HomeMy WebLinkAboutCSDOC Resolution 1998 - 0016RESOLUTION NO.98-16
APPROVING VALIC ADMINISTRATIVE SERVICES
AGREEMENT AND GROUP ANNUITY CONTRACT
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 VALIC ADMINISTRATIVE SERVICES AGREEMENT
AND GROUP ANNUITY CONTRACT
WHEREAS,the County Sanitation Districts Nos.1,2,3,5,6,7,11,13,and 14 of Orange
County,California (the “Districts”)have employees rendering valuable services;
WHEREAS,the establishment of a deferred compensation plan for such employees
serves the interests of the Districts by enabling the Districts to provide reasonable retirement
security for District employees,by providing increased flexibility in the Districts’personnel
management system,and by assisting in the attraction and retention of competent personnel;
WHEREAS,by Resolution No.94-39,adopted by the Boards of Directors on April 13,
1994,the Districts approvec4 and adopted the County Sanitation Districts of Orange County,
California Deferred Compensation Plan as Amended 1994;by Resolution No.95-80,adopted by
the Boards of Directors on July 26,1995,the Districts approved and adopted the first
amendment to such plan;and,by Resolution No.98-07,adopted by the Boards of Directors on
March 25,1998,the Districts approved and adopted the second amendment to such plan.(The
1994 complete amendment,the 1995 first amendment and the 1998 second amendment are
hereinafter collectively referred to as the “Plan”);
WHEREAS,the Boards of Directors desire to offer Plan Participants the opportunity to
choose among Plan administrators;
WHEREAS,the Boards of Directors have determined that the selection of The Variable
2092-700
63101_i WS&S
June 2,1998 1 CIean Draft No.1
Annuity Life Insurance Company (“VALIC”)as one of the Plan administrators,whose services
Plan Participants may choose to utilize,serves the above objectives;and,
WHEREAS,the Boards of Directors desire that the Plan be administered by VALIC,to
the extent of Plan assets delivered to VALIC,and that the funds delivered to VALIC be invested
pursuant to a group annuity contract between VALIC and the Districts.
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 The Districts,as trustee of the Plan,are hereby authorized to apply for
and obtain a group annuity contract,between VALIC and the Districts,in substantially the form
attached hereto as Exhibit “A”and incorporated herein by reference (the “Group Annuity
Contract”),with the intention that the Group Annuity Contract be operative with respect to any
Plan assets to be invested in the Group Annuity Contract,at the election of Plan Participants.
Section 2 Pursuant to Section 8 of the Plan,the assets of the Plan are held in trust,
with the Districts serving as trustee,for the exclusive benefit of the Plan Participants and their
beneficiaries,and such assets shall not be diverted to any other purpose.The Plan trustee’s
beneficial ownership of Plan assets held in the Group Annuity Contract shall be held for the
further exclusive benefit of the Plan Participants and their beneficiaries.
Section 3 Section 15 of the Plan permits the Districts to establish a loan program
under the Plan.The Districts have not yet established any such loan program.At such time as
the Districts do establish a loan program,pursuant to Plan Section 15,the Districts shall so
inform VALIC,so that VALIC may,with respect to the Plan assets invested in the Group Annuity
Contract,administer the loan program consistent with Plan Section 15.
Section 4 The Districts hereby authorize the General Manager to execute,on behalf
2092-700
63101_i WS&S
June 2,1998 2 ~CIean Draft No.1
I.
of the Districts,the Administrative Services Agreement,attached hereto and incorporated herein
by reference as Exhibit UBU between the Districts and VALIC,for the provision,by VALIC,of
administrative services under the Plan.
Section 5 The Director of Human Resources shall:(a)be the coordinator for this
program;(b)receive necessary reports,notices,etc.from VALIC;(C)have the authority to
assign,to the appropriate District personnel,administrative duties to carry out the Plan;and (d)
have the authority to execute all necessary documents with VALIC incidental to the
administration of the Plan,other than the Administrative Services Agreement itself,or any
amendment thereto.
PASSED AND ADOPTED at a regular meeting held June 24
,
1998.
2092-700
63101 1 WS&S
June 2,1998 3 ‘Ctean~Draft No.1
STATE OF CALIFORNIA )
)SS.
COUNTYOF ORANGE )
I,PENNY M.KYLE,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.98-16 was passed and adopted at a regular
meeting of said Boards on the 24th day of June,1998,by the following vote,to wit:
AYES:Steve Anderson;George Brown;John Collins;Barry Denes;
Shirley Dettloff;Harry M.Dotson;Burnie Dunlap;Norman Z.
Eckenrode;Jan Flory;John M.Gullixson;Mark Leyes;Patsy
Marshall;Pat McGuigan;Darryl G.Miller;Eva Minor-Bradford;
Mark A.Murphy;John E.Noyes;Arthur Perry;Anna L.Piercy;
Margie L.Rice;Thomas R.Saltarelli;Christina M.Shea;Todd
Spitzer;William G.Steiner;Dave Sullivan;Charles E.Sylvia;Bob
Zemel
NOES:None
ABSENT:None
IN WITNESS WHEREOF,I have hereunto set my hand and affixed the official
seal of County Sanitation District No.I on behalf of itself and Districts Nos.2,3,5,6,7,
11,13 and 14 of Orange County,California,this 24th day of June,1998.
PennyM~Secret’~
Boards of Directors,C ty Sanitation
Districts Nos.1,2,3,5,6,7,11,13 and 14 of
Orange County,California
H:~wp.dta\admIn\BS\FORMS\1 998\F1 2.1 64oc
JUN-IS-SB 10:10 FROM:OCSD-HUMAN RESOURCES ID:7149620427 PAGE 2/4
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The V3riab&e Annuity
tie Insuran~Con~aiy
2929 Allen Pztbeay
Nos~n.Te~taa 77019
In r~am for Purdiase Payn~nt~S),VAUC YJ~pay annu~y and aete’~prcvtd~d ~i this wthacZ~
PLF~~READ Y~JR c~.TvAcT c*~LLY
Se~l~onPage2
•~Charge -Thee ~no a~m~sanoo diorge.
•~p.i~#P’~O’~t Ch~ig~ThO(*i~*d~Y charge agá~et !le S~Awit at an avoa~sale
rangrng from 1%b 1.2E~of ~e av~dafly net ~et value ~th Sepas~e ~d.based upon
th Vastable hivo~nent Oo?~i ~w$~a~e~are aPo~i~This d~o onty a~’~e~I~
undor Va~.*U~vS5fte’~Oo~So.Sec~an 2..OS for a ~.s~my~o ~
•Cash Swien*f or W~M.~I Ch~gz~Ths.’o is a ch&ge at the ~ne of urr~endoc or
for bJIL!~fer fo another handing en~or for piapcirsis oth~than t~pmiáde Paitic~ant benoflb .qu&to
5%of (I)the amount yiith~wr’.~r (il)the ar~int of aiy Pwdiase Paymants re~vid dwirg the
most r~t 60 months par to the ~nrender or bthaanal,w*~di~is l~.So.S~-~-4.~
thraugl~4.C5 for a ~o~’p’~~des~~i and
The c~s~R~and pmwisMis o~~iis and the
VAUC a’~~‘e Con~Owner.No agent b~
pi~On’y The Pres.~ni or a Vt~Pmident of VALIC m~’
thang~must beli iw~g.M cm~noas and p~uns are subec~to apci~ca~e stab laws.
6~JTa~ATVALJ~S HOME OFRCE ON TP€~OF lS~JE~.
2r~~
~O4UITv ~AVMB~AND S.~aD~VALUES ~By 11es COnTRACT .B~ON W4ESTMBIT
~OF ThE ~CPANA1E 4sCOI~T A~VA~AOLE MIO ARE i~T CU*RNl1~AS TO ~OOU*R
AMOUNt~
~UD I~AND VAIe*BLEDaERRED AHIftflTY cONTRACT
lN~V~JALALLOCATEo~
~ase-svw~c
11 ‘12:39 7138315835 P~02
DAtE OF ~UE
any of
Any w~
wn
JUN 16 ‘98 10:28 714962042?PAGE.02
05’11’98 14:36 6 P S 9 ANAHEIM NO.848 Peø3/~13
ction I DEFINmONS_________________
section 2 CONTRACT AND PURCHASE
PAYMENTS_________________
3.06 Transfers During the Annuity Peviod_
ection 4 BENEFITS_________________
4.01 Cash Surrender__________________
4.02 WIthdrawals___________________
4.03 Charges for Cash Surren~ur or
Withdrawal______________
4.04 Conditions Under Which No Surrender or
Withdrawal Charges Wifi Be Dedu~ed_
4.05 Annuity Priad________________
4.06 Starting Annuity Income Benefits
—
4.07 Partial Annuitization_______________
4.08 Minimum Annuity Payments__________
4.09 Misstatement of Age_______________
4.10 Annuity Income (Payment)Options____
4.11 Fixed or Variable Annuity Basis_______
4.12 Variable Annuity Payments_________
4.13 Assumed lnvesbvtent Rate (AIR)_______
4.14 AnnuIty Units and Annuity Unit Value
4.15 Betterment of Rates_______________
4.16 Annuity Rate Tables______________
4.17 Beneficiaries____________________
4.18 Death Payment Prcvision~__________
Section 5 CODE REQUIREMENTS AND
RETIREMENT PLAN PROVISIONS
5.01 Salary Reduction Purchase Payments_
5.02 Minimum Dis~ibutions After Age 70 112_
5.03 Minimum Death Benefit Distributicns
5.04 Direct Roltovers________________
5.05 Plan Provisions_________________
5.05 Nonquaf~fied Deterred Compensation
Section 6 GENERAL PROVISiONS__________
6.01 Participant Certificates______________
6.02 Assignment
6.03 VeSting___________________
6.04 Wriften Notices to Us_____________
6.05 Change of ConDact________________
6.06 Future Participants___________
6.07 Reports____________________
6.08
6.09
6.10
6.11 Proofo!Survival_________________
6.12 Substitution of Investment Fund
Shares_________________________
6.13 Minimum Benefit____________________
6.14 Separate Account________________
UITG.1 94.SW
2
INDEX
2.01
2.02
2.03
2.04
2.05
2.08
~ecthon 3
3.01
3.02
3.03
3.04
3.05
Incontestability_________________
Minimum Contract Value__________
Plan Provisions________________
Purchase Payments______________
Maintenance Charge___________
Separate Account Charge_________
INVESTMENT OPTIONS________
Fixed Interest Options______________
Variable Investment Options_________
Acajmulation Unit_________________
Accumulation Unit Value_________
TransfeTs During the Accumulation
Period
Plans
3
S
3—
3
3
3
3
4
4
4
4
4
4
5
6
6
6
6
6
7
7
7
7
7
7
7
8
8
8
8
8.13
13
13
15
15
15
15
16
15
16
17
17
17
17
17
17~
17
17
17
17
17
17
17
17
18
MAY 11 ‘98 12:39 713 831 6035 PAGE.03
re ‘3O~d S209 I~B ~t’t~’:~I 86.tT AdN
•Section 1 -DEF1NmONS
Accumulation Period -the nine between the date of
a first Purcnase Payment and the Annuity Date I or a
•
articipant
A~cumulation Value -equals the sum of the values
of the Fixed Interest Options and Variable Investment
Options allocated to a Participant Account that have not
been applied to provide annuity payments.
Annuity Period -the time during Which VAUC
makes annuity payments.
Certificate Year .a twelve month period starting with
the issue dale of a Panicipant~s certificate and each
anniverswy of that date.
Code-the Internal Revenue Code 01 1986.as
amended.
Company Reference -1W.,Our ‘Us or
VAUCS miens The Variable Annuity Life Insurance
Company.
Contract Owner -the employer or other entity that
makes application for the Contract.
Investment Fund -an investment porttolio which is
the underlying inves~nont medium for a Variable
Investment Option.
Perticipant -a person for whom or with respect to
whom Purchase Payments are made under the Contract.
Participant Account -an individual account which is
estabhshed for a Par~cipant to record the Accumulation
Value for the Participant
Plan -the employer-sponsored retirement plan.
annuity purchase arrangement,or deferred compensation
program for which this Contract is issued.
Purchase Payment -an amount paid to VAUC for
allocation to a Participant A~~nt
Separate Account -a segregated asset account
established under the ‘Texas Insurance Code (known as
Separate Account A).
Sunender Value the Accumulation Value of a
Participant Account less any applicable surrender charge.
