HomeMy WebLinkAboutResolution 1994 - 0039RESOLUTION NO.94-39
APPROVING AMENDED DEFERRED COMPENSATION
PL1~.N FOR OFFICERS AND EMPLOYEES
A JOINT RESOLUTION OF THE BOARDS OF DIRECTORS OF
COUNTY SANITATION DISTRICTS NOS.1,2,3,5,6,
7,11,13 AND 14 OF ORANGE COUNTY,CALIFORNIA,
APPROVING AN AMENDED DEFERRED COMPENSATION PLAN FOR
THE OFFICERS AND EMPLOYEES OF THE DISTRICTS AND
REPEALING RESOLUTION NOS.79—176,81-166 AND 83—188
*******************
WHEREAS,by Resolution No.81-66 adopted by the Boards of
Directors on October 14,1981,the Districts approved and adopted
a revised Deferred Compensation Plan (hereinafter referred to as
the “Plan”),and,by Resolution No.83-188 adopted by the Boards
of Directors on December 14,1983,the Districts approved and
adopted an amendment to the Plan;and,
WHEREAS,certain changes in the federal law and regulations
pertaining to deferred compensation plans adopted and
administered by public agencies have been enacted subsequent to
the adoption and amendment of the Plan;and,
WHEREAS,the Boards of Directors desire to again amend the
Plan to comply with such new federal law and regulations.
NOW,THEREFORE,the Boards of Directors of County Sanitation
Districts Nos.1,2,3,5,6,7,11,13,and 14 of Orange County,
California,
DO HEREBY RESOLVE,DETERMINE AND ORDER:
Section 1 That the County Sanitation Districts of Orange
County,California Deferred Compensation Plan as Amended 1994 (as
set forth in Exhibit “A”attached hereto and incorporated herein
by reference as though set forth herein at length),is hereby
adopted and shall remain in effect until amended or terminated by
resolution of the Boards of Directors.
Section 2 That Resolution Nos.79—176,81—166 and 83—188
are hereby repealed.
PASSED AND ADOPTED at a regular meeting held April 13,1994.
RAU3.039
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY,CALIFORNIA
DEFERRED COMPENSATION PLAN AS AMENDED 1994
SECTION 1:Background By Resolution No.81-166 adopted by
the Boards of Directors of the County Sanitation Districts of
Orange County,.California,on October 14,1981,the Districts
approved and adopted a revised deferred compensation plan.Due to
changes in the law applicable to deferred compensation plans of
local public agency employers,the Districts did,by Resolutions
Nos.83-188 and 94-
,adopted by the Boards of Directors on
December 14,1983 and
__________,1994,respectively,approve and
adopt amendments to the deferred compensation plan.This document
constitutes the completely amended deferred compensation plan,as
adopted pursuant to Resolution No.94
.
The name of this
deferred compensation plan is the County Sanitation Districts of
Orange County,California Deferred Compensation Plan as Amended
1994 (hereinafter referred to as the “Plan”)
SECTION 2:Purpose The primary purpose of this Plan is to
attract and retain personnel by permitting them to enter into Plan
Participation Agreements which will provide future payments in lieu
of current income upon death,disability,retirement,or other
termination of employment with the Employer.
SECTION 3:Definitions For the purposes of this Plan,
certain words or phrases used herein will have the following
meanings:
3.1 “Category A Beneficiary”shall mean any individual
designated as the beneficiary by the Participant,either
pursuant to the Participation Agreement or pursuant to a
later written election filed with the Employer before the
death of the Participant.A trust may also be designated
as a beneficiary under the Plan,under certain
circumstances more specifically described in Subsection
10.6.2 below,but in that case the trust beneficiaries
who may receive trust distributions on account of
payments from the Plan shall be deemed to be the
Category A Beneficiaries under the Plan.No other legal
entity,such as a charitable foundation or the estate of
the Participant,may be a Category A Beneficiary for the
purposes of the Plan.
3.2 “Category B Beneficiary”shall mean a beneficiary who is
designated by the Participant in either the Participation
Agreement or a later written election filed with the
Employer before the Participant’s death,and who is not
a “Category A Beneficiary”within the meaning of Section
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3.1 above.(Example:a legal entity other than a trust,
such as a charitable foundation or the estate of the
Participant.)
3•3 “Deferred Compensation”shall mean the amount of
compensation not yet earned,which the Participant and
the Employer mutually agree shall be deferred in
accordance with the provisions of this Plan.
3.4 “Deferred Compensation Investment Fund”shall mean the
fund to which all Deferred Compensation is credited,as
described in Section 6.2.
3.5 “Employee”shall mean any employee who is a director or
officer,or who is a permanent,full-time employee of the
County Sanitation Districts of Orange County,California.
