective. In the event of such disapproval, the
Participant the right to be retained in the employ of the Employer. Administrator shall be under no obligation to continue acting as
Nor shall anything herein be construed to modify the terms of any Administrator hereunder.
employment contract or agreement between a Participant and the No amendment or termination of the Plan shall divest any
Employer. Participant of any rights with respect to compensation deferred
before the date of the amendment or termination.
X. AMENDMENT OR TERMINATION OF PLAN X1. APPLICABLE LAW
The Employer may at any time amend this Plan provided that it This Plan shall be construed under the laws of the state where
transmits such amendment in writing to the Administrator at least the Employer is located and is established with the intent that it
30 days prior to the effective date of the amendment.The consent meet the requirements of an"eligible State deferred compensation
of the Administrator shall not be required in order for such plan"under section 457 of the Internal Revenue Code of 1954,as
amendment to become effective, but the Administrator shall be amended.The provisions of this Flan shall be interpreted wherever
under no obligation to continue acting as Administrator hereunder possible in conformity with the requirements of that section.
if it disapproves of such amendment. The Employer may at any
time terminate this Plan. X11. GENDER AND NUMBER
The Administrator may at any time propose an amendment to
the Plan by an instrument in writing transmitted to the Employer at The masculine pronoun,whenever used herein,shall include the
least 30 days before the effective date of the amendment. Such feminine pronoun,and the singular shall include the plural,except
amendment shall become effective unless, within such 30-day where the context requires otherwise.
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z 9 APPENDIX B
DECLARATION OF TRUST
of
ICMA RETIREMENT TRUST
ARTICLE 1. Name and Definitions ARTICLE 11. Creation and Purpose of the Trust;Ownership of Trust
Property
SECTION 1.1. Name. The Name of the Trust created hereby is the SECTION 2.1. Creation. The Retirement Trust is created and
ICMA Retirement Trust. established by the execution of this Declaration of Trust by the Trustees
SECTION 1.2. Definitions. Wherever they are used herein, the and the participating Public Employers.
following terms shall have the following respective meanings: SECTION 2.2. Purpose. The purpose of the Retirement Trust is to
(a) By-Laws. The By-Laws referred to in Section 4.1 hereof, as provide for the commingled investment of funds held by the Public
amended from time to time. Employers in connection with their Deferred Compensation Plans.The
n.A deferred compensation plan Trust Property shall be invested in the Portfolios, in Guaranteed
(b} Deferred Compensation Pla p established and maintained by a Public Employer for the purpose Investment Contracts and in other investments recommended by the
of providing retirement incom
e and other deferred benefits to its Investment Adviser under the supervision of the Board of Trustees.
employees in accordance with the provisions of section 457 of SECTION 2.3 Ownership of Trust Property.The Trustees shall have
the Internal Revenue Code of 1954. as amended. legal title to the Trust Property. The Public Employers shall be the
(c) Guar
anteed investment Contract.A contract entered into by beneficial owners of the Trust Property.
the Retirement Trust with insurance companies that provides for
a guaranteed rate of return on investments made pursuant to
such contract. ARTICLE 111. Trustees
( )
d ICMA. The International City Management Association. SECTION 3.1. Number and Qualification of Trustees.
ICMA/RC Trustees. Those Trustees elected by the Public (a) The Board of Trustees shall consist of nine Trustees.Five of
(e)Employers who, in accordance with the provisions of Section the Trustees shall be full-time employees of a Public Employer
3.1 a hereof,are also members of the Board of Directors of ICMA (the Public Employee Trustees) who are authorized by such
( )or RC. Public Employer to serve as Trustee.The remaining four Trustees
shall consist of two persons who, at the time of election to the
(f) Investment Adviser.The Investment Adviser that enters into a Board of Trustees, are members of the Board of Directors of
contract with the Retirement Trust to provide advice with respect ICMA and two persons who,at the time of election,are members
to investment of the Trust Property. of the Board of Directors of RC (the ICMA/RC Trustees).One of
(g) Employer Trust. A trust created pursuant to an agreement the Trustees who is a director of ICMA,and one of the Trustees
between RC and a Public Employer for the purpose of investing who is a director of RC,shall,at the time of election,be full-time
and administering the funds set aside by such employer in employees of a Public Employer.
connection with its deferred compensation agreements with its (b) No person may serve as a Trustee for more than one term in
employees. '
any ten-year period.
(h) Portfolios. The Portfolios of investments established by the SECTION 3.2. Election and Term.
Investment Adviser to the Retirement Trust, under the
supervision of the Trustees, for the purpose of providing (a) Except for the Trustees appointed to fill vacancies pursuant
investments for the Trust Property. to Section 3.5 hereof,the Trustees shall be elected by a vote of a
majority of the Public Employers in accordance with the
(i) Public Employee Trustees. Those Trustees elected by the procedures set forth in the By-Laws.