Section 2-CONTRACT AND PURCHASE PAYMENTS
2.01 Incontestability-This Contract is incontestable.
This Conbact is non-participating and does not
share in the profits or surplus of VAUC.
2.02 MinImum Contract Value -We can disbibute the
Surrender Valu.if the Accumulation Value for the
Participant Account falls below $300 and there are
no Purchase Payments for two Certificate Years.
UITG.1 94-S WMC
3
2.03 Plan Provisions .As further explained in Sachon
5.this Contract is subject to the provisions of the
Plan.To the extent provided by the Plan,any rights
that may be exercised by a Participant under this
Contract may instead be exercised by the Contract
Owner or a Plan representative.
2.04 Purchase Payments -Purchase Payments may
be made at any time during the Accumulation
Period and may include amounts that are rolled
over or directly transferred from another plan.We
require no payment beyond the first There is no
penalty if any scheduled payments are omitted or
stop—.
If only on.Purchase Payment is to be allocated to
a Participant’s Account.it must be at least $1,000.
Periodic payments must bi at least $30 each.
VAUC may waive this rnnwnum.
We may deduct amounts from Purchase Payments
or tram the Accumulation Value for applicable
premium taxes.We will allocate the net Purchase
Payment to one or more Investment Options
according to the Participants directions unless the
Contract Owner has retained that right under the
PIwi.
2.05 Maintenance Charge -Thur.is no maintenance
General Account .the assets of VAUC other than
those in the Separate A~unt or any oItiir segr ~I’I ~~~te Account Charge We deduct a daily
from the Separate Account The amount of
the charge depends on the Variable InvestmentHomeOffice-tite principal office of
Option from which it is deducted,and is imposed at
an annual rate which ranges from 1%to 1.25%of
the assets of the Variable Investment Option.
8e8’teed sPe’ON WI3H~N~~-S d S ~P:~86/~t/~8
05/11/98 14:36 C P S +ANAHEIM NO.848 P004/013
Section 3-INVESTMENT OPTIONS
We wUl allocate Purchase Payments (less any charges)
to one or more Investment Options selected by the
Participant.We reserve the right to limit allocations
among Investment Options to seven at any one time.
Each selection must be a whole percentage of Purchase
Payments.
3.01 Fixed interest Options -Fixed Interest Options
are based on the General Account.Allocations to
Fixed Interest Options earn interest as credited by
VAUC dunng the Accumulation Period.The
interest credited will be at least 3%per year.
There are two Fixed Interest Options:Short Term
Fixed Account and Fixed Account Plus.
(a)Short Term Fixed Account We will credit
interest to the Short Term Fixed Account on a
portfolio bazix.On the portfolio basis,all
amounts accumulated will be credited with
the same rate of interest for the current
period.
(b)Fixed Account Plus We will credit interest to
the Fixed Account Plus on the foliowing
base.Periodically,but not less than annual
ly.We will dadare interest rates that apply
separately to amounts accumulated in sepa
rate time periods.
3.02 Variable Investment Options -Variable Invest
ment Options are based upon Investment Funds
available within Separate Account A.Separate
Account A invests in a number of Investment
Funds.Each Investment Fund underlying a Vari
able Investment Option has a different investment
objective.Investment returns on Variable
Investment Options may be positive or negative.
3.03 AccumulatIon Unit .An Accumulation Unit is a
measuring unit for amounts allocated to a Variable
Investment Option before annuity payments begin.
The value of ai~Accumulation Unit will vary with
the net invesvnent return at the respective under
lying Investment Fund.Accumulation Units may be
credited to the Participanrs Account due to a
Purchase Payment or a transfer from another
Investment Option.The number of Accumulation
Units credited to the Paiticipanf a Account is deter
mined by dividing the dollar amount of the bans-
action by the Accumulation Unit Value for that
Variable Investment Option at the next time it is
computed.
3.04 Accumulation Unit Value -The Accumulation Unit
Value is the value of one Accumulation Unit of a
variable Investment Option.We will calculate it ax
the end of trading each day the New York Stock
Exchange is open,except as otherwise permuted
by the Securities and Exchange Commission.The
value of an Accumulation Unit of a Variable Invest.
UITG-194-SW
4
ment Option is the Accumulation Unit Value last
computed,multiplied by one plus the Investment
Rate for the period.The Investment Rate may be
positive or negative.
The Investment Rate is the change in the value of
the Investment Fund’s portfolio (capital gains and
losses whether or not realized and investment
income)since the last computation,divided by the
amount at assets at the beginning of the period.
less a factor for
(a)the Separate Account Charge for the period
at the applicable annualized rate ranging
from 1%to 1.25%.and
(b)any taxes awibutable to the Separate
Account or reserve held for such taxes.
3.05 Transfers During the Accumulation Period -
During the Accumulation Period,the Participant
may transfer amounts among Investment Options,
except as provided below.
(a)We reserve the right to limit allocations
among Investment Options to seven at any
one time.
(b)We rewve the right to require transfers to
be at least 30 days apart
(c)Transfers from the Short Term Fixed
Account After a transfer to the Short Term
Fixed Account,the Participant may not make
any O’ansfer from the Short Term Fixed
Account for 90 days.We may change this
transfer restriction at any time.However,the
transfer restriction period may not exceed
180 days.
(d)Transfers from Fixed Account Plus The Part.
i~pant may transfer up to 20%of the Accum
ulation Value allocated to Fixed Account Plus
~
to determine the 20%transfer limit for that
Certificate Year.For each transfer,the
percentage transferred is the ratio of the
amount transferred to the portion of the
Ac~mulsticn Value allocated to Fixed
Account Plus immediately prior to the
transfer.However,it following a 20%
transfer,the remaining amount allocated to
Fixed Account Plus would be less than $500,
the Participant may transfer the remaining
amount.
MAY 11 ‘98 12:40 713 832.6035 PAGE.04
S~ø9 T~B ~TL t’t’:~T 86~IT AbW
•3.06 Transfers During the Annuity Peilod -During
the Annuity Period,the Parbciparit may transfer
Annuity Unit values amon9 the Variable Investment
OptIons.The Part~c~pant may ~lsp transfer Annuity
Unit values f
underlying a
Annuity.Transfers
apait We wiil not permit any transfer from
Annuity dunng the Annuity Period.
.1
UITG.1 94-SW
S
8øø/~øød 6P80N I4I~H~N~~.S d 9 rp:~’I 8G/TI/~
Ø5’1~.’9~j4:37 0 P S 4 ANAHEIM NO.848 Pa05/013
Cash Surrender -Subject to the restrictions in
Sections 5.01 and 5.05.the Participant may
surrender the Participant Account before the
Annuity Date for a cash payment equal to the
Survender Value as of the date We receive the
request at the Home Office.The Surrender Value
is the Accumulation Value less any charges,as
deathbed below.
The Surrender Value of the Fixed Interest Options
will never be less than the amount of all Purchase
Payments allocated to the Fixed Interest Options,
lose any amount transferred to Varisbic
lnvesteient Options or withdrawn.
4.02 WIthdrawals -Subject to the re~thctiona in
Sections 5.01 and 5.05,the Participant may
withdraw a portion of the Accumulation Value in
cuh at any time before the Annuity Data.We may
deduct a charge as desoribed below.
4.03 Charges for Cash Swreraler or Withdrawal
(a)General The Cash Surr~ndar or Withdrawal
charges under thus Contract will not apply
unless ha ConV’act Owner makes a
surrender or withdrawal for ban*f Sr to
another funding entity or for purposes other
than to piuvid.Paflicipam benefits under the
applicable Deferred Compensadon Plan.The
charge is 5%01(1)the amount withdrawn,or
(2)the amount of any Purchase Payments
received during the most rscent 60 months
prior to the surrender or withdrawal,
whichever es less.
For purposes of this charge.We treat
withdrawals as withdrawals of Purchase
Payments before any earnings.We beat the
most recent Purchase Payments as being
Withdrawn first.
(b)10%WithdraWal in Certificate Year Subject
to the prov~ions of Sections 4.04ind 405,
in any Certificate Year the Participant may
withdraw up to 10%of the Acmulalion
Value without a charge.The surrender
charge will be applicable only to th.amount
withdrawn that exceeds 10%.Tb.
percentage withdrawn will be cabjiatad as
the ratio of the amount withdrawn to the
A~mnutation Value immediately prior to the
Withdrawal.If multiple withdrawals are made
in a Certificate Year,the percentages
withdrawn for each withdrawal will be added
together to detemune whether the 10%limit
has been exceeded.
4.04 Conditions Under Which No Suneruder or
Withdrawal Chargee Will Be Deducted W•wili
not deduct charges from a participant Account
urTG.1 94.SWOC
6
under any of the fofiowing conditions:
(a)The Participant elects an Annuity Income
Option:or
(b)After the death of the Participant or
(c)The Participant has become totally and
permanently disabled.This means that the
Participant is unable,because of physical or
mental Impairment,to perform the material
end substantial duties of arty occupation for
which the Participant is suited by means of
education.training or •zpsn.nce.Th.
ünpaument must have been in existence for
mor.than 180 days to qualify for this benefit
Such impairment must be .to result
in death or be long-standing and indefinite.
W.require proof of disability.We will eccept
a certified Social Security finding of disability
or a dootør~s verification;or
(d)The withdrawal and any earlier withdrawals
from the Participant Axount during the same
Certificate Year do not exceed 10%of the
Accumulation Value (see Section 4.03);or
(•)The Participant is separated from s.,vi~
with the employer that maintains the Plan;or
(1)No Ptn~tas.Payments ware made to the
Participant A nv.years
e uwend.r.or
(9llzyearaotd
and the Participant Account was established
at least five years before he data of the
surrender or withdrawal:or
(h)The Participant Account was eetabfushed at
lust fifteen years befor.the date of the
surrender or withdrawal:or
(i)The Participant is retired from service with
th,.mptayer that maintains the Plan;or
(j)To the extant that a withdrawal or surrender
is made on a~unt of an unforeseen
emergency under the teens of the
employer’s Plan.
Th.surrender charge may be waived or reduced
uniformly on all Participant Accounts for conv~cts
issued under certain plaits or arrangements which
—.expected to result in adnunslrathre cost
savings.No reduction or waiver will be mad.that
is unfairly discriminatory to any person.
We may waive any withdrawal or surrender charge
attr~utable to Purchase Payments received during
specific periods at time,and under conditions and
limitations set by Us.Any such waiver will be made
by Resolution of the Board of Directors.Notice of
the right to surrender Without charge will be milled
to the Contract Owner when such waiver is
declar.d by the Board of Directors.
~I.
Section 4-BENEFITS
401
MAY 11 ‘98 12:40 713 831 6035 PAGE.05
~8 £I~£t’:?T 86.IT ~WN
4.05 Annuity Period -The Annuity Period begins at the
Annuity Dale.when the Participants Accumulation
Value is applied under an Annuity Income Option.
The Participant may change the Annuity Date
shown on the first page of the Participant
Certificate by giving Us at Least 30 days note.
The selected Annuity Date may be the first day-of
any calendar month.but it the Participant chousas
a life income option.the Annuity Date may not
precede the Participants 50th birthday without Our
permisalen.
4.06 Starting Annuity Income BenefIt At least 30
days in advance of the Annuity Date,the
Parti~pant must choose one at the Annuity Income
Options in Section 4.10 and provide acceptable
proof of age for any person whose age is taken
into aount under a life income option.If th.
Participant fails to select another Annuity Income
Option.annuity payments will b.made on the
basis at the Second Option with payments
guaranteed for a ten-year period,commencing on
the Annuity Date.Th
r—~~i~
4.07 Partial Annu’-.
I
choose to apply
Value under an Annuity Income Option and may
choose different Annuity Dates and different
Annuity Income Options for different portions of the
Accumulation Value.Th,r.førs,the Contract may,
at times.be in both an A~~mulation Period and an
Annuity Period.If the Participant chooses to do
this,the provisions of the Convact relating to the
Accumulation Penod,and the Annuity Period will be
applied as though there were separate Contracts.
4.08 Minimum Annuity Payments -The Participant
may not choose any Annuity Income Op~on if the
resulting initial payment would be less than $25
under either a Fixed or Variable Annuity.We
reserve the right to convert monthly payments to
quarterly,semi-annual or annual payments so the
initial payment will be at least $25.