3.6 “Employer”shall mean the County Sanitation Districts of
Orange County,California.
3.7 “Includible Compensation”(a term defined in Internal
Revenue Code section 457(e)(5)and Treasury Regulation
section 1.457-2(e)(2))shall mean compensation for
services performed for the Employer which is currently
includible in gross income,but less any amounts deferred
pursuant to a plan described in Internal Revenue Code
section 457 (including but not limited to this Plan)or
Internal Revenue Code section 403 (b).The amount of
Includible Compensation shall be determined without
regard to any community property laws.
3.8 “Investment Account”shall mean a book account for the
individual Participant,as more fully described in
Section 6.3.
3.9 “Late Retirement”shall mean a termination of service
with the Employer which becomes effective after the date
on which the Participant has met the requirements to
effect a Normal Retirement.
3.10 “Normal Retirement”shall mean a termination of service
with the Employer which becomes effective on the first
day of the calendar month after the Participant meets the
minimum age and/or service requirements,for voluntary
retirement,specified in the Retirement Plan.
3.11 “Normal Retirement Age”shall mean the age at which the
Participant has met the requirements for Normal
Retirement;provided,however,that a Participant who
continues to work for the Employer after attaining Normal
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Retirement Age may elect,for the purposes of Section 4.3
below,an alternate Normal Retirement Age,which may be
an age greater than age 70~,but which shall be a date or
age not later than either (a)any mandatory retirement
age specified by the Employer,or (b)the date or age at
which the Participant actually separates from service
with the Employer.The Participant shall make any such
election by delivering to the Employer,prior to
separation from service with the Employer,written notice
specifying the chosen alternate Normal Retirement Age.
Nothing in this Section 3.11 shall be construed to mean
that the Employer has imposed a mandatory retirement age
or that the Participant has agreed to retire at a
designated age.
3.12 “Participant”shall mean an Employee who has elected to
participate in the Plan.
3.13 “Participation Agreement”shall mean the agreement which
is executed by the Employee and filed with the Employer
in accordance with Section 4,and pursuant to which the
Employee elects to become a Participant in the Plan and
defers a portion of his income.
3.14 “Plan”shall mean the County Sanitation Districts of
Orange County,California Deferred Compensation Plan as
Amended 1993,established hereunder.
3.15 “Plan Year”shall mean the calendar year.
3.16 “Required Beginning Date”shall mean the latest date that
distributions are permitted to commence under Section
10 .4.
3.17 “Retirement Plan”shall mean the retirement plan of the
Orange County Employees’Retirement System,which is
governed by the County Employees Retirement Law of 1937
(California Government Code section 31450 et sep.and is
made available to the employees of the Employer pursuant
to contract.
3.18 “Salary”shall mean the full,regular,basic salary which
would •be paid by the Employer to or for the benefit of
the Employee (if he were not a Participant in the Plan)
for actual services for the period that he is a
Participant.
3.19 “Termination of Service”shall mean the severance,prior
to retirement and other than by death,of the
Participant’s employment with the Employer.
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3.20 “Unforeseeable Emergency”shall mean a severe financial
hardship to the Participant resulting from a sudden and
unexpected illness or accident of the Participant or of
a dependent (as defined in Internal Revenue Code section
152(a))of the Participant,loss of the Participant’s
property due to casualty,or other similar extraordinary
and unforeseeable circumstances arising as a result of
events beyond the control of the Participant.The
circumstances that will constitute an Unforeseeable
Emergency will depend upon the facts of each case.
Examples of what are not considered to be Unforeseeable
Emergencies include the need to send a Participant’s
child to college or the desire to purchase a home.
SECTION 4:Participation in the Plan
4.1 Any Employee designated by the Employer to be eligible
may elect to become a Participant in the Plan by
executing and filing a Participation Agreement with the
Employer.An election to participate in the Plan and to
defer compensation under the Plan shall become effective
with respect to compensation earned by the Participant
during the period commencing with the beginning date of
the first pay period in the month following the month in
which the Employer consents to and approves of the
Participation Agreement.Such election to defer
compensation shall continue thereafter in full force and
effect unless and until terminated by the Participant as
provided in either Section 4.4 or Section 11.
4.2 Each Participation Agreement shall specify the amount of
compensation,either by dollar amount or by percentage of
Salary (as adjusted for matching and non-matching funds,
if applicable),which is to be deferred pursuant to the
Plan and (except in the case of matching and non-matching
funds)to be withheld out of the Salary otherwise payable
to the Participant for each pay period.The amount
deferred each year may not exceed the lesser of:
(a)Seventy-Five Hundred Dollars ($7,500.00),reduced
by any amount excludable from the Participant’s
gross income for the taxable year under section
403(b)of the Internal Revenue Code on account of
contributions made by the Employer;or
(b)Thirty-Three and One-Third Percent (33-1/3~)of the
Participant’s Includible Compensation,reduced by
any amount excludable from the Participant’s gross
income for the taxable year under section 403 (b)of
the Internal Revenue Code on account of
1/20/94 4
contributions made by the Employer,
or be less than Three Hundred Dollars ($300.00)each
year.This three hundred dollar ($300.00)limitation
shall not be applied to any Participant who is paid less
than $1,200.00 per year for services rendered to the
Employer.