Public Employers who, in accordance with the provisions of
Section 3.1(a) hereof, are full-time employees of Public (b) At the first election of Trustees, three Trustees shall be
Employers. elected for a term of three years,three Trustees shall be elected
for a term of two years and three Trustees shall be elected or a
(j) Public Employer. A unit of state or local government,or any term of one year. At each subsequent election, three Trustees
agency or instrumentality thereof, that has adopted a Deferred shall be elected for a term of three years and until his or her
Compensation Plan and has executed this Declaration of Trust. successor is elected and qualified.
(k) RC. The International City Management Association SECTION 3.3. Nominations. The Trustees who are full-time
Retirement Corporation. employees of Public Employers shall serve as the Nominating
(1) Retirement Trust. The Trust created by this Declaration of Committee for the Public Employee Trustees, The Nominating
Trust. Committee shall choose candidates for Public Employee Trustees in
m Trust Property.The amounts held in the Retirement Trust on accordance with the procedures set forth in the By-Laws.
( }
behalf of the Public Employers.The Trust Property shall include SECTION 3.4. Resignation and Removal.
any income resulting from the investment of the amounts so held. (a) Any Trustee may resign as Trustee(without need for prior or
(n) Trustees. The Public Employee Trustees and ICMA/RC subsequent accounting)by an instrument in writing signed by the
Trustees electeu by the Public Employers to serve as members of Trustee and delivered to the other Trustees and such resignation
the Board of Trustees of the Retirement Trust. shall be effective upon such delivery,or at a later date according
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to the terms of the instrument. Any of the Trustees may be times show that all such investments are a part of the Trust
removed for cause, by a vote of a majority of the Public Property;
Employers. (h) make, execute, acknowledge, and deliver any and all
(b) Each Public Employee Trustee shall resign his or her position documents of transfer and conveyance and any and all other
as Trustee within sixty days of the date on which he or she ceases instruments that may be necessary or appropriate to carry out the
to be a full-time employee of a Public Employer. powers herein granted;
SECTION 3.5. Vacancies. The term of office of a Trustee shall (i) vote upon any stock,bonds,or other securities;give general
terminate and a vacancy shall occur in the event of the death, or special proxies or powers of attorney with or without power of
resignation, removal,adjudicated incompetence or other incapacity to substitution; exercise any conversion privileges, subscription
perform the duties of the office of a Trustee.In the case of a vacancy,the rights, or other options, and make any payments incidental
remaining Trustees shall appoint such person as they in their discretion thereto; oppose, or consent to, or otherwise participate in,
shall see fit (subject to the limitations set forth in this Section),to serve corporate reorganizations or other changes affecting corporate
for the unexpired portion of the term of the Trustee who has resigned or securities, and delegate discretionary powers, and pay any
otherwise ceased to be a Trustee.The appointment shall be made by a assessments or charges in connection therewith; and generally
.-written instrument signed by a majority of the Trustees. The person exercise any of the powers of an owner with respect to stocks,
appointed must be '-re same type of Trustee (i.e., Public Employee bonds, securities or other property held as part of the Trust
Trustee or ICMA/RC Trustee) as the-person who has ceased to be a Property;
Trustee. An appointment of a Trustee may be made in anticipation of a (j) enter into contracts or arrangements for goods or services
vacancy.to occur at a later date by reason of retirement or resignation, required in connection with the operation of the Retirement
provide that such appointment shall not become effective prior to such Trust,including,but not limited to,contracts with custodians and
retirement or resignation. Whenever a vacancy in the number of contracts for the provision of administrative services;
Trustees shall occur, until such vacancy is filled as provided in this (k) borrow or raise money for the purpose of the Retirement
Section 3.5,the Trustees in office,regardless of their number,shall have Trust in such amount,and upon such terms and conditions,as the
all the powers granted to the Trustees and shall discharge all the duties Trustees shall deem advisable, provided that the aggregate
imposed upon the Trustees by this Declaration. A written instrument amount of such borrowings shall not exceed 30%of the value of
certifying the existence of such vacancy signed by a majority of the the Trust Property. No person lending money to the Trustees
Trustees shall be conclusive evidence.of the existence of such vacancy. shall be bound to see the application of the money lent or to
SECTION 3.6. Trustees Serve in Representative Capacity. By inquire into its validity, expediency or propriety of any such
executing this Declaration,each Public Employer agrees that the Public borrowing;
Employee Trustees elected by the Public Employers are authorized to (1) incur reasonable expenses as required for the operation of the
act as agents and representatives of the Public Employers collectively. Retirement Trust and deduct such expenses from the Trust
Property;
ARTICLE IV. Powers of Trustees (m) pay expenses properly allocable to the Trust Property
SECTIC-.N 4.1. General Powers.The Trustees shall have the power to incurred in connection with the Deferred Compensation Plans or
conduct the business of the Trust and to carry on its operations.Such the Employer Trusts and deduct such expenses from that portion
power shall include, but shall not be limited to, the power to: of the Trust Property beneficially owned by the Public Employer
(a) receive the Trust Property from the Public Employers or from
to whom such expenses are properly allocable;
a Trustee of any Employer Trust; (n) pay out of the Trust Property all real and personal property
fib) enter into a contract with an Investment Adviser providing, taxes,income taxes and other taxes of any and all kinds which,in