4.09 Misstatement of Age -If annuity payments
depend upon an individual’s survival arid the date
of birth of any individual was misstated,We will
adjust the remarning payments.The amount
remaining to be paid will be the amount that should
have been paid with the correct intormaaon.We
will credit or charge the amount of any
underpayment or overpayment against the next
succeeding payment or payments,if any remain.
We reserve the right to collect any overpayment
directly from the payee.
4.10 Annuity Income (Payment)Options .The
Participant may choose to receive payments under
any of the Annuity Income Options below or any
other option agreed to by VAUC.Any option
chosen must comply with applicable state and
federal laws and regulations.
FiRST OPTiON .Life Annuity With No Guarantee
Period -An income payable during the Partic
ipants life.All payments cease at the Participants
death with ito further amounts payable.
SECOND OPTiON -Life Annuity With Guarantee
Period of 5.10.15.or 20 Veers -An income
payable dwutg the Participants life.If,at the
Participant’s dsath.We have made payments far
fewer than the number of years selected,We wIll
continue payments to the Beneflciasy tar the
remainder of the guarantee period.
‘THIRD OPTION -Life Annuity With Cash or Unit
Refund Option -An incime payable dunng the
Participants We.Payments ~ese at the
Participants death.However,the Beneficiary may
receiv,an additional payment
For payments on a Fuad Annuity basis,the
additional payment,ft any,will be the Accumulation
Value applied to this option less the total of all prior
payments.
For payments on a Variable Annuity basis,the
additional payment,it any.wifl be the current value
of the number at Annuity Units credited at the
Annuity Date less the number of Annuity Units that
have been paid.For this purpose,the number of
Annuity Units creditd equals the Accumulation
Value applied to this option divided by the Annuity
Unit Value at the date used to calculate the first
annuity payment
FOURTH OPTION -Joint arid Surviver Life
Annuity -An income payable duruig the joint lives
of vie Participant and a second person and
thereafter during the life of the survivor.
FIFTH OPTION -~ymants for a Designated
Period -An income payable for a selected number
of years between five and thirty.This option is
available for Fixed Annuities only.
4.11 Fixed or Variable Annuity Basis -A Fixed
Annuity provides benefit payments of a fixed dollar
amount.A Variable Annuity provides benefit
payments which vary with the investment return of
the chosen Variable Investment Options.
The Participant may elect to receive payments
under any annuity option as a Fixed Annuity.a
Variable Annuity.or a combination Fixed and
Variable Annuity.It the Participant malies no
election,amounts in Fixed Interest Options will
provide a Fixed Annuity and amounts in Variable
Investment Options will provide a Variable Annuity.
Ufl’G.194-SW ~cois”
eg~/~ged 6~8’ON NI~H~N~*‘S d 9 T~:t’T 96/TI/GO
05’11/98 14:3?G P S 9 RNAHEIM NO.848 PeeS~’813
4.12 Variable Annuity Psyments -We will determine
the amount of each Variable Annuity payment by
multiplying the number of Annuity Units payable by
the Annuity Unit Value on the tenth day (or the
preceding business day if the tenth day is not a
business day)prior to the payment due date.
We will determine the number of Annuity Units
payable at the beginning of the Annuity Period.We
will divide the dollar amount of the first payment by
the Annuity Unit Value for that Variable Investment
Option on the tenth day before the Annuity Date.
The number of Annuity Units payable from each
Variable Investment Option remains constant
unless the Participant transfers a portion of the
annuity benefit between the Variable Investment
Options or from a Variable Annuity to a Fixed
Annuity.However,the dollar amount.payable is
not fixed and may change from month to month.
4.13 Assumed Investment Rate (AIR)-Since the
future rate of return on Variable Options is un
known,the Participant must choose an Assumed
Investment Rate (AIR).The AIR ~the assumed
rate of return used to determine the first annuity
payment for a Variable Annuity Option.Rates of
3%,3 112%.4 1/2%,5%or a higher raze may be
chosen if pemiitted by state law arid regulations.If
no AIR is chosen,the AIR will be 31(2%.A higher
AIR will result in a higher initial payment.Cheice of
a lower AIR will result in a lower initial payment.
Payments will in~ease whenever the actual return
exceeds the chosen AIR.Payments will decrease
whenever the actual return is less than the chosen
AIR.
4.14 Annuity Units a~Annuity Unit Value -An
Annuity Unit is a measuring unit We use to deter
mine the amount of the annuity payments to be
made.All or a portion of the Accumulation Value is
used to purchase a stream of annuity payments
represented by a number at Annuity Units payable
each period.The value of these Annuity Units
represents the benefit amount paid each period.
For Fixed Annuity options the number of Annuity
Units equals the dollar amount of each payment
since the Annuity Unit Value is fixed at $1.00.
For Variable Annuity options,the Annuity Unit
Value varies with the investment rate each period.
The Annuity Unit Value is the value of one Annuity
Unit at an Investment Option.
The value of a Variable Annuity Unit is A multiplied
by B multiplied by C (AxBxC).
A —the Annuity Unit Value for the Variable
Investment Option at the immediately
preceding computation date
B —I .the Invesbnent rate for the variable
fund for the period
urTG-194-sw 8
C —the applicable AIR Factor from the
following table raised to the power of the
number of days in the period.
AIR AIR Factor
3%0.999919
31(2%0.999906
41(2%0.999879
5%0.999866
4.15 Betterment of Rates-Fixed Annuity -We will use
the applicable current settlement option rates if
these wiU provide higher fixed annuity payments to
the Participant.If a commutation (cash out of
remaining annuity payments)is allowed,the rates
previously used to calculate the annuity payments
will be used for the commutation request.
4.16 Annuity Rate Tables -The value We use to deter
mine annuity payments will be the applied portion
of the Accumulation Value on the tenth day (or the
preceding business day if the tenth day is not a
business day)preceding the date of the first annu
ity payment,less any applicable premium taxes.
The following tables are.based on the 1983a
mortality table and assume births in the year 1900.
The tables show the amount required to purchase
a first monthly payment of $1.00.Quarterly.
semiannual,and annual payments may also be
selected.
The amount of each payment will depend upon the
Annuitants adjusted age at the time the first
payment is due.Adjusted age will be determined in
a~rdance with the following:
Calendar Year
of Birth
________
After 1975
Actual age.as used above,means the Annuitants
age at the birthday nearest to the Annuity Date.
Table A is the Table to use for Variable Annuities
with a3%AIR (see Section 4.13)and to determine
the minimum guarantees for Fixed Annuities.
Tables B.C.and D are to be used for Variable
Annuities with 3 1/2%.4 1/2%and 5%AIRS
respectively.
Adjusted Age is
Actual Age Minus
0
1
2
3
4
NAY 11 ‘98 12:41 713 831 6035 PAGE.06
S~9 ~B £t~S~:~86~I~
TABLE A
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF *1.00
AT AN ASSUMED INVESTMENT RATE OF 3%
)ptions 1,2 and 3 -•Singte Life Annuities
Monsuy Paymen~Guirariteod
Ag.No.*60 120 180 240 Unit ReeunO
50 $250.48 $250.83 1251.98 $254.04 $257.21 $259.24
51 246.41 248.79 248-04 250.27 253.72 255.69
52 242.26 242.88 244.03 246.45 25021 252.09
53 23803 238.49 23995 242.58 240.69 248.43
54 233.73 234.23 235.81 23867 243.15 244.71
55 229.35 228.88 231.60 234.72 225.60 240.94
SB 224,89 225.46 227.32 ~.73 225.05 237.12
57 220.34 220.98 ~.S8 225.71 232.52 233.24
58 215.71 21638 218.59 2223$229.01 229.31
59 210.99 211.72 214.14 21033 235.54 235.33
60 205.19 206.99 209.83 214.50 222.12 221.26
201.30 302.10 205.08 210.42 218.75 217.19
62 196.35 191.31 20030 205.34 215.47 213.04
63 191.32 192.39 195.88 202.30 212.28 20883
84 18624 187.41 191.25 195.29 209.20 204.54
55 181.11 182.40 186.61
,
194.34 ‘:206.25 200.18
66 175.92 177.34 ~~81~9~U.~1~Q.44 -203.44 195.73
6?170.70 172.26 3 1 1t~~*r 200.79 191.41
96 155.43 167.15 IJ.~L~}198.31 186.93
6)160.13 152.01 98.179.39 196.00 182.35
70 154.79 158.86 163.56 175.85 193.89 178.01
71 149.41 151.71 15821 172.65 191.97 173.43
72 144.01 14858 154.85 188.54 190.26 168.01
73 138.61 141.44 190.59 168.51 188.73 154.48
74 133.21 136.3$148.45 163.88 187.41 159.83
75 127.84 131.33 142.46 161.36 165.26 155.46
on 4—Joint and Survivor Life Annuity
Young.r Mnui~s~t
Ago of O~d~r P4IlTT~If Of VOWS YOwig.rTtwi C~or As1nI~u
MnuiWfl 0 1 2 3 4 5 6 7 8 9 10
50 1280.54 1282.36 1284.24 1288.16 $288.12 $290.13 ~2.17 $29425 $286.35 1290.4?6300.61
SI 275.91 278.78 280.70 282.07 284.69 286.75 288.85 290.98 283.13 295.31 297.51
52 273.19 275.10 217.01 275.10 281.17 283.28 285.43 281.82 258.83 292.07 294.33
53 289.37 271.34 273.30 275.43 277.55 278.72 281.93 284.17 235.4.5 288.74 291.08
54 265.48 287.47 259.54 271.67 273.85 278.07 219.33 280.64 282.97 285.33 281.71
55 281.45 283.51 255.54 257.81 270.05 272.33 274.95 277.01 279.40 291.83 25421
56 257.34 259.46 261.63 263.86 266.15 258.49 27037 27328 275.75 278.23 280.74
57 253.13 255.30 257.5]258.82 262.16 284.56 257.00 269.48 272.00 274.55 277.12
58 248.52 251.04 253.32 255.67 258.07 260.53 263.03 285.58 268.16 270.77 273.40
59 244.40 24667 249.01 251.42 253.88 256.40 258.97 281.57 294.22 268.90 261.60
80 239.88 242.21 244.60 247.07 249.59 252.17 254.80 251.48 260.19 262.93 285Th
61 235.26 237.64 240.09 242.61 245.20 247.84 250.54 25328 256.06 258.87 281.71
62 ~.54 232.97 235.47 238.06 240.70 243.41 248.17 248.98 251.83 254.71 257.62
83 225.7~22819 230.75 233.40 236.11 238.86 241.71 244.58 247.50 250.46 253.44
64 220.79 223.32 225.94 228.54 231.41 234.25 237.14 240.09 243.08 248.10 249.16
65 215.78 216.35 281,02 223.73 22631 ~.51 232.47 235.49 235.55 241.55 24478
68 210.67 213.30 216.02 218.82 221.71 224.68 237.11 220.73 233.93 237.10 240.31
87 205.48 208.15 210.82 213.78 216.72 219.75 ~.34 235.00 ~.21 23245 235.74
68 20020 202.91 205.73 208.64 211.64 214.73 217.88 221.11 224.38 227.71 231.08
69 194.83 187.59 200.45 203.41 206.47 209.61 212.63 216.12 219,45 222.86 228.30
70 188.39 192.19 195.09 198.10 201.21 204.41 207.68 211,03 214.45 217.92 221.43
71 183.87 186Th 189.66 192.71 195.B7 199.13 202.45 205,86 209.34 212.88 216.47
72 178.28 191.15 154.14 187.24 1go.4S 193.75 197.14 200.81 204.15 207.78 211.41
73 172.63 175.53 178.56 18170 104.96 188.31 191.75 195.28 198.88 202.55 208.27
74 166.94 169.86 ¶72.92 176.10 179.40 182.80 186.29 189.87 193.53 197.26 201.05
75 181.21 164.15 167.23 170.44 173.7B 177.22 180.77 184.40 188.11 191.90 195,75
9
I tIT(’~.1Q4.SW
8~’~ød 6P80N L4I~H~N~+S d 9 ~p:p~~5’~’~g
05/11/98 14:38 6 P S +ANAHEIM NO.848 P007/013
TABLE B
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 3 1/2’/,
Options 1,2 and 3 Single Life Annuities
Manthly Peymen~Guaranteed
_________
Age Nsf’s 60 120 180 240 UnkMefund
50 $233.36 *233.71 $23482 $238.75 $239.65 $240.70
51 222.87 230.25 231.45 233.54 236.72 237.65
52 22620 228.72 ~.01 230.29 233.74 234.54
53 ~.65 223.10 224.51 238.98 230.75 231.36
54 21883 219.41 22063 223.82 227.73 228.12
55 215.11 215.64 217.22 ~.fl 234.70 324.52
56 211.21 211.78 213.57 2167?221.66 321.45
57 20723 207.84 209.79 213.28 218.62 218.02
58 203.15 203.81 205.94 209.76 215.60 214.53
59 198.98 199.70 202.03 20621 212.60 210.96
60 194.73 195.51 198.06 202.84 209.63 207.33
61 190.38 19124 194.04 199.05 206.70 203.83
82 185.25 105.00 189.97 195.47 303.54 199.85
63 161.45 182.50 18526 191.89 201.06 195.99
64 176.69 178.03 191.73 188.35 19837 192.18
65 172.25 173.52 177.57 184.64 195.78 18925
68 167.56 158.85 173.41 161.39 193.31 18424
57 162.81 164.34 16924 178.00 190.97 180.31
68 ‘~58.91 155.70 155.09 174.70 182.78 17525
69 153.16 155.01 160.95 171.49 186.75 172.11
70 148.26 150.30 158.85 ~I —i \~B.10
71 14321 145.57 152.79
.