(For practical application,note that 33-1/3%of
Includible Compensation is generally the equivalent of
25%of gross compensation,and that for Participants with
an annual salary of less than $30,000,the subparagraph
(b)deferral limit usually applies.)
4.3 Notwithstanding the provisions of Section 4.2 herein,
during any or all of the last three (3)taxable years
ending before a Participant attains Normal Retirement Age
(or the alternate Normal Retirement Age chosen pursuant
to Section 3
.
11 above),the maximum amount which may be
deferred annually shall be the lesser of:
(a)Fifteen Thousand Dollars ($15,000.00),reduced by
any amount excludable from the Participant’s gross
income for the taxable year under section 403 (b)of
the Internal Revenue Code on account of
contributions made by the Employer;or
(b)The sum of:
(i)The maximum deferral amount established for
the purposes of Section 4.2 for the taxable
year (determined without regard to this
Section 4.3),plus
(ii)The maximum deferral amount established in
Section 4.2 for any prior taxable year or
years,less the amount of compensation
deferred under the Plan,for such prior
taxable year or years,pursuant to either
Section 4.2 or this Section 4.3.
A prior taxable year shall be taken into account
under subdivision (ii)only if:(a)it begins after
December 31,1978;(b)the Participant was eligible
to participate in the Plan during all or any
portion of the taxable year;and (c)compensation
deferred (if any)under the Plan during the taxable
year was subject to the maximum deferral amount
under Section 4.2 herein.A Participant will be
considered to have been eligible to participate in
1/20/94 5
the Plan for a taxable year if the Participant was
an Employee for any part of that taxable year.A
prior taxable year includes a taxable year in which
the Participant was eligible to participate in an
Internal Revenue Code section 457 eligible deferred
compensation plan sponsored by an entity other than
the Employer,provided that such other entity is
located in the State of California.
4.4 A Participant may terminate his election to defer
compensation under the Plan by executing and filing with
the Employer a written notice at least thirty (30)days
prior to the effective date of termination.In the event
a Participant ceases to qualify under Section 3 hereof as
a Participant,his election to defer compensation shall
automatically terminate on the same date as he becomes
ineligible.A Participant (including a former
Participant who is again eligible to participate)may not
resume the deferral of compensation during the calendar
month in which termination occurred;however,he may
elect to resume the deferral of compensation in
subsequent calendar months after a lapse of not less than
three (3)months.No amounts shall be payable to an
Employee upon the termination of deferral of
compensation,unless otherwise provided for in either
Section 10 or Section 11.
4.5 A Participant may change the amount of compensation to be
deferred in a subsequent calendar month by executing and
filing notice with the Employer at least thirty (30)days
prior to the beginning of such month;provided,however,
that such change may be made not more than four (4)times
in a calendar year.
4.6 In applying the provisions of this Section 4,amounts
deferred shall be taken into account at present value in
the Plan Year in which deferred.
SECTION 5:Deferral of Compensation During the period of
participation,the Employer shall not pay the Participant his full
Salary,but shall defer payment of such part of his Salary as is
specified by the Participant in the Participation Agreement,which
has been executed and filed with the Employer.
SECTION 6:Administration of the Plan
6.1 The Employer shall have full authority and power to adopt
the rules and regulations for the administration of the
Plan,and to interpret,amend,alter and revoke any rules
and regulations so adopted.
1/20/94 6
6.2 The Employer shall establish a Deferred Compensation
Investment Fund to which all Deferred Compensation shall
be credited at such times as the amounts deferred would
have been payable to the individual Employee if he were
not a Participant in the Plan.
6.3 The Employer shall maintain a book account (the
“Investment Account”)for each Participant,to which
shall be credited the Deferred Compensation of the
individual Participant.The Participant’s Investment
Account shall be credited with the earnings thereof,if
any,and shall be credited or debited,as the case may
be,with the net amount of any gains or losses which may
result from the investment of all or any portion of the
amount in the Participant’s Investment Account.The
Employer,its directors,officers and employees,shall
not be liable for any losses on any investment credited
to any Investment Account.On a quarterly basis,the
Employer shall credit the earnings and/or gains and debit
the losses on each Investment Account.Such credits and
debits shall be made,and the final quarterly balance of
the Investment Account shall be posted,as of the last
day of each quarter.