among other things, for the establishment and operation of the the opinion of the Trustees, are properly levied, or assessed
Portfolios, selection of the Guaranteed investment Contracts in under existing or future laws upon, or �n respect of, the Trust
which the Trust Property may be invested, selection of other Property and allocate any such taxes to the appropriate accounts;
investments for the Trust Property and the payment of reasonable , (o) adopt,amend and repeal the By-Laws,provided that such By-
fees to the Investment Adviser and to any sub-investment adviser Laws are at all times consistent with the terms of this Declaration
retained by the Investment Adviser; of Trust;
(c) review annually the performance of the Investment Adviser (p) employ persons to make available interests in the Retirement
and approve annually the contract with such Investment Adviser; Trust to employers eligible to maintain a deferred compensation
plan under section 457 of the Internal Revenue Code, as
(d) invest and reinvest the Trust Property in the Portfolios, the amended;
Guaranteed Investment Contracts and in any other investment
recommended by the Investment Adviser, provided that�if a (q} issue the Annual Report of the Retirement Trust, and the
Public Employer has directed that its monies be invested in disclosure documents and other literature used by the
specified Portfolios or in a Guaranteed Investment Contract,the Retirement Trust;
Trustees of the Retirement Trust shall invest such monies in (r) make loans, including the purchase of debt obligations,
accordance with such directions: provided that all such loans shall bear interest at the current
(e) keep such portion of the Trust Property in cash or cash market rate;
balances as the Trustees,from time to time,may deem to be in the (s) contract for,and delegate any powers granted hereunder to,
best interest of the Retirement Trust created hereby, without such officers, agents,employees, auditors and attorneys as the
liability for interest thereon; Trustees may select,provided that the Trustees may not delegate
(f) accept and retain for such time as they may deem advisable the powers set forth in paragraphs(b),(c)and(o)of this Section
any securities or other property received or acquired by them as 4.1 and may not delegate any powers if such delegation would
Trustees hereunder, whether or not such securities or other violate their fiduciary duties;
property would normally be purchased as investments here- (t) provide for the indemnification of the officers and Trustees of
under; the Retirement Trust and purchase fiduciary insurance;
(g) cause any securities or other property held as part of the (u) maintain books and records,including separate accounts for
Trust Property to be registered in the name of the Retirement each Public Employer or Employer Trust and such additional
Trust or in the name of a nominee,and to hold any investments in separate accounts as are required under,and consistent with,the
bearer form,but the books and records of the Trustees shall at all Deferred Compensation Plan of each Public Employer; and
2
(v) do all such acts, take all such procevaings,and exercise all SECTION 5.3. Bonc,. ..o Trustee shall be obligated to give any bond
such rights and privileges, although not specifically mentioned or other security for the performance of any of his or her duties
herein, as the Trustees may deem necessary or appropriate to hereunder.
administer the Trust Property and to carry out the purposes of the
Retirement Trust. ARTICLE VI. Annual Repot to Shareholders
SECTION 4.2. Distribution of Trust Property. Distributions of the The Trustees shall annually submit to the Public Employers a written
Trust Property shall be made to,or on behalf of,the Public Employer,in report of the transactions of the Retirement Trust, including financial
accordance with the terms of the Deferred Compensation Plans or statements which shall be certified by independent public accountants
Employer Trusts. The Trustees of the Retirement Trust shall be fully chosen by the Trustees.
protected in making payments in accordance with the directions of the
Public Employers or the Trustees of the Employer Trusts without
ascertaining whether such payments are in compliance with the ARTICLE V11. Duration or Amendment of Retirement Trust
provisions of the Deferred Compensation Plans or the agreements
SECTION 7.1. Withdrawal.A Public Employer may,at any time,with-
creating the Employer Trusts.
draw from this Retirement Trust by delivering to the Board of Trustees a
SECTION 4.3. Execution of Instruments. The Trustees may statement to that effect.The withdrawing Public Employer's beneficial
unanimously designate any one or more of the Trustees to execute any interest in the Retirement Trust shall be paid out to the Public Employer
instrument or document on behalf of all,including but not limited to the or to the Trustee of the Employer Trust, as appropriate.
signing or endorsement of any check and the. signing of any
r contracts, and the action of such SECTION 7.2. Duration. The Retirement Trust shall continue until
applications, insurance and other
shall have the same force and effect as if terminated by the vote of a majority of the Public Employers, each
designated Trustee or Trustees
casting one vote. Upon termination, all of the Trust Property shall be
taken by all the Trustees.
paid out to the Public Employers or the Trustees of the Employer Trusts,
r and Liability of Trustees as appropriate.
ARTICLE V. Duty of Care y
f r SECTION 7.3. Amendment, The Retirement Trust may be amended
granted to the Trustees,the Trustees shall perform all acts within their
SECTION 5.1. Duty of Care. In exercising the powers herein be o e by the vote of a majority of the Public Employers,each casting one vote.
authority for the exclusive purpose of providing benefits for the Public SECTION 7.4. Procedure. A resolution to terminate or amend the
Employers, and shall perform such acts with the care, skill, prudence Retirement Trust or to remove a Trustee shall be submitted to a vote of
and diligence in the circumstances then prevailing that a prudent person the Public Employers if: (a)a majority of the Trustees so direct,or(b)a
acting in a like capacity and familiar with such matters would use in the petition requesting a vote, signed by not less than 25% of the Public
conduct of an enterprise of a like character and with like aims. Employers, is submitted to the Trustees.