72 138.33 140.23 146.81 1 .\15~.70
73 133.32 138.10 14491
_____
~sS.$8
74 128.31 131.39 141.11 179.12 151.45
75 123.30 126.73 137.44 175.10 147,15
Option 4—Joint and Survwor Life Annuity
Yaungr Am~uItent
Age of Otder Ni~sro1 Vew~Votmger Then Oter Annu~nt
Annui~n*0 2 3 4 5 6 7 6 8 10
50 2259.51 *261.02 *262.56 $264.14 $285.75 $257.39 $269.05 $270.72 $272.42 $274.13 $276.84
31 256.50 258.05 255.64 28126 262.92 254.61 255.32 268.06 269.99 271.57 27323
52 253.39 25499 256.83 256.30 250.01 261.75 283.62 26520 267.11 268.92 270.75
53 250.19 251.94 25333 25525 257.01 258.80 280.82 262.47 264.33 25620 288.08
54 246.90 248.59 250.33 252.11 253.92 255.77 357.64 259.54 261.48 283.29 265.23
55 243.51 2452.5 247.04 248.87 250.74 252.64 284.57 256.53 256.51 26030 26230
56 240.02 241.92 243.66 245.54 247.47 249.42 251.41 253.43 255.46 257.52 25935
57 298.43 239.28 240.17 242.11 244.06 246.11 24816 25023 ‘254.44 258.57
59 232.74 234.64 236.59 238.58 240.82 242.70 244.81 246.94 249.10 251.28 253.47
59 228.94 230.89 232.90 23495 237.05 239.19 241.36 243.58 245.78 246.03 250.28
60 235.03 227.04 229.10 291.22 233.38 235.58 237.81 240.08 242.37 244.89 247.00
81 $21.02 223.08 235.20 227.38 225.60 231.87 234.17 236.50 238.85 24125 243.62
62 218.80 219.02 22120 223.43 235.72 ~.05 230.42 322.82 235.24 297.69 240.15
63 212.68 214.85 217.09 21938 231.73 224.13 22836 229.03 231.53 234.05 238.58
64 208.35 210.58 212.87 21523 217.94 220.10 292.61 225.15 227.71 230.31 23391
85 ~92 206.20 208.55 210.91 213.44 215.9?218.55 221.16 223.80 226.48 229.15
55 199.40 201.73 204.13 206.60 209.14 211.74 214.38 217.06 219.78 222.52 225.28
67 194.78 197.16 199.61 202.14 204.74 207.40 210.11 212.87 215.66 218.48 221.31
69 190.06 192.49 195.00 19738 20024 20296 205.74 20537 211.43 214.33 217.24
69 18525 187.72 190.28 192.92 195.54 198.42 20127 204.16 207.10 210.07 213.07
70 180.35 182.57 185.48 188.17 190.95 193.79 196.70 199.66 202.87 205.72 205.70
71 175.35 17792 180.58 183.23 196.18 186.06 192.03 195.06 198.14 201.26 204.41
72 17029 172.99 175.60 178.40 181.28 18424 18727 190.37 193.51 196.70 199.93
73 155.14 187.71 170.53 173.38 176.32 179.34 182.43 185.58 195.60 192.06 195.38
74 159.93 162.60 165.39 16825 17123 174.35 17730 150.72 183.99 187.32 190.69
75 154.67 157.37 160.19 183.13 166.16 189.29 172.49 175.77 179.11 182.51 185.95
10
urrG-i 94-SW
MAY 11 ‘98 12:41 713 831 6035 PAGE.07
S~ø9 ~8 £T~9~’:~B6~T’~A~W
TABLE C
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYM~MT OP
AT AN ASSUMED INVESTMENT RATE OF 41/2%
ptions 1.2 and 3—Single Life Annuitie3
MonOW Pa~insn~Guaiv~ed
Aqe Nan.60 120 180 240 Unit Rotund
50 $204.42 $204.75 £205.77 £207.48 £209.94 £209.57
51 201.83 202.19 203.30 205.15 207.83 207.29
52 199.16 199.55 20075 202.77 205.68 204.94
53 198.41 196.84 196.14 200.33 203.51 202.52
54 193.58 19405 195.45 197.84 201.30 200.04
55 19067 191.17 192.70 195.30 199.07 197.49
56 187.67 188.21 109.87 ¶92.70 196.83 194.54
57 18458 185.17 188.97 190.07 194.57 192.18
58 101.40 192.04 194.00 187.39 182.31 189.42
59 178.12 178.82 190.97 184.67 190.00 188.59
80 174.75 172.51 177.87 181.92 187.92 183.68
61 171.39 172.12 174.70 179.14 185.80 180.76
02 167.73 168.64 171.48 176.35 183.42 177.73
63 164.09 185.02 16821 ¶73.55 18129 174.53
54 100.36.151.48 164.90 ¶70.78 179.22 171.48
65 158.57 157.79 161.55 187.99 177.22 168.31
66 152.70 154.05 ¶59.10 165.24 175.31 165.04
67 148.76 150.24 154.78 162.54 113.49 161.70
68 144.75 146.38 151.38 159.88 171.78 158.26
89 140.87 142.46 1~7.97 -.r~115cr—I r-~170J19 154.95
70 136.53 138.50 ~I E!~4~I ii”i i~151.45
71 132.31 134.50 16t~8~r”i ,J~~f~J~fl ~147.92
~U ~UUUL5~
74 119.38 122.37 131.39 145.90 184.16 13725
75 115.01 110.33 12927 144.02 163.35 133.53
n 4—Joint and Suvvivor Life Annuity
Younger Annui~jit
Ags at O~Mr Number 0,Yuan Yawiqer Than Older Mnu~mnl
Anfluilint 0 1 2 3 a 5 6 7 10
50 $224.40 $225.44 £225.49 $227.57 $228.65 ~.75 £230.88 £23157 $233.08 $234.19 $235.30
51 222.31 223.38 224.48 225.60 ~.73 287.87 228.02 230.17 231.33 232.49 233.65
52 230.13 221.25 222.39 223.55 224.12 225.81 227.11 228.31 229.52 230.72 231.93
53 217.87 219.03 220.22 221.42 222.64 223.88 225.12 226.37 227.63 228.89 230.14
54 215.52 216.73 217.96 219.21 220.48 221.76 ~.06 224.38 225.86 226.97 22327
55 213.08 214.34 215.81 216.91 218.23 219.56 220.91 22226 223.62 224.98 228.33
56 210.55 211.35 213.18 214.53 215.90 217.28 21B.69 220.08 221.49 222.91 224.32
57 207.92 209.27 210.65 212.05 213.47 214,91 216.36 217.82 21929 220.76 ‘22
58 205.19 206.59 208.03 209.48 210.96 212.45 213.96 215.48 217.00 218.52 220.05
59 202.36 203.82 205.30 206.81 206.35 209.90 211.46 213.04 214.82 216.20 217.79
60 199.43 200.94 202.48 204.05 205.54 207.25 208.87 210.51 212.15 213.80 215.44
61 198.39 197,95 199.55 201.18 202.83 204.50 206.19 207.89 209.59 211.20 213.01
62 193.24 194.86 196.51 198.20 199.91 201.65 203.40 205.16 206,94 208.71 210.48
63 180.98 191.65 193.37 195.12 196.90 198.70 200.51 202.34 204.18 206.03 20717
84 186.62 188.35 190.13 191.23 193.77 195.64 197.53 199.42 201.33 20324 205.16
65 183.18 184.94 186.77 183.54 190.55 192.48 194.43 198.40 199.38 200.38 202.35
66 179.59 181.42 183.31 165.24 187.21 189.21 19123 193.27 195.32 197.39 199.44
67 175.91 177.80 179.75 131.74 153.77 185.33 187.93 190.04 192.16 194.30 198.43
68 172.13 174.07 176.07 118.12 100.22 182.35 184.51 186.70 188.90 191.11 193.32
69 188.24 170.24 172.30 174.41 176.56 178.76 190.99 183.25 185.52 197.81 190.10
70 164.24 16030 168.41 170.59 172.80 175.06 177.26 17919 182.C4 194.41 168.78
71 160.14 162.25 164.42 166.65 168.94 171.26 113,63 176.03 118,46 190.90 183.35
72 155.95 158.10 160.33 162.62 154.97 167.36 169.80 172.27 174.77 177.29 119.82
73 151,68 153.88 156.15 156.49 160.90 163.36 165.86 168.40 170.97 173.57 176.18
74 147.29 149.54 151.87 154.27 156.74 159.26 161.03 164.44 167.C6 189.75 172.44
75 142.84 145.13 147.50 149.96 152.48 155.07 157.70 160.38 163.~0 165.84 169.60
11
UITG.194-SW
e~D’;e~d GPBON I4I3H~N~~-S d S ~:Pt 86/Tt/~
@5/11/98 14:38 ~P S 4 ANAHEIM NO.848 P008/013
TABLED
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 5%
Options 1,2 and 3 -.Single Life Annuities
M0nth~y P~yvnenb Guaranteed
Age Non.60 120 100 240 Uflil Refund
50 $192.14 $19247 $103.45 $195.06 120994 1196.46
51 189.89 190.25 181.32 193.06 195.52 194.47
52 187.57 187.96 189.12 191.01 193.69 102.45
53 185.18 185.50 186.85 188.91 191.83 190.34
54 182.70 193.16 184.51 196.76 18964 196.17
55 180.14 180,64 182.11 194.55 188.03 185.82
SB 177.50 178.94 179.53 182.30 186.09 193.80
57 174.77 175.35 177.09 180.00 184.14 181.21
58 171.95 172.58 174.47 177.65 152.15 178.81
$9 169.03 109.71 171.79 175.27 180.22 116.29
SO 166,02 166.77 169.04 172.85 179.27 173.70
61 162.81 193.73 166.22 170.40 176.34 111.03
62 159.72 160.62 16335 16763 174.43 168.35
63 156.43 157.42 ioo~‘tss.4s i73.5s 155.57
64 153.56 154.16 157.45 16267 170.74 162.71
65 149.63 150.82 ¶54.44 160.50 168.38 159.78
66 14609 147.42 151.40 158.04 167.30
.