SECTION 7:Investments The Employer is not required to
invest the amounts in the Deferred Compensation Investment Fund.
However,it is the Employer’s intent to invest and reinvest such
amounts in a manner intended to increase the same,and the net
interest,accumulation and increments thereon shall be credited to,
and held in,the Deferred Compensation Investment Fund for the
benefit of the Participants,provided that such amounts remain the
unrestricted assets of the Employer,as set forth in Section 8
below.The Employer shall not be responsible for any loss due to
the investment or failure of investment of such assets;nor shall
the Employer be required to replace any loss whatsoever which may
result from said investments.
SECTION 8:Assets of County Sanitation Districts of Orange
County,California All Deferred Compensation credited to the
Deferred Compensation Investment Fund,all property and rights
purchased with amounts credited to the Deferred Compensation
Investment Fund,and all income attributable to such amounts,
property,or rights,shall be and remain (until made available to
the Participant or other beneficiary)solely the property and
rights of the Employer (without being restricted to the provision
of benefits under the Plan),subject only to the claims of the
Employer’s general creditors.Without such Employer ownership,the
Plan would not qualify as an “eligible deferred compensation plan”
within the meaning of Internal Revenue Code section 457,so as to
make tax benefits available to the Participants.
1/20/94 7
SECTION 9:Plan Benefits Deferred Compensation benefits are
payable on the happening of any of the following events:
(a)Normal Retirement of a Participant;
(b)Late Retirement of a Participant;
(c)Termination of Service of a Participant;or
(d)Death of a Participant who dies either before or after
Deferred Compensation payments commence,and before the
entire amount of his Investment Account is paid.
SECTION 10:Distribution of Benefits
10 .1 Termination of Employment by Retirement The Participant
is eligible to receive distributions of benefits,with
respect to retirement,after the Participant has met the
requirements for Normal Retirement and has retired from
service with the Employer.The Participant may submit to
the Employer an application for distribution of benefits
under the Plan as early as the date he notifies the
Employer of his intended retirement and as late as thirty
(30)days following the actual date of termination of
employment due to retirement.Pursuant to such
application,the Participant shall elect one of the
benefits payment options described below.Such election
shall become irrevocable upon the lapse of the thirtieth
(30th)day following termination of employment with the
Employer due to retirement.
Following the Participant’s termination of employment due
to retirement and the receipt of such application,the
Employer shall pay to the Participant one of the
following benefits (expressed in terms of both payment
option and commencement date)as elected by the
Participant:
PAYMENT OPTION -
(a)Consecutive equal monthly payments over a period of
36 months to 180 months,as determined by the
Participant;provided,however,that any such
period may not extend beyond the life expectancy of
the Participant or the joint life,and last survivor
expectancy of the Participant and the Participant’s
Category A Beneficiary.
(b)Consecutive equal monthly payments for the life of
the Participant or for the lives of the Participant
1/20/94 8
and his Category A Beneficiary.
(c)A single payment equal to the balance of the
Participant’s Investment Account.
(d)A combination of the benefits described in (a),
(b)and/or (c)above.
CO~~Th~1ENCEMENT DATE OPTION -
(a)The first day of the third calendar month following
the month in which termination of employment
occurs,or
(b)The first day of a later month as designated by the
Participant.
(c)In the case of payment option (d)above,a
combination of commencement date options (a)and
(b).
The foregoing options are limited by,and these payments
shall be made subject to,the provisions of Sections
10.3,10.5,10.6 and 10.7 hereof.
The total amount of any benefits paid pursuant to payment
options (a)through (d)above shall not exceed the sum of
the amounts deferred by the Participant,as adjusted for
any earnings or losses thereon.
Should the Participant fail to elect one of the benefits
hereunder by way of an application for retirement
benefits filed with the Employer within thirty (30)days
after retirement,the Employer shall pay the sum in the
Participant’s Investment Account according to the
“Benefit At!election previously made pursuant to either
the Participation Agreement or a modification thereof.
However,if there is no such previous election,then the
Employer shall pay the sum in the Participant’s
Investment Account according to payment option (d)above,
on the Required Beginning Date.
10.2 Termination of Employment Prior to Retirement Following
the Termination of Service of a Participant,the Employer
shall pay to the Participant the benefit elected by the
Participant pursuant to either (a)“Benefit B”of the
Participation Agreement submitted by the Participant at
the time of election to participate in the Plan or (b)a
later written election delivered to the Employer within
thirty (30)days following Termination of Service.The
1/20/94 9
latest such election filed with the Employer shall become
irrevocable upon the lapse of the thirtieth (30th)day
following Termination of Service.
The Participant may choose from both the payment options
and the commencement dates as set forth in Section 10.1
above.