SECTION 5.2. Liability. The Trustees shall not be liable for any
mistake of judgment or other action taken in good faith,and for any
action taken or omitted in reliance in good faith upon the books of ARTICLE Vlll. Miscellaneous
account or other records of the Retirement Trust,upon the opinion of, SECTION 8.1. Governing Law.Except as otherwise required by state
counsel, or upon reports made to the Retirement Trust by any of its or local law,this Declaration of Trust and the Retirement Trust hereby
officers,employees or agents or by the Investment Adviser or any sub- created shall be construed and regulated by the laws of the District of
investment adviser, accountants, appraisers or other experts or Columbia.
consultants selected with reasonable care by the Trustees,officers or
employees of the Retirement Trust.The Trustees shall also not be liable SECTION 8.2. Counterparts. This Declaration may be executed by
for any loss sustained by the Trust Property by reason of any investment the Public Employers and Trustees in two or more counterparts,each of
made in good faith and in accordance with the standard of care set forth which shall be deemed an original but all of which together shall
in Section 5.1. constitute one and the same instrument.
r
.r
3
i
ra
r.
j AMENDMENT TO THE DECLARATION
! OF TRUST (APPENDIX B)
� Approved by ICMA Retirement
Trust members,
November 30, 1983
ARTICLE Vill. Miscellaneous
SECTION 8.3. Notwithstanding any other provision
of this Declaration of Trust, until December 31, 1984,
unless such period is extended by the Trustees, the
Trust Property may, include amounts held by the
Retirement Trust on behalf of public employers that
have not executed the Declaration of Trust.
4/84
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APPENDIX C
TRUST AGREEMENT WITH
THE ICMA RETIREMENT CORPORATION
AGREEMENT made by and between the Employer named in the provided, however, that the Employer may direct investment by the
attached resolution and the International City Management Association Trustee among available investment alternatives in such proportions as
Retirement Corporation (hereinafter the "Trustee" or "Retirement the Employer authorizes in connection with its deferred compensation
Corporation"),a nonprofit corporation organized and existing under the agreements with its employees.For these purposes,these Trust Funds
laws of the State of Delaware,for the purpose of investing and otherwise may be commingled with Trust Funds set aside by other Employers
administering the funds set aside by Employers in connection with pursuant to the terms of the ICMA Retirement Trust.Investment powers
deferred compensation plans established under section 457 of the vested in the Trustee by the Section may be delegated by the Trustee to
Internal Revenue Code of 1954(the"Code").This Agreement shall take any bank, insurance or trust company, or any investment advisor,
effect upon acceptance by the Trustee of its appointment by the manager or agent selected by it.
Employer to serve as Trustee in accordance herewith as set forth in the
attached resolution.
Section 2.2. Administrative Powers of the Trustee.The Trustee shall
WHEREAS,the Employer has established a deferred compensation plan have the power in its discretion:
under section 457 of the Code (the "Plan")-, (a) To purchase, or subscribe for, any securities or other
WHEREAS, in order that there will be sufficient funds available to property and to retain the same in trust.
discharge the Employer's contractual obligations under the Plan, the
Employer desires to set aside periodically amounts equal to the amount (b) To sell, exchange, convey, transfer or otherwise dispose of
of compensation deferred; any securities or other property held by it,by private contract,or
WHEREAS,the funds set aside,together with any and all assetsderived at public auction. No person dealing with the Trustee shall be
from the investment thereof,are to be exclusively within the dominion, bound to see the application of the purchase money or to inquire
control"and ownership of the Employer, and subject to the Employer's into the validity, expediency, or propriety of any such sale or
absolute right of withdrawal, no employees having any interest other disposition.
whatsoever therein; (c) To vote upon any stacks, bonds" or other securities;to.give
NOW, THEREFORE, this Agreement witn�sseth that (a) the Employer general or special proxies or powers of attorney with or without
will pay monies to the Trust6se to be placed in deferred compensation Power of substitution; to exercise any conversion privileges,
accounts for the Employer: {b} the Trustee covenants that it will hold subscription rights,or other options,and to make any payments
said sums,and any other funds which it may receive hereunder,in trust incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes
for the uses and purposes and upon the terms and conditions
hereinafter stated; and (c) the parties hereto agree as follows: affecting corporate securities, and to delegate discretionary
powers, and to pay any assessments or charges in connection
ARTICLE i. General Duties of the Parties. therewith; and generally to exercise any of the powers of an
Section 1.1. General Duty of the Employer.The Employer shall make owner with respect to stocks,bonds,securities or other property
regular periodic payments equal to the amounts of its employees' held as part of the Trust Funds.