156.56
67 142.49 143.95 14832 15562 165.69 153.53
88 138.82 140.42 14524 153.24 164.18 150.72
69 135.07 13683 142.14 15062 162.77 147.55
70 131.25 133.19 139.04 145.66 161.46 114.44j
71 127.35 129.50 135.95 148.‘..‘1~0j27 ~
~:u.L~~uuuu~’
74 115.32 11825 135.94 140,61 157.41 131.31
75 111.23 114.50 124.08 130.90 156.68 121.92
Option 4—Joint and Survivor Ut e Annufly
~Voung.r MflU~ilt
A.of Older Nun~cf Yws Yo*ino.r Than Older Mnu~nt
Annui~nt 0 1 2 3 4 5 6 7 8 9 10
50 $209.69 1210.56 1211.44 1212.32 1213.22 1214.12 8215.03 9315.93 1216.84 5217.74 5215.54
51 207.94 399.$4 20075 210.89 211.82 21256 213.51 214.48 215.41 21635 217.29
52 206.11 207.05 208.01 208.90 209.96 210.94 211.93 212.92 213.91 214.90 21568
53 204.21 205.19 208.18 207.19 208.21 20924 21028 21131 212.35 213.38 214.40
54 202.21 203.24 20428 205.33 206.40 207.47 205.55 209.63 210.71 211.78 212.56
56 200.14 20121 202,26 200.39 204.50 205.62 206.75 207.98 200.01 210.13 211.25
56 197.97 196.09 200.22 201.37 202.53 20369 204.57 206.05 20722 208.40 209.57
57 195.72 196.98 195.06 109.26 200.46 201.68 202.91 204.14 205.37 206.60 207.32
58 193.37 19458 195.81 197.05 196.32 199.59 200.86 202.15 203.43 204.71 205.99
59 190.82 192.18 193.46 194.76 196.07 197.40 190.72 200.07 201.41 202.75 204.08
60 188.36 188.68 191.01 192.37 193.74 186.12 196.51 19761 169.30 200.70 202,09
61 185.71 187.08 108.47 189.88 191.31 192.75 19420 195,65 197.11 199.56 200.01
62 182.95 184.37 195.82 10726 188.78 19028 191.79 183.31 194.53 196.34 197.55
63 180.09 181.58 193.Q7 184.60 186.15 197,71 18928 190.87 192.45 164.03 195.61
94 177.12 179.65 18021 181.50 183.41 185.04 186.68 188.33 189.99 191,62 19327
65 174.04 175.63 17725 175.90 150.57 18226 18367 185.89 107.40 199.12 190.93
66 170.35 172.50 174.18 175.99 177.52 178.38 181.16 182.94 184,73 186.52 185.30
67 167.57 16627 171.00 172.77 174.57 176.40 178.24 150.10 101.96 183.82 185.68
68 154.18 16562 187.72 169.55 171.41 173.30 17521 177.14 179.08 181.01 182.95
69 180.67 162.48 164.33 166.32 169.14 170.10 172.05 174.08 176.09 175.10 100.11
70 157.06 158.82 160.83 162.78 164.77 166.79 168.84 170.91 173.00 175.00 177.18
71 15334 155.25 157.32 159.23 161.29 163.38 185.50 167.64 16960 171.96 174.13
72 149.51 151.48 153.51 155.58 157.70 159.86 162.05 164.28 169.49 168.74 170.95
73 145.59 147.61 149.68 151.83 154.01 ¶5624 169.49 160.78 163.09 165.40 167.72
74 141.58 143.65 145.78 147.97 15022 152.51 154.84 157.19 159.57 181.97 164.37
75 137.49 139.59 141.77 144.02 148.33 148.68 151,08 153.51 ¶55.96 158.43 160.81
12
UITG-194-SW
MAY 11 ‘98 12:42 713 831 6035 PAGE.08
85/11/98 14:43 8 P S +ANAHEIM NO.849 PØC~/Ø@B
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05/11./SB 14:39 ~P S 9 ~4~HEIM NO.848 P009/013
(a)the Fixed Interest Option Values on
the date We receive proof of death;or
(b)100%of Purchase Payments aUo
cated to the Fixed Interest Options
reduced by the amount of any prior
withdrawals or transfers from Fixed
Interest Options and further reduced
by any portion of the Accumulation
Value that has bean applied under an
Annuity Income Option.
The benefit under the Variable Investment
Options is the greater of:
(a)the Variable Investment Option
Values on the date We receive proof
of death.or
(b)100%of Purchase Payments ailo.
cated to Variable Investment Options
reduced by the amount of any prior
withdrawals or b’anster5 from the
Variable Investment Options,plus
interest at an annuai rate of 3%.For
this purpose.all amounts fransf erred
iiflp Variable h’ivesln’ient Options are
considered Purchase Payments allo
cated to Variable Investment Options.
Subject to Section 5.03.the death benefit is
payable at any time the Paithpant’s Bane.
ficiary selects arid in any farm the Participant
could have selected under this Contract
(b)Death During Annuity Peñod If the Pajtc
ipant dies during the Am~iiity Period,the
amount of the death benefit,if any,will be
based on the terms of the Annuity Income
Option.Unless the Participant elected the
Fourth Option,the Beneficiary may elect to
receive the death benefit in one at the
following forms:
(1)Continuing annuity payments under the
terms of the Participanrs Annuity Income
Option with the rlght.for Variable
Annuities only,to receive the remaining
payments in a lump sum at any time
thereafter;
(2)Alump sum;or
(3)Annuity payments under another Annuity
Income Option,based on the avallabte
lump sum and subject to the limitations of
Section 5.03.
The lump sum available under these alter.
natives is the present value of remaining pay
merits,discounted at the Assumed Investment
Rate,and based on the current Annuity Unit
Value for (2)and (3),or the value next
determined after receipt of the request at
VALICs Home Office for (1).
(c)Investment Options and Other Rights Until
thi death benefits have been fully paid,the
Participant’s Beneficiary will be entitled to
exercise all the Investment Options and other
nghts the Panicipant can exercise under this
Contract Unpaid death benefits that have not
been applied under an Annuity Income Option
will have an Accumulation Value determined
in the same manner as the Participant’s
Accumulation Value.
(d)Pmnf nf fleath~Proof of death may be made
by sending VAUC a certified copy of the
“copy,9f a decree
asta
attending
or any other proof satisfactory to
VAUC.
UITG-1 94-SW
14
FlAY 11 ‘98 12:42 713 831 6835 PAGE.89
s~e9 I~B £I~9~:~I 8G~IT A~1
Section 5-CODE REQUIREMENTS AND RETiREMENT
PLAN PROVISIONS
01 Salary Reduction Purchase Paymenta -It the
Participants Purchase Payments are made under a
voluntary salary reduction agreement as pall of a
Tax-Deterred Annuity arrangement under Section
403(b)of the Code,i)there may not be a separate
Plan document,in which case the Contract is the
Plan,and ii)in either case the following restrictions
apply
(a)Umit on Purchase Paymont~A Participants
salary reduction Purchase Payments may not
exceed the limits of Section 402(g)at the
Code.We reserve the right to refund excess
Purchase Payments.
(b)Withdrawal Restrictions The Participants
Accumulation Value amibutabte to salary
reduction Purchase Payments cannot be with.
drawn or otherwise disthbuted before the
Participant is 59 1/2 years old,unless t(~e~\~Jj
Participant (1)has separated~fr~J~~J
with the employer ~ng~’P(an,(2)
~(3)becomes Th~bfed (so.Section
4.06(c)),cc (4)has incurred a hardship
(hardship withdrawals are not available for
earnings on salary reduction purchase
payments).This limitation will b applied in a
manner consistent with the requirements of
Section 403(b)(1 1)of the Code.Equivalent
withdrawal restrictions apply teeny portion of
the Accumulation Value that is attributable to
Purchase Payments representing amounts
directly transferred from a custodial account
under Section 403(b)(7)of the Cod..
5.02 Minimum 0i~tributions After Age 70 1/2
(a)General Rules The Participants benefits
under the Contract must satisfy mmimum
distribution rules of the applicable section of
the Code and regulations issued by the
Secretary of the Treasury under the
applicable section.These minimum
distribution rules generally require that
benefits begin after the Participant is 70 1/2
years old and that the minimum amount is
paid each year.Payments may be made in
the tcmi of annual withdrawals or under an
Annuity income Option.
Code Sections which apply are:(i)Section
401(a)(9)for contracts issued for a Plan
intended to meet Sections 401(a)and/or
403(a),(ii)Section 403(b)(10)for Section
403(b)contracts,and (iii)Section 457(d)for
deterred compensation plans under Section
457.
(0)Minimum Annual Withdrawals.The minimum
withdrawal is set each year based on the
Accumulation Value and the life expectancy
of the Participant and the Participants
Beneficiary.The Participant may elect to have
life expectancies computed for each years
distribution,or to use the life expectancies
computed at the first distribution (reduced by
one year for each annual withdrawal)for all
later distributions,If the Participants
Beneficiary is not the Participants spouse,
the annual withdrawal must meet the
minimum
,
distribution incidental benefit
requirements.
(c)Annuity Income Option If the Participant
elects payments under an Annuity Income
Option,the guaranteed or expected period of
payments under the Annuity Income Option
may not exceed the Participant’s life
expectancy and that of the Participant’s Sen.
ficiary at the Annuity Date,or a shorter period
it the Participants Beneficiary is nøt the
Participant’s spouse.
(d)403(b)Exception to General Rule.Any
amount added to the Contract which was
initially within a Section 403(b)contract prior
to January 1,1987 and continually since then,
may either b paid in a manner which meats
these rules or must (1)begin to be paid when
the Paitcipant is age 75;and (2)the present
value of payments expected to be made to the
Participant,over rile,under the option chosen
must exceed 50%of the present value of all
payments expected to be made Cthe 50%
rulV).Notwithstanding,the Paiti~pants entire
Section 403(b)Contract balance must meat
the minimum distribution incidental benefit
requirement of Section 403(b)(10).
5.03 MInimum Death Benefit DistributIons
(a)General Rules The death benefit,if any,pay
able to the Participants Beneficiary must also
satisfy the rules of Section 401 (a)(9)(B),
Section 403(b)(10)or Section 457(d),
witichever may be applicable,and the
regulations issued under such sections by the
Secretary of the Treasury.The past-death
rules of these sections limit the extent to
which a Beneficiary may delay payment of
death benefits.The Participant’s Beneficiary
may satisfy those rules by receiving a lump
UITG.I 94-SW 15
8~/~ø8d 6P8’ON WI~H~N~4-S d ~£P:PT 86/tI’~O
05/11/98 14:39 G P S 4 ANAHEIM NO.848 P010/013
sum,annual withdrawals,or payments under
an Annuity Income Option.
(b)Death Before Distributions Begin If the Partic
ipant dies before payments under an Annuity
Income Option (or post-age 70 112
withdrawals)have begun,the Participanrs
Beneficiary must either receive the whole
benefit by the end of the fifth year following
the year of The Participant’s death or receive
the benefit in installment payments over his or
her life or life expectancy if payments begin
by the calendar year following the year of the
Participanra death.The Participants spouse
beneficiary may delay distributions until the
Participant would have reached age 70 112.
(c)Death After Distributions Begrt If the Panic.
ipant dies alter payments under an Annuity
Income Option (or post-age 70 112 with
drawals)have begun,the death benefit must
be paid at least as fast as under the method
the Participant selected.
5.04 DIrect RolIover~-If any benefit payable under this
Contract constitutes an ‘eligible rollover distribution’
within the meaning of Section 402 of the Code,the
Participant has the right to elect to have such disth
bution paid directly to en ‘eligible retirement plan’in
a transaction designated under the Code as a
‘direct rollover.’Before any eligible rollover disth
bution is made to the Pwtcipant.we will provide the
Paiticipant with a written explanation Of the
Participants tight to make a direct rollover and the
tax consequences of making or not making a direct
rollover.No surrender,withdrawal,or other benefit
distribution that constitutes an eligible rollover
disthbution will be made to the Participant under
this Contract,unless the Code’s requirements
applicable to eligible rollover distributions have
been satisfied.Except f or eligible rollover
distributions,We reserve the right to make
payments onPy to the Participant or the Participants
Bane!iclary,
5.05 Plan Provisions -The Plan,including certain Plan
provisions required by the Employee Retirement
Income Security Act of 1974 (ERISA)or other
applicable law.may limit the Participants rights
under this Contract The Plan provisions may:
(a)Limit the Participants tight to make Purchase
Payments:
(b)Rosln~t the tune when the Participant may
elect to receive payments under this Conlract
(c)Require the consent of the Participants
spouse before the Participant may elect to
receive payments under this Contract;
(d)Require that all distributions be made in the
form of a joint and survivor annuity for the
Participant and the Participant’s spouse,
unless both consent to a different form of
distribution;
(e)Require that the Participant’s spouse be
designated as Beneficiary;
(f)Require that the Participant remain employed
with the Contract Owner før a specified period
of time before the Participants rights under
the Contract become fully vested:or
(g)Otherwise restrict the Participants exercise of
rights under the Contract or give the Contract
Owner (or a Plan representative)the tight to
exercise ceitsin rights on the Paitcipants
behalf.
No such Plan provision shall limit a Participants
~rn~eConVact
of s ViSI~.(‘~L ~$~ói~Hh~lf 4(~YJ such Plan
provision nIdr~’Y~l~L8b~!g1bàk.under this
Contract.