As with regard to the benefit options expressed in
Section 10.1,the benefit options available under this
Section 10.2 are limited by,and shall be made subject
to,the provisions of Sections 10.3,10.5,10.6 and 10.7
hereof.
Should the Participant fail to elect one of the benefits
hereunder either pursuant to the ~Benef it B”provisions
of the Participation Agreement or pursuant to a
subsequent written election delivered to the Employer
within thirty (30)days after Termination of Service,
then the Employer shall pay the total amount in the
Participant’s Investment Account to the Participant in a
single lump sum on the first day of the third calendar
month following the month in which Termination of Service
occurs.In no event,however,shall such payment occur
later than the Required Beginning Date.
10.3 Reguired Beginning Date of Distributions
Notwithstanding any other provision of the Plan,payments
under Sections 10.1 and 10.2 shall begin no later than
the later of:
(a)April 1 of the calendar year following the calendar
year in which the Employee attains age 70~or
(b)April 1 of the calendar year following the calendar
year in which the Employee retires.
10.4 Acceleration of Payment of Small Investment Accounts
Notwithstanding the provisions of Sections 10.1 and 10.2
above,once a Participant has separated from service with
the Employer (and is no longer able to defer compensation
under the Plan)and when the total balance in that
Participant’s Investment Account does not exceed $3,500,
the Participant shall be entitled to withdraw the entire
balance of that Investment Account as a lump sum,by
delivering to the Employer a written request for
acceleration of payment.If the conditions of the
preceding sentence are met,the Employer shall distribute
to the Participant the entire remaining balance of the
Investment Account within sixty (60)days of receipt of
1/20/94 10
the request.
10.5 Lifetime Distribution Reguirements The distributions
under this Plan must be made primarily for the benefit of
the Participant and the schedule elected by the
Participant for payment of benefits under Sections 10.1
and 10.2 of the Plan must be such that benefits payable
to a beneficiary are not more than incidental,according
to the applicable Treasury Regulations.Payments under
those sections shall be distributed over the life of the
Participant or over the lives of the Participant and a
Category A Beneficiary (or over a period not extending
beyond the life expectancy of the Participant or the
joint life and last survivor expectancy of the
Participant and a Category A Beneficiary),in accordance
with the Treasury Regulations under Internal Revenue Code
section 401(a)(9)
In addition,as required by Internal Revenue Code section
401 (a)(9)(G),and except as otherwise provided in Section
10.7 below,all distributions shall be made in accordance
with the incidental death benefit requirements of
Internal Revenue Code section 401(a).As more fully
described in the applicable Treasury Regulations,as
promulgated pursuant to the authority of Internal Revenue
Code section 401 (a)(9),this means that distributions
must be made in accordance with a certain formula
designed to ensure that the entire Investment Account of
the Participant is distributed over a period of time not
to exceed the joint life and last survivor expectancy of
the Participant and a Category A Beneficiary who is not
more than ten years younger than the Participant.
10.6 Death of Participant In the event of the death of the
Participant,either before or after termination of
employment (by retirement or otherwise),and before the
entire amount of his Investment Account has been
distributed,the Employer shall distribute the amount
then remaining in the Participant’s Investment Account
pursuant to Subsections 10.6.1 through 10.6.3 below.
10.6.1 When Participant Dies on or after the Reguired
Beginning Date and after Distributions Have Begun
If distributions have already begun during a
Participant’s lifetime,and the Participant dies on
or after the Required Beginning Date and before the
entire amount of his Investment Account has been
distributed,then the remaining portion of the
Participant’s Investment Account shall be
distributed,as elected by the Participant,
1/20/94 11
pursuant to either the “Benef it C”provisions of
the Participation Agreement or a later written
election delivered to the Employer before the death
of the Participant,unless the Participant’s
election would permit distributions to be made less
rapidly after death than under the method of
distribution being used as of the date of death.
In order to comply with Internal Revenue Code
section 401 (a)(9),
distributions (under this
Subsection 10.6.1)after death must be made at
least as rapidly as under the method of
distribution being used as of the date of death.
10.6.2 When Participant Dies either before the Required
Beginning Date or before Distributions Have Begun
If a Participant dies either before the Required
Beginning Date or before distribution of his
Investment Account has begun,and,if any portion
of the Investment Account is payable to (or for the
benefit of)a Category A or B Beneficiary,then the
Employer shall pay such portion as follows -
CATEGORY A BENEFICIARIES
(1)if the Category A Beneficiary is other
than the surviving spouse the portion of the
Investment Account payable to such beneficiary
shall be distributed according to one of the
following options:
(a)consecutive equal monthly payments
over a period of 36 months to 60
months (but not exceeding the life
expectancy of the Category A
Beneficiary);
(b)a single lump-sum payment;or
(c)a combination of the benefits
described in (a)and (b)above.