compensation which are deferred in accordance with the terms and (d) To cause any securities or other property held as part of the
conditions of the Plan to the extent that such amoL,nts are to be invested Trust Funds to be registered in its own name,and to hold any
under the Trust. investments in bearer form, but the books and records of the
Section 1.2, General Duties of the Trustee.The Trustee shall hold all Trustee shall at all times show that all such investments are a part
funds received by it hereunder, which, together with the income of the Trust Funds.
therefrom,shall constitute the Trust Funds. It shall administer the Trust '(e) To borrow or raise money for the purpose of the Trust in such
Funds,collect the income thereof,and make payments therefrom,all as amount,and upon such terms and conditions,as the Trustee shall
hereinafter provided.The Trustee shall also hold all Trust Funds which deem advisable; and, for any sum so borrowed, to issue its
are transferred to it as successor Trustee by the Employer from existing promissory note as Trustee,and to secure the repayment thereof
deferred compensation arrangements with its Employees under plans by pledging all,or any part,of the Trust Funds.No person lending
-=described in section 457 of the Code.Such Trust Funds shall be subject money to the Trustee shall be bound to see the application of the
-to all of the terms and provisions of this Agreement. money lent or to inquire into its validity,expediency or propriety
of any such borrowing.
ARTICLE il. Powers and Duties of the Trustee in Investment, (f) To keep such portion of the Trust Funds in cash or cash
Administration, and Disbursement of the Trust Funds. balances as the Trustee,from time to time,may deem to be in the
i
Secti�n 2.1. Investment Powers and Duties of the Trustee. The best interest of the Trust created hereby, without liability for
Trustee shall have the power to invest and reinvest the principal and interest thereon.
income of the Trust Funds and keep the Trust Funds invested,without (g) To accept and retain for such time as it may deem advisable
distinction between principal and income, in securities or in other any securities or other property received or acquired by it as
property, real or personal, wherever situated,including,but not limited Trustee hereunder, whether or not such securities or other
to, stocks, common or preferred, bonds, retirement annuity and property would normally be purchased as investment hereunder.
insurance policies, mortgages, and other evidences of indebtedness or (h) To make, execute, acknowledge, and deliver any and all
ownership, investment companies, common or group trust funds, or documents of transfer and conveyance and any and all other
separate and different types of funds'(including equity, fixed income) instruments that may be necessary or appropriate to carry out the
which fulfill requirements of state and local governmental laws, powers herein granted.
1
q
I
(i} To settle, compromise, or submit to arbitration any claims, When an account becomes an account stated,such account shall be
debts, or damages due or owing to or from the Trust Funds; to finally settled, and the Trustee shall be completely discharged and
commence or defend suits or legal or administrative proceedings; released,as if such account had been settled and allowed by a judgment
and to represent the Trust Funds in all suits and legal and or decree of a court of competent jurisdiction in an action or proceeding
administrative proceedings. in which the Trustee and the Employer were parties.
(j) To do all such acts,take all such proceedings,and exercise all The Trustee shall have the right to apply at any time to a court of
such rights ai id privileges, although not specifically mentioned competent jurisdiction for the judicial settlement of its account.
herein, as the Trustee may deem necessary to administer the
Trust Funds and to carry out the purposes of this Trust. ARTICLE V1. Resignation and Removal of Trustee.
Sect'�n 2.3. Distributions from the Trust Funds. The Employer Section 6.1. Resignation of Trustee. The Trustee may resign at any
hereby appoints the Trustee as its agent for the purpose of making time by filing with the Employer its written resignation.Such resignation
distributions from the Trust Funds. In this regard the terms and shall take effect sixty (60) days from the date of such filing and upon
conditions set forth in the Plan are to;.guide and control the Trustee's appointment of a successor pursuant to Section 6.3., whichever shall
power. first occur.
Section 2.4. Valuation of Trust Funds. At least once a year as of Section 6.2. Removal of Trustee. The Employer may remove the
Valuation Dates designated by the Trustee,the Trustee shall determine Trustee at any time by delivering to the Trustee a written notice of its
the value of the Trust Funds.Assets of the Trust Funds shall be valued at removal and-an appointment of a successor pursuant to Section 6.3.
their market values at the close of business on the Valuation Date,or,in Such removal shall not take effect prior to sixty (60) days from such
the absence of readily ascertainable market values as the Trustee shall delivery unless the Trustee agrees to an earlier effective date.
determine, in accordance with methods consistently followed and Section 6.3. Appointment of Successor Trustee.The appointment of
uniformly applied. a successor to the Trustee shall take effect upon the delivery to the
ARTICLE 111. For Protection of.Trustee. Trustee of (a) an instrument in writing executed by the Employer
Section 3.1. Evidence o c y Employer. may f Action b Em to er. The Trustee ref appointing such successor, and exonerating such successor from
y Y liability for the acts and omissions of its predecessor, and (b} an
upon any certificate,notice or direction purporting to have been signed acceptance in writing,executed by such successor.
on behai; of the Employer which the Trustee believes to have been
si y-ned by a duly designated official of the Employer,No communication All of the provisions set forth herein with respect to the Trustee shall
shall be binding upon any of the Trust Funds or Trustee until they are relate to each successor with the same force and effect as if such
received by the Trustee. successor had been originally named as Trustee hereunder.