5.06 Nanquallried Deferred CompensatIon Plans If
the Contract has been issued for a nonqualified and
unfunded deferred compensation plan,the Contract
Owner possesses all rights under the Contract.No
Participant or Beneficiary will have any enforceable
right to make elections under this Contract or to
receive benefits from VAUC.The Contract Owner
may direct that all benefit payments be made to the
Contract Owner,or the Contract Owner may
authorize VAUC to make benefit payments directly
to Participants and Beneficiaries as the Contract
Owners payment agent under the Plan.The
Contract Owner may also authorize VAUC to follow
Participant requests with regard to the allocation of
Purchase Payments among Investment Options,
transfers among Investment Options,and other
.rights provided by this Contract If the
Contract Owner authorizes VAUC to act as
payment agent under the Plan or to follow
Participant requests,the Contract Owner may
revoke or modity that authorization at any time
without prior notice to Participants.
UITG-1 94-SW
16
MAY 11 ‘98 12:42 713 831 6035 PAGE.10
eg.3~d sees i~B ~tL ,~t’:~T 86~tt A~N
Section 6-GENERAL PROVISIONS
.01 Participant Ceitificates -We will issue certificates
to each Participant unless this Contract is issued
with respect to a nonqualifled and unfunded deferred
compensation plan.Each certificate will sat torth the
benefits to Which the Participant is entitled under thø
Contract.C&tificaths are not a part at this Contract.
6.02 Assignment.This Contract cannot be sold,
assigned,discounted,or pledged as collateral for a
loan or as security for the performance of an
obligation.The benefits,values,and rights under
this Contact are not subject to any creditor claims to
th.fullest extent permitted by law.This Contract
and its rights cannot be transferred to anyone other
than Us,except as provided under the Plan or under
a domestic relations order properly issued by a court
at competent jurisdiction and that complies with
ERISA.if applicable.To the extent pennitted by the
Code and applicable law,We will make a Cash
Surrender or Withdrawal payable to a third palty
upon the Participanrs request
In addition,upon at least 30 days written notice to
the Contract Owner,we may make other changes to
this Contract that will apply only to individuals who
become Participants after the effective date of such
change.Aft changes We make will be subject to any
applicable regulatory requirements.
6.06 Future Participants -We may at our discretion
curtail or prohibit new Participants under this
Contract upon written notice to the Contract Owner.
6.07 Reports -We will send the Participant a Separate
Account financial report twice each year if the
Participant has values in any Variable Investment
Option.
We will send to the Participant.at least annually,a
statement thawing the dollar value of all investment
options,investment performance since the prior
statement,and as applicable,the number and value
of any Variable Accumulation Units credited to the
ulrG.194..sw
Participanrs Account All statements will be mailed
within two months of the date of the information.
6.08 Voting Rights -We will hold the voting rights on all
shares held in the Separate Account.To the extent
of this Contract1s participation in the Separate
Account through one or more Variable Investment
Options,We will vote those shares as instructed.
The Participant,or the Eeneficlary,if the Participant
has died,will have the voting instruction rights prior
to the Annuity Date.The annuity payee will have the
voting instruction rights on and after the Annuity
Date.
received.
6.12 Substitution of investment Fund Shares -It
shares of a particular Investment Fund are not
available or if,in the judgment of VALIC,such
shares are no longer appropriate for a Variable
Invesunent Option,shares of another Investment
Fund may be substituted t~r the Investment Fund
shares already held under the Variable Investment
Option arid for those to be purchased by future
Purchase Payments or transfers under this Contract.
In the event any substitution occurs.VALIC will notify
the Contract Owner within five days.
6.13 Minimum aenetit -The paid up annuity,cash
surrender or death payment available under this
Contract will not be less than the minimum benefits
required by any statute of the state in which the
Contract is delivered.
6.09 Suapension of Payments -VALJC reserves the
right to suspend payments under the Separate
Account for any period when:(a)the Now York
Stock Exchange is dosed (other than customasy
weekend and holiday closings);(b)When trading on
the Exchange is restricted;(c)when an emergency
prevents disposal of securities Mid in the Separate
Account or it is not reasonably practicable to
determine the value of the Separate Accounts net
6.03 Vesting-Except as may be provided in the Plan,assets;or (d)during any other period when the
the Partictpant~s rights under this Contact are fully Securities and Exchange Commission,by order,so
vested and nonforfeitable.Separate Account A holds permits for the protection of security holders.
all assets for Variable Investment Options for the 6.10 Deferral of Cash Sunender or Withdrawal -
exclusiv•benefit of Participants.Beneficiaries,and VAUC may defer payment of any surrender of
other holders of annuity contracts.amounts accumulated in Fixed Interest Options.
04 Written Notices to Us .Except as specifically Deferral shall not exceed six months from the receipt
provided otherwise,any Notice of change,election,Of written notice at the Home Office.Interest shall be
choice,option or other exercise of right given under p~d if payment is deferred $or thirty days or more at
the Contract must be in writing on a form provided by a rate as determined by VAUC.
Us,or on a form and in a manner acceptable to Us.6.11 Proof of Survival .We reserve th.right to require
Such Notice will be effective when it is received in satisfactory proof that the Participant and any payee
Our Home Office.is alive on the date any benefit payment is due.It
6.05 Change ol Contract,-We may ~J~f~90t is not received after requested in writing,
to the extant it is required or deer4~’a~4~4~o1~nj I ‘i I:’O1w111 have the right to make reduced payments
so in order to conform the Contrac ~~i~ati~.i&W.’—’CJ \_oP ‘to...*ithhold payments entirely until such proof is
17
8@e/800d 6P8 ‘ON WI~H~N~4 S d ~£p:tit B6/tt’ø
05/11/98 14:39 6 P S +ANAHEIM NO.848 P011/013
6.14 Separate Aceount -That portion of the assets of the
Separate Account equal to the reserves and other
contract liabilities with respect to the Separate
Account shall not be chargeable with liabilities
arising out of any other business We may conduct.
Income,gains and losses,whether or not rqaliz~d,ir—~,~
from assets allocable to the Separate Acco~ç~e.-’I ~‘1
credited to or charged against such account ~L.b t~
regard to Our other income,gains or tosses.
-
UITG-1 94-SW 18
MAY 11 ‘98 12:42 713 831 6035 PAGE.11
05/11/98 14:39 G P S ~ANAHEIM NO.848 P012/013
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
?O.Box 3206,Houston,Texas 77253
NOTICE OF COMPLAINT PROCEDURE
COMPLAINT NOTICE:Should any dispute arise about your premi urn or about a claim
that you have filed,contact your agent,write or contact VALIC at 1.80044-VAJJC.
California law requires you to give VALJC the opportunity to resolve the dispute.Then,
if we foil to produce a satisfactory solution to th~fl~ybIem.you may also contact the
Department of Insurance,Cön.sthize~~14i~qn,300 South Spring Street.Los
U :~‘L L~
Angeles,California 90013.fize telephone number is 1-800-927-435?This notice of
complaint procedure is for information only and does not become a part or condition of
this Contract or Certificate.
VASI~?REv7II
nAY 11 ‘98 12:43 713 831 6035 PAGE.12
05/11/98 14:39 S P S 4 ANAHEIM NO.848 P013/013
CALIFCRNIA LIFE AND HEALTH INSURANCE
GUARANTEE ASSOCIATION ACT .
SUMMARY DOCUMENT AND DISCLAIMER
Residents of California who purchase life and health insurance and annuities should know that the insurance
companies licensed in this state to write these types of insurance are members of the California Life and
health insurance Guarantee ~rcuiia&~.m.purpose of tius Association is to assure that
paficyholders will be protected,within limits,in the unlikely event that a member insurer becomes financially
unable to meet its obligations.It this should happen,the Guarantee Associa~on will assess its other member
insurance companies for the money to pay the claims of insured persons who live in this state and,in some
cases,to keep coverage in force.The valuable extra protection provided through the Association is not
unlimited,as noted in the box below,and is not a substitute for consumers care in selecting insurers.
The California Life end Health Insurance Guarantee Association may not provide coverage for
this policy.If coverage is provided it may be subject to substantial limitations or ezclusions,
and require continued residency in California.You should not rely on coverage by the
Association in selecting an Insurance company or in selecting an Insurance policy.
Coverage is NOT provided for your policy or any portion of it that is not guaranteed by the
insurer or for which you have assumed the nsk,such as a variable contract sold by
proepectus~
Insurance companies or their agents are required by law to give or send you this notice.
HOWEVER,INSURANCE COMPANIES AND THEiR AGENTS ARE PROHIBITED BY LAW FROM
USING THE EXISTENCE OF THE GUARANTEE ASSOCIATiON TO INDUCE YOU TO PURCHASE
ANY KIND OF INSURANCE POUCY.
Policyholders with additional questions should first contact their insurer or agent or may
then contact:
California Life
~
Ociation
P.O.Box 70069
Los Angeles,CA 90070
or
Allegra Willison,Staff Counsel
California Depwtinent of Insurance
45 Fremont Street,24th Floor
San Francisco,CA M105
The state law that provides tar this safety-net coverage is called the California Life and Health Guarantee
Association Act.On the back of this page is a brief summa,y of this lawe eoverages.exclusions and hmits.
This summary does not cover all provisions of the law;nor does it in any way change anyone’s righte or
obligations under the Actor the rights or obligations of the Association.
(please turn Over)
OCI5~a2
NPY 11 ‘98 12:43 713 831 6035 PAGE.13
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*A~Ai~ca~Cc,~rai ~am~n~
*See Addendum
AD~NISTRATIVE SERVICES AGREEMENT
This Agreement is made and entered into by and ~County Sanitation flistrirtc*
(the ~Employcr”)and The Variable Annuity Life Insurance Company (VALIC’).a Texas corporation.
on this
____________
day of .19 98
ARTICLE I -PURPOSE
The Employer maintains a deferred compensation plan (the han”).In the interest of economy and cfticicncy.the
Employer deems it desirable to contract for administrativc services pertaining to accounting for defcrsals.disburse.
ments of funds,proper reporting to participants and the Internal Revenue Service,and withholding of taxes,if appUca
ble.Therefore,the Employer designates VAUC its agent to perform the services outlined in this agreement and
deposit income tax amounts as required by law.VALIC’s undertaking to provide administrative services hercunder is
limited to those amounts of deferred compensation under the Plan that the Employer has invcstcd in annuity ContraCtS
issued by VALIC.
ARTICLE II-DEFINITIONS
•
~used in this agreement,the following definitions shall apply unless the context indicates otherwise:
2.1 Agent -The Vanable Annuity Life Insurance Company (“VALIC”).
2.2 Annuity Contract —Thc group or individual annuity contract between the Employer and VALIC.
2.3 Employer—County Sanitation Districts of Orange County,California
Emp~o,c,N.mc
Post Office Box 8127,Fountain Valley,CA 92728-8127
Notices to the Employer shall be sent to the attention of.the Board.Secretary.
2.4 Participant —An employee or independent contractor of the Employer electing to parocapate in inc nan.
2.5 Plan—The County Sanitation Districts of Orange County DcfcrrcdCompensationPlan.
(check one below):-
a.X a 457(b)or ‘eligible”defcxTcd compensation plan described under section 457 of the Internal
Revenue Code of 1986,as amended.
b._a 457(f)or “ineligible”deferred compensation plan sponsored by a tax exempt Or
governmental organization.
C.
____
ft non-qualified (top hat)deferred compensation plan sponsored by a forprofft organization.
ARTICLE III -RESPONSIBILi n~S OF EMPLOYER
3.1 The Employer shall complete and sign all forms necessary for VALIC’s appointment as agent with the
Internal Revenue Service,or where applicable,those (onus that release VALIC of said appointment..
3.2 The Employer shall notify VALIC in writing of all Participant information requested by VALIC.including.
but not Limited to.age.social security number and beneficiary information.
3.3 The Employer shall dircet VALIC to make benefit payments under the Plan in accordance with the annuity
option specified by the Employer and .chall supply VAUC with the amount of the accourn to be distributed.
3.4 The Employer shall be responsible for approval of all requests for unforcsccab)c emergency withdrawalS
under the Plan and direct VALICto make approved disbursements in amounts specified by the Employer.
paJwpvp,~t~4
V,~i3 VU £9~
EXHIBiT “B”
~AVALIC
*Au Auwq.c~øi G~uuat ~
ARTICLE IV -VALIC RESPONSIBILITIES
4.1 VAUC shall furnish a Notice of Receipt of Premium to Employer within 7 days of receiving funds.
4.2 VAUC shall furnish quarterly confirmation statements of accounts showing activity for the pcriod and the
total value of each Participant’s account(s)to (check one below):
a.X Parricipants;or *See Addendum Section 5.0.
b.