Such distributions shall begin on the
date designated by either the Participant
or,if permitted by the Participant,the
Category A Beneficiary,but in no event
later than December 31 of the calendar
year immediately following the calendar
year in which the Participant dies.
(2)if the Category A Beneficiary is the
1/20/94 12
surviving spouse of the Partici~jant the
portion of the Investment Account payable to
the surviving spouse shall be distributed
according to one of the following options:
(a)consecutive equal monthly payments
over a period not to extend beyond
the life expectancy of the surviving
spouse;
(b)a single lump-sum payment;or
Cc)a combination of the benefits
described in (a)and (b)above.
Such distributions shall begin on the
date designated by either the Participant
or,if permitted by the Participant,the
surviving spouse,but in no event later
than the later of Ci)December 31 of the
calendar year immediately following the
calendar year in which the Participant
dies,and (ii)December 31 of the
calendar year in which the Participant
would have attained age 7O~.
Notwithstanding the foregoing,however,
if as of the date of the Participant’s
death,both the surviving spouse and
another are Category A Beneficiaries,
then distributions shall begin on or
before December 31 of the calendar year
immediately following the calendar year
in which the Participant dies.
CATEGORY B BENEFICIARIES
(3)if the beneficiary is a Category B
Beneficiary which is a validly existing legal
entity (such as a charitable foundation or the
estate of the Participant),the portion of the
Investment Account payable to such beneficiary
shall be distributed as a lump sum on the
first day of the third calendar month
following the month in which the death of the
Participant occurs.
All elections (as to both payment option and
commencement date)to be made under this Subsection
10.6.2(1)(2)shall be made by the Participant
pursuant to either the “Benefit C”provisions of
1/20/94 13
the Participation Agreement or a later written
election delivered to the Employer before the death
of the Participant.Notwithstanding the foregoing,
however,the Participant,in the Participation
Agreement or such later written election,may
specify that,following the death of the
Participant,the Category A Beneficiary may elect,
subject to the foregoing limitations,the form of
payments and the commencement date of
distributions.Any such beneficiary election,
however,must be in the form of an irrevocable
written election filed with the Employer no later
than ninety (90)days following the date of death
of the Participant.In the absence of any such
timely election,the portion of the Investment
Account payable to such Category A Beneficiary
shall be distributed to him in a lump sum on the
first day of the fifth calendar month following the
month in which the death of the Participant occurs.
If a Category A Beneficiary dies within six months
of the date of the Participant’s death and before
the entire portion of the Investment Account
allocated to him has been paid pursuant to this
Subsection 10.6.2,then the remainder of such
portion shall be paid to the contingent
beneficiary,if any,designated by the Participant
in either the Participation Agreement or a later
written election delivered to the Employer before
the Participant’s death.If there is no such
‘contingent beneficiary,or if the Category A
Beneficiary dies more than six months after the
date of the Participant’s death and before the
entire portion of the Investment Account allocated
to him has been paid pursuant to this Subsection
10.6.2,then the remainder of such portion shall be
paid,to the estate of the deceased Category A
Beneficiary.Any payment under this paragraph
shall be made in a lump sum on the first day of the
third calendar month following the month in which
the death of the Category A Beneficiary occurs.
The Participant may designate a trust as his
beneficiary under the Plan.However,in that case,
any beneficiary of the trust,who is eligible to
receive trust distributions on account of payments
from the Plan,shall be deemed to be a Category A
Beneficiary under the Plan.(For example,if the
Participant designates as his beneficiary a trust
of which his surviving spouse is the life
1/20/94 14
beneficiary,and elects lifetime payments under
option (2)(a)above,then for the purpose of this
Subsection 10.6.2,the surviving spouse shall be
deemed to be the Category A Beneficiary,and the
terms of this subsection shall be applied by basing
distributions on the life expectancy of the
surviving spouse.)Notwithstanding the foregoing,
however,a trust may only be designated as a
beneficiary (and the beneficiary of the trust will
only be deemed to be a Category A Beneficiary)if,
as of the later of the,date that the Participant
submits to the Employer the election in which the
trust is named as a beneficiary or the Required
Beginning Date,and as of all subsequent periods
during which the trust is named as a beneficiary of
the Plan,all of the following conditions are met:
(1)the trust is a valid trust under state law,(2)
the trust is irrevocable,(3)the beneficiaries of
the trust can be identified from the trust
instrument,and (4)a copy of the trust instrument
has been provided to the Employer.
10.6.3 Default Provision If,upon the death of the
Participant,there exists neither a Category A
Beneficiary nor a Category B Beneficiary to receive
any portion of the Participant’s Investment
Account,then the Employer shall,on the first day
of the third calendar month following the month in
which the death of the Participant occurs,pay that
portion in a lump sum to the estate of the
Participant.