Section 3.2. Advice of Counsel. The Trustee may consult with any If a successor is not appointed with sixty (60)days after the Trustee
legal counsel with respect to the construction of this Agreement, its gives notice of its resignation pursuant to Section 6.1.,the Trustee may
duties hereunder,or any act,which it proposes to take or omit,and shall apply to any court of competent jurisdiction for appointment of a
not De liable for any action taken or omitted in good faith pursuant to successor.
such advice. Section 6.4. Transfer of Funds to Successor.Upon the resignation or
Section 3.3. Miscellaneous.The Trustee shall use ordinary care and, removal of the Trustee and appointment of a successor, and after the
reasonable diligence,but shall not be liable for any mistake of judgment final account of the Trustee has been properly settled,the Trustee shall
or other action taken in good faith.The Trustee shall not be liable for any transfer and deliver any of the Trust Funds involved to such successor.
loss sustained by the Trust Funds by reasons of any investment made in ARTICLE VII. Duration and Revocation of Trust Agreement.
good faith and in accordance with the provisions of this Agreement.
Section 7.1. Duration and Revocation. This Trust shall continue for
The Trustee's duties and obligations shall be limited to those such time as may be necessary to accomplish the purpose for which it
expressly imposed upon it by this Agreement. was created but may be terminated or revoked at any time by the
ARTICLE IV. Taxes, Expenses and Compensation of Trustee. _ Employer as it relates to any and/or all related participating Employees.
Written notice of such termination or revocation shall be given to the
Section 4.1. Taxes.The Trustee shall deduct from and charge against Trustee by the Employer.Upon termination or revocation of the Trust,
the Trust Funds any taxes on the Trust Funds or the income thereof or all of the assets thereof shall return to and revert to the Employer.
which the Trustee is required to pay with respect`to the interest of any Termination of this Trust shall not,however,relieve the Employer of the
person therein. Employer's continuing obligation to pay deferred compensation to
Section 4.2. Expenses. The Trustee shall deduct from and charge Employees in accordance with the terms of the Plan.
against the Trust Funds all reasonable expenses incurred by the Trustee Section 7.2. Amendment.The Employer shall have the right to amend
in the administration of the Trust Funds, including counsel, agency, this Agreement in whole and in part but only with the Trustee's written
investment advisory, and other necessary fees. consent.Any such amendment shall become effective upon(a)delivery
ARTICLE V. Settlement of Accounts.The Trustee shall keep accurate to the Trustee of a written instrument of amendment, and (b) the
and detailed accounts of all investments, receipts,disbursements,and endorsement by the Trustee on such instrument of its consent thereto.
other transactions hereunder. ARTICLE Vlll. Miscellaneous.
Within ninety (90)days after the close of each fiscal year,the Trustee Section 8.1. Laws of the District of Columbia to Govern. This
shall render in duplicate to the Employer an account of its acts and
transactions as Trustee hereunder.If any part of the Trust Fund shall be Agreement and the Trust hereby created shall be construed and
invested through the medium of any common,collective or commingled regulated by the laws of the District of Columbia.
Trust Funds, the last annual report of such Trust Funds shall be Section 8.2. Successor Employers.The"Employer"shall include any
submitted with and incorporated in the account. person who succeeds the Employer and who thereby becomes subject
If within ninety (90) days after the mailing of the account or any to the obligations of the Employer under the Plan.
amended account the Employer has not filed with the Trustee notice of Section 8.3. Withdrawals. The Employer may,at any time,and from
any objection to any act or transaction of the Trustee, the account or time to time, withdraw a portion or all of Trust Funds created by this
amended account shall become an account stated.If any objection has Agreement.
been filed,and if the Employer is satisfied that it should be withdrawn or Section 8.4. Gender and Number. The masculine includes the
if the account is adjusted to the Employer's satisfaction,the Employer feminine and the singular includes the plural unless the context requires
shall in writing filed with the Trustee signify approval of the account and another meaning.
it shall become an account stated.
2
ICMA Retirement Ctporation
THE ICMA RETIREMENT CORPORATION'S
DEFERRED COMPENSATION PLAN
Administrator Services
The ICMA Retirement Corporation has offered a nationally available public
employee deferred compensation plan since 1972. We are a non-prof it
organization, originated and governed by local public officials. We are
the pioneers in the field of local government deferred compensation, and
our sole commitment- is to seek the highest possible investment.: return for
our part-icipants. RC currently administers the largest single pool of
-local government deferred assets, with a trust fund balance in excess of
$225 million; over 1650 local government's offer this deferred canpensation
Ian to their employees.
All of our administrative processes are computerized. RC maintains an
account for each employer and subaccount-,s for each participating employee.
These accounts provide historic records of all transactions and activity,
reflecting date and amount of all contributions, benefit paymerets,
withdrawals, and oth'C'.1.1r transfers and adjustments,, The trust f unds are
evaluated and earnings and market value adjustments are assessed monthly.