_________
the Employer.
43 VALIC shall compute and deduct income taxes required by law to bc withheld for all distributions.
(chcck one below):
a.X Yes.This opth~n is only available (fyou checked 2.5(a).(proceed to 4.4)
b._________No (proceed 10 Article VI)
c.
________
Only for Required Distributions (complete 4.6 and proceed to Ankle VII)
4.4 VALIC shall issue the disburscmcnts in accordance with the provisions of the Annuity Contract and the Plan
at the direction of and in amounts specified by the Employer.Such disbursementa shall be made payable and mailed to
perticipanrs.This does not apply ~f 4.3(b)was checked.
4.5 Disbursements shall be made from the account maintained by VALIC on behalf of the Employer in accor
dance with the terms of the Annuity Contract and the Plan,provided.however,that if the Employer terminates thc
Annuity Contract,VALIC shall be obligated to make disbursements only to the extent that funds are still available in
the account of the Employer.
4.6 VALIC shall compute and deduct income taxes required by law to be withheld from distributions from the
Plan as may be spccdied below by the Employer.A report of such withheld taxes will be forwarded by VALICro the
internal Revenue Service within the time prescribed by law.This only applies ifyou checked 2.5(a).
~X Federal income taxes
(Specify one only):
wage bracket method for all distributions.
_______flat 28%rare for all distributions.
wage bracket method for required di.rbibutions only.
X flat 28%rate for required diWibutions only.
b.X Stare income taxes
(Specify one only):
wage bracket method for all distributions.
_______current percentage rate specified by state law for all distributions.
wage bracket method for required disUibutions only.
_________current percentage rate specified by state law for required dLwibwions only.
Employer agrees to furnish VALIC a properly completed Withholding Allowance Certificate (Form W-4)for
each Participant receiving a disbursement subject i.o the wage bracket method of withholding.VAUC will not
withhold Federal income tax for any employee who claims an exemption from withholding on Form W-4 by
indicating no tax liability for the preceding year and none expected for the current year.
2
EXHIBIT ‘TB”
4.7 VALIC shall furnish to each Participant tax reporting form(s)required by thc applicable taxing authority
including a statement of gross amounts paid to the Participant and the amount of federal,state and local income tax
withheld by VAI..IC,if any.
4.8 VALIC ~hal2 furnish to the Employer,if applicable,annual and semi-annual reports for The Variablc Annuity
Life Insurance Company Separate Account(s)for distribution to Participants.
4.9 VALIC shall establish and maintain records of notifications from Employcr concerning Participants who are
to receive disbursements,gross payments unde~’~~greemcnc,amounts of federal,stare and local income withheld by
VALIC on behalf of the Employer and reports of such income and deposits filed with the appropriate goven~mental
agencies by VAL.IC on behalf of the Employer.
5.0 Tax Law
5.1 Terni This Agreement shall become effective immediately upon caccution arid shall remain in force until ter
minated by either party as provided below.
5.2 Termination This Agreement may be terminated by cithcr party upon sixty (60)days written notice to the
other party of the intent to terminate.Upon any such termination.Agent shall deliver to the Employer all records and
reports required by this Agreement.
5.3 lnfomiarion VALIC relies on the information provided to it by the Employer or participant,and VAL.IC will
not be responsible for claims resulting from the use by VALIC of any incormcr or misleading information provided to
it by the Employer or participant.
5.4 Assi~nmcnt This Agreement may not be assigned without the written consent of the other party.
5.5 Amendment The parties may amend this Agreement only in writing.Any such amendment must be approved
by the President or a Vicc President of Agent and a person authorized to act on behalf of Employer.
5.6 Notice Any notice provided for herein shall be in writing and shall be deemed to have been given when
received by personal delivery or United States mail addressed to the Employer at the address given in section 2.3 or to
VALIC at the address below:
Customer Service
The Variable Annuity Life Insurance Company
2929 Allen Parkway
Houston,TX 77019
5.7 Governing Law The laws of the stare of.C~l 1~?~~Pg1o~qem the rights and obligations of the parties under this
Agreement.
5.8 EntireAgreement ~
=ya~s.=~me ~~peri~a~al~piew~i~c~~~e
~See Addendum.
5.9 No Cost to Ernolover The services rendered by VALIC pursuant to this Agreement shall be p~forrncd with
out additional cost to the Employer other than administrative and sales charges provided for in the Annuity Contract.
6.0 ~ployer Consolidation See Addendum.
141 3
~-7t~’V~59%
EXHIB~~“B”
MAY—14-99 11.49 PROMtOCSO...HUMAN RESOURCES 10.7149920427 PACE
!
fl~WITNESS WHEREOF,the patties have caused this Agreement to be executed to be effective as of the date hereinabove.
This Agreement is subject to the Addendum to EZ~il’LOYER.:
Admininrative Services Agreement,attached hereto and
incorporated herein by reference.COUNTY SANITATION DISTRICT NO.1 OF ORANGE
COUNTY,CALIFORNIA,FORITSELF AND ONBERALF OF
COUNTYSAN1TATIONDJSTRICTSNOS.2,3,5,6,7,11,13
AND 14 OF ORANGE COUNTY,CALIFORNIA.D~TI~
CAPACITIES AS TRUSTEES
lay
Donald F.McIntyre,
General Manager
HOME OFFICE:
IBE VARIABLE ANNUITY LIFE INSDRANCE COMPANY
ARTICLE VT-EMPLOYER NOTICE OF WITHHOLDING
(S~gen~rcreqiire4 ‘item 4Jb w~p’~L~cn~d
Notice is bei~by given by the Eniployer that nfl d~inxeenents under rise above referenced Plan ~IseU be mk$e by
VALICIO Einpioyas in ~dm~e with the aiintnry ons)~t~4 intt,between VAL1C and the EmpIo~13D6er
the ~1Jfl in v~~~E.trapo~’er ~in to VALIC.VALIC in heteby s”~
the r~onsibl]izy.if fly.o(wirbbolding fed~aI and•s~~ree tax~from all &biwsem~ncs ~e to Employer
w~erthc ~mf2~d Plan.
EMPLOY~
N
By.
—
ARTICLE VI!-EMPLOYER NOTICE OF WnfflOLDING
(~narzri’erajred ~f~ienz 43c was seleced)
•Notice Is hereby given by the Employer that aD disbursecuents ua~the above r f~enz~d Plan sbell be ma~by
VALIC to Employer in accced~nce with the a~ay coiw~cr(s)embed into between VALIC and the Employer un~
the Plun suth amounts and at snth tiu~s ~p)Ø~Pe~$~O~n wm~to VALTC.VALIC ~hereby released
from the is poz~ibility,11 any.~withho1ding federal and ~te income axen from in-service and ~up~mn lerzlliIlañOcl
ditbw~entmns made to ~np3oyer under the above referei~ed Plan.VALIC thafl be renpo~ble for withholding fed
neal and ~te mceme tax~from required d~Thutioa3 ~oudined in s~on 4.5 oS the agLwnP.It~
EMPLOYER:
.-
3y
-
4
EXHIBIT “B”~~iisy98 11
Addendum to Administrative Services Agreementfor
County Sanitation Districts of Orange County
The foregoing Administrative Services Agreement is subject to this Addendum,
which forms a part thereof.
1.The Administrative Services Agreement is made and entered into by and
between County Sanitation District No.I of Orange County,California,for itself and on
behalf of County Sanitation Districts Nos.2,3,5,6,7,11,13 and 14 of Orange County,
California (Employer),in their capacities as trustees of the Employer-sponsored
Internal Revenue Code Section 457 deferred compensation plan,as amended from
time to time,and The Variable Annuity Life Insurance Company (TMVALIC),a Texas
corporation,on this
____________
day of
.
1998.
2.The following language is herebyadded as Section 5.0 of the Administrative
Services Agreement:
~5•~Tax Law Compliance It is the intention of the parties that the Plan
be administered in compliance with all tax laws,rules and regulations
pertaining to Internal Revenue Code Section 457 deferred compensation
plans.VALIC acknowledges that,from time to time,the Employer may
choose to utilize the services of more than one Plan administrator,each
administrator to provide administrative services with respect to the Plan
assets delivered to it.In order that the Employer may ensure that
withdrawals,distributions and transfers are made in compliance with
applicable tax laws,rules and regulations,VALIC agrees that:(i)it shall
not,without the prior written consent of the Employer,(A)transfer a Plan
participant’s account to another administrator of the Plan or to a deferred
compensation plan not established and maintained by the Employer,(B)
permit any withdrawal or make any distribution (whether emergency
withdrawal,withdrawal of small account,or distribution on death,
retirement or other termination of service,or otherwise)from a Plan
participant’s account,or (C)make any loans from a Plan participant’s
account,and (ii)it shall provide the Employer with duplicate copies of all
notices,accountings and reports given to the individual Plan participants
pertaining to the status of their individual accounts,including,but not
limited to,those pertaining to deferrals,deposits,investments,fund
allocation,gains,losses,balances,withdrawals,distributions,transfers,
and withholding of income taxes.
2092.700
63049 1
MaylP,199S :
lof3
EXHiBIT “B”
3.Section 5.8 of the Administrative Services Agreement is hereby revised to read
as follows:
‘58 Entire Agreement This Agreement,any written amendments
hereto,and the group Annuity Contract between the Employer and VALIC,
shall:(a)constitute the entire agreement of the parties,and (b)supersede
all previous communications,representations or agreements,either oral
or written,between the parties.’
4.The following language is hereby added as Section 6.0 of the Administrative
Services Agreement:
‘6.0 Employer Consolidation The Employer consists of nine county
sanitation districts organized pursuant to the County Sanitation District
Act (California Health &Safety Code Section 4700 Qt ~These
districts are governmental agencies that have existed for nearly 50 years
and have,during that time,operated,for most purposes,as a single entity
under the provisions of a Joint Administrative Organization Agreement.
By action of the Boards of Directors of the nine districts,pursuant to
specific legislation enacted by the California State Legislature in 1996,an
application was submitted to the Orange County Local Agency Formation
Commission to legally consolidate the nine existing districts into one
single sanitation district for all purposes.The application has been
approved,with an effective date of July 1,1998.As of that date,County
Sanitation Districts Nos.1,2,3,5,6,7,11,13 and 14 of Orange County,
California will cease to exist,and a single consolidated county sanitation
district,known as the ‘Orange County Sanitation District,’shall come into
existence.
Pursuant to California Government Code Section 57500,as of the
effective date of the consolidation,the consolidated district succeeds to
all of the powers,rights,duties,obligations,functions,and properties of
all predecessor districts which have been united or joined into the
consolidated district.The parties hereto agree that,as of July 1,1998,
this Agreement shall be between VALIC and the Orange County
Sanitation District,without the need for any amendment,modification or
assignment of this Agreement,and without the need for further notice.’
lN.WITNESS WHEREOF,the parties have caused this Agreement and this
2092-700
63049 1
2of3
EXHIBiT “B”
Addendum to Administrative Services Agreement to be executed to be effective as of
the date shown hereinabove.
EMPLOYER:HOME OFFICE:
COUNTY SANITATION DISTRICT NO.THE VARIABLE ANNUITY LIFE
I OF ORANGE COUNTY,INSURANCE COMPANY)a Texas
CALIFORNIA,for itself and on behalf of corporation
County Sanitation Districts Nos.2,3,5,
6,7,11,I3andl4ofOrangeCounty,
California,in their capacities as trustees By:.
By:
Donald F.Mcintyre,
General Manager
2092-700
63049 1
Mayliøn 3of3
EXHIBIT “B”
RESOLUTION NO.94 ~
APPROVING AMENDED DEFERRED COMPENSATION PLAN
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 DISTRICT AND
REPEALING RESOLUTION NOS.79-176,81-166 AND 83-188
*********
WHEREAS,by Resolution No.81-166 adopted by the Boards of
Directors on October 14,1981,the District 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 District 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 Qf 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
1
APPENDIX A-i
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 this L&~’~y of
______________
1994.