10.7 General Distribution Requirements and Provisions
Notwithstanding any other provision of this Plan to the
contrary,all distributions under this Plan shall be made
in accordance with the provisions of this Section 10.7
and,to the extent of any inconsistency,the provisions
of this Section 10.7 shall control.
10.7.1 Calculation of Life Expectancy For the purpose of
ascertaining the relevant distribution periods and
amounts hereunder,life expectancy,where
applicable,shall not be recalculated annually.
Rather,once life expectancy has been initially
calculated,it shall thereafter be reduced by one
year for each year that passes.
10.7.2 Additional Distribution Requirements Any payments
payable over a period of more than one year shall
only be made in substantially non-increasing
1/20/94 15
amounts,paid~not less frequently than annually.
10.7.3 Employer Discretion to Accelerate Distributions
After distributions have begun hereunder,if the
balance of the Participant’s Investment Account,or
any portion thereof payable to a beneficiary,
should equal $3500.00 or less,the Employer,in its
sole and absolute discretion,may distribute such
balance or such portion in a lump sum on the date
of the first regularly scheduled payment of the
next calendar year.If at any time the Employer
determines that the payment schedule as elected by
the Participant,or by the Category A Beneficiary,
if applicable,is such that monthly payments would
be in an amount less than $200.00,then the
Employer,in its sole and absolute discretion,may
make distributions in the amount of $200.00 per
month,until exhaustion of the Investment Account
or portion thereof in question,irrespective of the
fact that this would have the effect of shortening
the distribution period originally elected by the
Participant,or the Category A Beneficiary,if
applicable.
10.7.4 Statutory Compliance All distributions under this
Plan shall be made in accordance with the Treasury
Regulations under Internal Revenue Code section
401(a)(9),including both the minimum distribution
requirements of Treasury Regulation section
1.401 (a)(9)-i,and,(in accordance with Internal
Revenue Code section 401(a)(9)(G))the minimum
distribution incidental benefit requirements of
Treasury Regulation section 1.401(a)(9)-2.To the
extent that any distribution option hereunder is
inconsistent with Internal Revenue Code section
401 (a)(9),the provisions of Internal Revenue Code
section 401(a)(9)shall control and the Plan shall
be administered so as to conform with section
401(a)(9).Notwithstanding the foregoing,however,
if,pursuant to Internal Revenue Code section
457(d)(2)(B)(i)(I),Treasury Regulations (the
“Superseding Regulations”)should be issued which
require more rapid distributions than those
required by Internal Revenue Code section
401(a)(9)(G)and the Treasury Regulations under
section 401 (a)(9)(G),then the distributions under
this Plan shall be made pursuant to such
Superseding Regulations,to the extent inconsistent
with section 401(a)(9)and the Treasury Regulations
under that section.
1/20/94 16
SECTION 11:Emergency Withdrawals In the event of an
Unforeseeable Emergency,to be determined by the Employer in its
sole discretion,the Employer may pay to the Participant all or any
portion of the amount in such Participant’s Investment Account,as
of the month end following the date when such determination is
made.Payment may not be made to the extent that the hardship
resulting from the Unforeseeable Emergency is or may be relieved
(a)through reimbursement or compensation by insurance or
otherwise,(b)by liquidation of the Participant’s assets,to the
extent the liquidation of such assets would not itself cause severe
financial hardship,or (c)by cessation of deferrals under the
Plan.The amount that may be paid out is limited to the amount
reasonably necessary to alleviate the Unforeseeable Emergency need
and,in most cases,will be paid only in a single lump sum.In the
event of an Unforeseeable Emergency which causes the initial lump
sum payment to be inadequate to meet the Unforeseeable Emergency
need,the Participant (or former Participant)may apply for the
payment of subsequent lump-sum amounts,up to the entire amount in
the Participant’s (or former Participant’s)Investment Account.
Any distribution under this section shall be deemed a
termination of the election to defer compensation under Section 4.4
above,and no further deferral of compensation shall be made unless
the Participant subsequently re-elects to defer compensation under
the Plan,as provided in Section 4.4.Moreover,any distribution
of 100%of the Participant’s Investment Account under this section
shall be deemed a revocation of the Participant’s agreement to
participate in the Plan.The (former)Participant may re-elect to
participate in the Plan,pursuant to Section 4.1,after a lapse of
not less than three (3)months.
SECTION 12:Non-Assignability Clause Consistent with
Section 8 above,no one,including the Participant,his beneficiary
or designee,or any other person,shall have any right to commute,
sell,assign,transfer,or otherwise convey the right to receive
any payments hereunder,which payments and right thereto are
expressly declared to be non-assignable and non-transferable.The
Employer shall have no liability to either the Participant or a
purported assignee or transferee,on account of any attempted
assignment or transfer.In addition,except to the extent
otherwise provided by law,no interest of the Participant in the
Plan shall be subject to attachment,garnishment or execution,or
be transferrable by operation of law,whether due to bankruptcy,
insolvency,liquidation for the benefit of creditors,or any other
cause.