RC's policy is to update each account within three working days of a
transact ion and to reconcile all accounts monthly. Current calendar year
information is on line and immediately available; past years' information
is kept on -tape and is accessible at any time. RC archives all account
information.
RC requests that employers send a single contribution check for all
participants on a schedule convenient for the employer. Approximately one
week prior to the date RC expects a contribution, employers receive a
compu ter ized statement listing part-icipants' -regular contributions to
assist them in .submitting deferred compensation (Appendix 2) .
A1.1.6 administrative and accounting functions are handled in the Washington,
D.C. , office. Records are maintained on a centralized computer and all
additions, amendments, and adjustments are made by staff in Washington.
Changes to accounts, including changes in amounts deferred, and stopping
and starting participation, may be requested at the time the rejular
contributions are made or at..: any other time that is convenient. Specially
trained staff review all requests for changes to assure compliame with
applicable laws and regulations.
K.
The Participant Services staf f provides the communication link ;Oit-h
s, either via toll-free telephone line or regular individual participant"-
written correspondence. This staff has immediate access to all account
data and can assist participants with specific questions about their
accounts, as well as with RC's administrative processes such as.
withdrawals, transfers, or changes in investment allocation. Participants
also can request information on fund performance from this groap,
Highly technical or policy questions are immediately referred to the
Director of Services or to another member of the management stf*
ICMA Retirement Corporation Page One Apri., 1984
7
1CMA Retirement Corporation
2) Investments
RC currently offers four investment options open to all participants.
Taken together, these options allow an employee to participate in the
major investment categories considered prudent for retirement planning.
The categories are guaranteed investment contracts, equities (stocks) ,
corporate bonds, and government securities. They are offered through the
funds described below. (Please see Appendix 8 for more information. )
e
The Guaranteed Fund: The Guaranteed Fund offers protection of
principal and a guaranteed rate of return for a specified period of
time. The return is underwritten by guaranteed insurance contracts
and similar types of securities. RC guarantees 11.75 percent
annually on all contributions during 1984. This annual rate is
credited through 1984. There is no reduction in the guarantee for
any reason, including early withdrawal. Because this fund is
invested in short-term guaranteed contracts, RC will offers a premium
rate of return based on current availability in the market; however,
RC has historically renegotiated contracts to improve return during
changing markets.
The Stock Fund: Introduced in April . 1983, the Stock Fund offers a
varied portfolio of equities and has the potential for the highest
long-term returns of any of RC's funds, at a significantly higher
level of risk. Its objective is to provide a return, over any five-
year period, at an average ratO exceeding inflation by 6 percent per
year. At this time the Fund .is invested in the 20th Century Select
A
F
and Fidelity Magellan mutual funds.
The Balanced Fund: This fund is oriented toward equities; however,
due to the high volatility of return in equity investment, the fund
is balanced with corporate bonds and government securities. Its
long-term objective is to provide a return, over five years, in an
average amount to exceed inflation by 4 percent per year.
The Bond Fund: This fund is restricted to investments in corporate
and government-backed debt securities (generally referred to as
bonds) . Over two-market cycles this fund is designed to return an
aver .gt� yearly rate of 2 ,percent above inflation; in any year this
fund should not have a negative return. The Bond Fund is designed to
provide a more stable annual rate of return than would be possible
with equity investments. It is not likely that long-term returns
would equal those of the Balanced o"r Stook funds.
Participants may change the investment allocation for future contributions
at any time and as often as they wish by filing an amended joinder
rt agreement. Past accumulations may be transferred among the -funds at any
time, as long as three or more months have elapsed since the last
transfer.
This investment package is designed specifically for longer-term investing
suit-able for retirement planning, which RC considers the most appropriate
use of deferred compensation funds. Each fund is managed by a group of
institutional investment management firms specializing in the types of
securities offered by each of.. the funds. The managers' performances are Ono
ICMA Retirement Corporation Page Two April 1984
1CMA Retirement Corporation --
reviewed quarterly by the RC Board of Directors against carefully
developed performance goals and objectives. Firms that consistently fail
to meet these performance objectives are subject to dismissal.
3) Earnings History
For the historic performance of RC's variable funds, please see the
current Investment Report (Appendix 3) and the 1983 Year-End Report
(Appendix 4) .
4) Curren,".: Guarantees
Below are the net interest credits for RC's Guaranteed Fund.
Deposit
Period 1983 1984 1985 1986 1987 1988 1989
7/79-9/81 13.0% 13.0% 13*0% 13*0% 13*0% 13,0%*
10/81-6/82 14.0% 14.0% 1490% 14,0% 14*0%*
7/82-6/83 15.25% 15.25% 15925% 15*25% 15e25%*
7/83-12/83 11,0% 1110% 1100% 11.0%*
1/84-12/84 11e75% 11,75% 11*75% 11,75% 11,75% 11,75%
*At the maturity of each contract, RC will receive the book value, plus
earnings, and will reinvest those funds with the insurance company
offering the highest and best guarantee at that time. Participants will
have the following options:
A. Leave funds in the Guaranteed Fund at the new guaranteed rate.
Bo Transfer all or part of the fund's to another investment option
offered by RC.