Notwithstanding the foregoing,however,the amounts deferred
by a former Participant may be transferred to another Internal
Revenue Code section 457 eligible deferred compensation plan of
which the former Participant has become a participant,if the
1/20/94 17
following conditions are met:
(1)the plan to which the former Participant wishes to
transfer amounts deferred is located within the State of
California;
(2)the plan receiving such amounts provides for the
acceptance of such amounts;
(3)the employer accepting the transfer funds gives
written notice of its agreement to accept such transfer
and assumes liability therefor;and
(4)the Participant provides a written release to the
Employer releasing the Employer from any claim or
liability under the Plan after the date such transfer of
funds occurs.
If a Participant separates from service in order to accept
employment with another entity which permits the Participant to
participate in a section 457 eligible deferred compensation plan,
and if the four conditions enumerated above are met,payout of
benefits will not commence upon separation from service,
notwithstanding any other provision of the Plan,and amounts
previously deferred will automatically be transferred to that other
entity’s section 457 eligible deferred compensation plan,to be
credited to the Participant’s account.
SECTION 13:Notice Any notice or other communication
required or permitted under the Plan shall be in writing,and,if
directed to the Employer (ATTN:Director of Finance),shall be sent
to the Employer at its principal office,and,if directed to a
Participant or a beneficiary,shall be sent to such Participant or
beneficiary at his last-known address as it appears on the
Employer’s records.Such notice shall be deemed given when mailed,
unless notice is given in person,in which case such notice shall
be deemed given upon receipt.
SECTION 14:Amendment or Termination of Plan The Employer
may,at any time,terminate this Plan for all Participants.Upon
such termination,the Participants in the Plan shall be deemed to
have withdrawn from the Plan as of the date of such termination;
each Participant’s full Salary on a non-deferred basis will be
thereupon restored;and the Employer agrees to pay each Participant
the amount of money determined as if the Participant had terminated
his employment,said payment to be made in accordance with the
provisions of Section 10.2.
The Employer may also amend the provisions of this Plan at any
time;provided,however,that no amendment shall affect the rights
1/20/94 18
of the Participants or their beneficiaries to the receipt of
payment of benefits,to the extent of any compensation already
deferred at the time of the amendment,as adjusted for investment
experience prior to and subsequent to the amendment.
The Employer hereby establishes,on the terms and conditions
set forth above,the County Sanitation Districts of Orange County,
California Deferred Compensation Plan as Amended 1994.
DIS:lw:D:lO/19/92 (L495PN)
R:lO/2l/92;R:3/5/93;R:7/20/93;R:8/31/93;R:lO/8/93;R:l/20/94
1/20/94 19
STATE OF CALIFORNIA)
)SS.
COUNTY OF ORANGE )
I,PENNY KYLE,Assistant Secretary of the Boards of
Directors of County Sanitation Districts Nos.1,2,3,5,6,7,
11,13 and 14 of Orange County,California,do hereby certify
that the foregoing Resolution No.94-39 was passed and adopted at
a regular meeting of said Boards on the 13th day of April,1994,
by the following vote,to wit:
AYES:Fred Barrera,George Brown,A.B.Catlin,
John Collins,John C.Cox,Jr.,Jan Debay,
Barry Denes,Burnie Dunlap,Norman Eckenrode,
James Ferryman,James Flora,Don R.Griffin,
John N.Gullixson,Barry Hammond,Evelyn Hart,
Victor Leipzig,Wally Linn,Thomas Lutz,
William D.Mahoney,Pat NcGuigan,Ted Moreno,
Linda Moulton—Patterson,Carrey J.Nelson,Richard
Partin,Leslie Pontious,Charles E.Puckett,
Miguel Pulido,Margie L.Rice,Thomas R.
Saltarelli,Phil Sansone,Sal Sapien,
Roger Stanton,William G.Steiner,Peer Swan,
Charles E.Sylvia,James Wahner,Daniel T.Welch,
Grace Winchell,George L.Ziaket
NOES:None
ABSENT:Irv Pickler
IN WITNESS WHEREOF,I have hereunto set my hand and affixed
the official seal of County Sanitation District No.1 on behalf
of itself and Districts Nos.2,3,5,6,7,11,13 and 14 of
Orange County,California,this 13th day of April,1994.
Penny Ky ,
~s stint Secretary
Boards o ir c ors,County
Sanitation Di rictsNos.1,2,3,
5,6,7,11,13 and 14 of
Orange County,California