5) Fr es
RC charges only two' fees: a $1,.00 per month account maintenance fee
charged to all participants contributing more than $800 on an annualized
basis- and a management fee of 1 percent of the total fund balance for the
Balanced, Bond, and Stock funds. This amount is prorated monthly. As is
customary in the marketplace, the return on the Guaranteed Fund is quoted
to participants after deduction of necessary operating expenses; there is
no one percent management charge assessed on the guaranteed rate.
RC has continually reduced its fees by taking advantage of economies of
scale. In July 1982 we removed the $1.00 monthly charge for all
pc?rticipant"s contributing less than $800 annualized. This elimination is
part of a,. two-step reduction in all fees which began in October 1981,
designed -1,-.-o encourage all employees to begin retirement planning.
ICMA Retirement Corporation . Page Three April 1984
.... _ _ •.-.Iwo.vww.................----i,r.-,..-...-.s+.rr.v-..i...,.Y.r..rf�-r.---,.� ..»K . .. •
- a
1CMA Retirement Corporation --
6) Employee Education
RC suggests the following basic format for an education program.
I. INTRODUCTION - To communicate the program initially to employees, RC
supplies individual copies of the brochure "A Tax Shelter For Your Future"
(Appendix 8) . Generally, this brochure is distributed with a memo from an
official announcing this employee benefit and setting up a series of
orientation meetings for employees who wish to enroll.
II. ENROLLMENT - Trained, salaried RC representatives will conduct the
employee meetings explaining the investment options and how to fill out
enrollment forms. The meetings should be small enough to allow productive
question-and-answer periods. The total number of meetings and-
corresponding number of days depends on the degree of interest generated
by the introductory brochure.
At the end of each group meeting, employees will have the opportunity to
discuss personal matters with the representatives. They may also make
appointments for individual. consultation. RC's representatives would be
available on a periodic basis for re-enrollment.
RC provides all forms, brochures, and pamphlets at no cost to the
employer. The enrollment or joinder agreement is Appendix 1.
7) Status Reports
RC automatically provides participants with quarterly account statements
(Appendix 5) which detail all account activity including the balance at
the beginning of the quarter, a list of contributions and the dates they
were received, earnings or losses, and any transfers, adjustments, or
reallocation of investments. These statements are mailed within 30 days
of the end of the quarter
In addition, participants will receive an annual summary (Appendix 6)
which lists the same type of- information that appears on the quarterly
statement and projects fund balances and retirement payout options. Along
with the annual summary, participants will receive a brief year-end report
on investment fund performance (Appendix 4) . These reports are mailed
within sixty days of the close of the fiscal year, December 31.
The annual investment report (Appendix 31 is available to all participants
upon request. Participants may also request a copy of their year-to-date
account statement at any time by writing to RC. Regular reports on
investment performance are part of the free newsletter, RC Notes (Appendix 7)
RC sends a consolidated statement of. all. "account activity to the employer
annually; however, if the employer needs this information more frequently,
we will be pleased to provide it at no charge. Employers also receive the
annual inves_ment report and the quarterly newsletter, RC Notes.
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8) Withdrawals
There is no penalty or fee for any withdrawal from the ICMA Retirement
Corporation, and during the payout period the funds remaining in the
account continue to accrue earnings. All types of withdrawals are
permitted in accordance with Section 457 of the Internal Revenue Code as
follows:
A
Termination of Participants may either withdraw the account balance
Employment: in a lump sum or in periodic payments over a number
of years, or leave it with RC to be invested until
retirement.
Unforseeable Participants may withdraw a lump sum in an amount to
Emergency: cover the cost of an emergency.
Retirement/ Participants may withdraw benefits in these cases
Disability: according to any schedule they choose. options
include but are not limited to the following: one-
time lump sum; specified amount on a regular basis
until account is exhausted; over a specified number
of years in monthly, quarterly, semi--annual, or
annual payments; through the purchase by RC of a
.single premium annuity.
Death: Upon the death of a participant, the designated
. beneficiary is entitled to 100 percent of the account
value, either in a lump sum or in periodic payments.
All requests for disbursements are handled in RC's Washington, D.C. ,
office within 60 days. Disbursements are made on the last day of the month.
Requests for unforeseeable emergency withdrawals are reviewed individually
and can be paid in a more timely manner.
9) Retired Employee Services
RC regards all participants, whether actively contributing, inactive, or
retired, equally. In all cases, we continue to invest the funds in the
accounts and credit earnings, send all reports, and provide other regular
service assistance.
For retired participants, RC offers extensive assistance in determining
the benefit payment program that best suits their needs. We will provide
an estimated benefit projection for a variety of options at varying
interest rates, for example, quarterly payments for five years or monthly
payments over the participant's life expectancy. For participants who
want to investigate the jurchase of an annuity, RC surveys the market to
identify the highest payment policy available and then compares this
amount to other available options.
10) Adopting the Plan
The Plan Adoption Package, which provides instructions for adopting the
plan, a sample resolution, and the plan documents, is found in Appendix 9.
ICMA Retirement Corporation Page Five April. 1984
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