/~~‘
Joint Chairman
(L495X)
R:2 /16/94
2
APPENDIX A-i
COWrY SANITATION DISTRICTS OF ORANGE COUN’rY,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 inthe law applicable to deferred compensation plans of
local public agency en~ployers,the Districts did,by Resolutions
Nos.83-188 and 94~’2~1 ,adopted by the Boards of Directors on
December 14,1983 and j41pr~l ~3 ,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-~fl .
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 ParticipantJs death,and who is nct
a “Category A Beneficiary”within the meaning of Section
2/17/94 1
APPENDIX A-i
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 ~rDeferred 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
~ncludible 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
2/17/94 2
APPENDIX A-i
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 1994,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 seq.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 nct 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.
2/17/94 3
APPENDIX A-i
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 Tinforeseeable
Emergency will depend upon the facts of each case.
Examples of what are not considered to be TJnforeseeable
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 Includibie 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
2/17/94 4
AppENDIX A-i
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
I-ncludible 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:
(1)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
2,’17/94 5
APPENDIX A-i
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.
2/17/94 6
APPENDiX A-i
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.
2/17/94 7
APPENDIX A-i
SECTION 9:Plan Benefits Deferred Compensation benefits are
payable on the happening of any of the following events:
(a)Normal R,~.~ment of a Participant;
(b)Late Retirement of a Participant;
(c)Termination of Service of a Participant;or
Cd)Death of a Participant who dies either before or after
~~~rred Compensation payments commence,and before the
entire amount of his Investment Account is paid.
SECTION 10:Distribution of Benefits
10.1 Termination of Ernoloyment 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
opticn 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 f or the life of
the Participant or for the lives of the Participant
2/17/94 8
APPENDiX A-i
and his Category A Beneficiary.
Cc)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.
CO1*~ENCEMENT 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.
Cc)In the case of payment option Cd)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 Cd)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 A”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
2/17/94 9
APPENDIX A-i
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 “Benefit 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 Reauired 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 70k;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
2/17/94 10
APPENDiX A-i
the request.
10.5 Lifetime Distribution Requirements 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.].
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 ParticiDant Dies on or after the Required
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,
2/17/94 II
APPENDIX A-i
pursuant to either the “Benefit 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 Reguired
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
2/17/94 12
APPENDIX A-i
surviving spouse of the Participant 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 (1)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 703 .
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
2/17/94 13
APPENDIX A-i
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
2/17/94 14
APPENDIX A-i
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 Reguirements 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 ExDectancy 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
2/17/94 15
APPENDIX A-I
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.
2/17/94 16
APPENDIX A-i
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 1OO~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 cf
not less than three (3)months.
SECTION 12:Non-Assignability Clause Consistent with
Section 8 above,no one,including the Participant,his beneficiary
o~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
2/17/E4 17
APPENDIX A-i
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 he 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
2/17/94 18
APPENDiX A-i
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:1O/21/92;R:3/5/93;R:7/20/93;R:8/31/93;R:1O/8/93;R:1/20/94;
R:2/17/94
2/17/94 19
4&YPENDIX A-i
RESOLUTION NO.95-80
APPROVING AMENDMENT TO DEFERRED COMPENSATION
PLAN 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
FIRST AMENDMENT TO DEFERRED COMPENSATION PLAN
FOR THE OFFICERS AND EMPLOYEES OF THE DISTRICTS
WHEREAS,by Resolution No.94-39,adopted by the Boards of Directors on April 13,
1994,the Districts approved and adopted the County Sanitation Districts of Orange County,
California DeferTed Compensation Plan as Amended 1994 (hereinafter referred to as the
“Plan”);and,
WHEREAS,the Boards of Directors desire to amend the Plan to permit greater flexibility
in plan distribution elections,to clarify certain provisions of the Plan,and to comply with certain
recent Internal Revenue Service interpretations.
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 is hereby amended as set forth in Exhibit “A,”
attached hereto and incorporated herein by reference as though set forth herein at length,and
as so amended shall remain in effect until further amended or terminated by Resolution of the
Boards of Directors.
PASSED AND ADOPTED at a regularmeeting held July 26
,
1995.
2000.00019
14~3~1
APPENDIX A-2
FIRST AMENDMENT TO COUNTY SANITATION DISTRICTS OF ORANGE COUNTY,
CALIFORNIA DEFERRED COMPENSATION PLAN AS AMENDED 1994
WHEREAS,by Resolution No.94-39,adopted by the Boards of Directors on
April 13,1994,the Districts approved and adopted a revised deferred compensation
plan,i.e.,the County Sanitation Districts of Orange County,California Deferred
Compensation Plan as Amended 1994 (the “Plan”);
WHEREAS,the Boards of Directors desire to amend the Plan to permit greater
flexibility in plan distribution elections and to clarify certain provisions of the Plan;
THEREFORE,pursuant to Resolution No.95-80,adopted by the Boards of
Directors on July 26
,
1995 the County Sanitation Districts of Orange County,
California do hereby amend the Plan as follows:
1.Section 3.16 of the Plan is hereby deleted in its entirety and the following
language is hereby inserted in its place and stead:
“Required Beginning Date’shall mean the latest date that distributions are
permitted to commence under Section 10.3.”
2.Section 10.1 of the Plan is hereby deleted in its entirety and the following
language is hereby inserted in its place and stead:
“10.1 Termination of Emolovment 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
1~
EXHIBIT “A”
APPENDiX A-2
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.(This payment option
may be satisfied through annuity distributions.)
(b)Consecutive equal monthly payments for the life of the
Participant or for the lives of the Participant and his Category
A Beneficiary.(This payment option may be satisfied
through annuity distributions.)
(C)A single payment equal to the balance of the Participant’s
Investment Account.
(d)A single lump-sum payment in an amount to be determined
by the Participant,with the remainder of the Participant’s
Investment Account to be paid under either payment option
(a)or payment option (b)above.
COMMENCEMENT 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.
In the case of payment option (d)above,the lump sum must be
paid on the same date that the first payment over time is paid.
DELAYED PAYMENT ELECTION OPTION -
The irrevocable election which must be submitted to the Employer
no later than thirty (30)days following termination of employment
with the Employer due to retirement may specify the elected
commencement date option only,deferring the election as to the
particular payment option.In such case,the Participant must later
submit an election as to the payment option.Such later election
must be submitted no later than thirty (30)days before the
previously elected commencement date and shall become
irrevocable on the date thirty (30)days before such previously
elected commencement date.Should the Participant fail to timely
submit a separate payment option election hereunder,the
2000-00019
148311 2
APPENDIX A-2
Employer shall pay the sum in the Participant’s Investment Account
to the Participant according to payment option (C)above,on the
previously elected commencement date.
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 A”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 (C)above on the Required Beginning Date.”
3.Subsection 10.6.2 of the Plan is hereby deleted in its entirety and the following
language is hereby inserted in its place and stead:
“10.6.2 When Particloant 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 soouse 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
2000.00019
3
APPENDiX A-2
(c)A single lump-sum payment in an amount to be
determined by the Participant,with the
remainder of the Participant’s Investment
Account to be paid under payment option (a).
Such distributions shalt 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.If payment is made under payment
option (c)above,the lump sum must be paid on the
same date that the first payment over time is paid.
(2)if the Category A Beneficiary is the surviving spouse of
the Participant 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
(C)A single lump-sum payment in an amount to be
determined by the Participant,with the
remainder of the Participant’s Investment
Account to be paid under payment option (a).
Such distributions shalt 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 (I)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
70%.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.If
payment is made under payment option (C)above,the
2000.00019
148311
APPENDIX A-2
lump sum must be paid on the same date that the first
payment over time is paid.
CATEGORY B BENEFICIARIES
(3)if the beneficiary is a Cateoorv 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 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
2000-00019
148311 5
APPENDIX A-2
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 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.”
A.Section 12 of the Plan is hereby deleted in its entirety and the following language
•is hereby inserted in its place and stead:
“12:Assignments and Transfers
12.1.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.
S
2000.00019
148311 5
6
APPENDIX A-2
12.2 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 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.
12.3 A Participant,who was formerly employed by another public agency
located within the State of California,may transfer,to the Plan,funds from
an Internal Revenue Code section 457 eligible deferred compensation
plan maintained by that former employer,if that eligible deferred
compensation plan permits transfers to other section 457 eligible deferred
compensation plans and if the Participant complies with all applicable
terms and conditions of the transferring plan in effectuating the transfer.”
5.The Plan shall continue in full force and effect except as expressly amended
herein.
2000-00019
APPENDIX A-2
STATE OF CALIFORNIAi
)SS.
COUNTY OF ORANGE
I,PENNY KYLE,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.95-80 was passed and adopted at
a regular meeting of said Boards on the 26th day of July,1995,by the following
vote,to wit:
AYES:George Brown,John C.Cox,Jr.,Jan Debay,Barry Denes,
Shirley Dettloff,Norman Z.Eckenrode,James M.Ferryman,
James H.Flora,Don R.Griffin,John M.Gullixson,Barry
Hammond,Victor Leipzig,Wally Linn,Mark A.Murphy,Margie
L.Rice,Thomas R.Saltarelli,Sal A.Sapien,George Scott,
Sheldon S.Singer,William G.Steiner,Peer A.Swan,Charles E.
Sylvia,Daniel T.Welch,Bob Zemel
NOES:None
ABSENT:Cecilia L.Age,Burnie Dunlap,Pat McGuigan,Glenn Parker,
Julie Sa
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 26th day of July,1995.
Pe~1YlesSe~rf
Boards of Dire t rs,my Sanitation
Districts Nos.1,2,3,5,6,7,11,13 and
14 of Orange County,California
J:~WPDOC~BS~FORMS~95\F1 2.80
APPENDIX A-2
RESOLUTION NO.~O7
APPROVING AMENDMENT TO DEFERRED COMPENSATION
PLAN 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
SECOND AMENDMENT TO DEFERRED COMPENSATION PLAN
FOR THE OFFICERS AND EMPLOYEES OF THE DISTRICTS
WHEREAS,by Resolution No.94-39,adopted by the Boards of Directors on April 13,
1994,the Districts approved and adopted the County Sanitation Districts of Orange County,
California Deferred Compensation Plan as Amended 1994 (hereinafter referred to as the “Plan”);
and,by Resolution No.95-80,adopted by the Boards of Directors on July 26,1995,the Districts
approved and adopted the first amendment to the Plan;and,
WHEREAS,the Boards of Directors desire to amend the Plan in order to comply with
changes to the U.S.Internal Revenue Code section 457,enacted into law by the U.S.Congress
in 1996 (H.R.3448)P.L.104-188.
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 is hereby further amended as set forth in Exhibit “A,”
attached hereto and incorporated herein by reference as though set forth herein at length,and as
so amended shall remain in effect until further amended or terminated by Resolution of the
Boards of Directors.
PASSED AND ADOPTED at a regular meeting held March 25,19~8
2000.00019
48074_i
ws&s
August11,1997
APPENDIX A-3
STATEOFCALIFORNI1.)
)SS.
COUNTY OF ORANGE )
I,PENNY KYLE,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.98-O7~was passed and adopted at a regular
meeting of said Boards on the 25th day of March,1998,by the following vote,to wit:
AYES:Steve Anderson;Bruce Broadwate~George Brown;John Collins;Jan
Debay;Barry Denes;Bumie Dunlap;Norman Z.Eckenrode;James V.
Evans;James M.Ferryman;Jan Flory;Tom Harman;Mary Ann Jones;
Mark Leyes;Patsy Marshall;Pat McGuigan;Eva Minor-Bradford;Mark A.
Murphy;Thomas R.Saltarelli;Christina Shea;William G.Steiner;Dave
Sullivan;Peer A.Swan;Charles E.Sylvia;Bob Zemel
NOES:None
ABSENT:Brian Donahue;John M.Gullixson
IN WITNESS WHEREOF,I have hereunto set my hand and affixed the official
seal of County Sanitation District No.I on behalf of itself and Districts Nos.2,3,5,6,7,
11,13 and 14 of Orange County,California,this 25th day of March,1998.
•
:
_______
Penny Kyle,s~6jetary/j
Boards of Direcrors,~9Llnty Sanitation
Districts Nos.1,2,3,5,6,7,11,13 and 14 of
Orange County,California
H:~p.dta\admin\8S\FORMS~1 998\F1 2.074oc
APPENDIX A-3
SECOND AMENDMENT TO COUNTY SANITATION DISTRICTS OF ORANGE
COUNTY,CALIFORNIA DEFERRED COMPENSATION PLAN AS AMENDED 1994
WHEREAS,by Resolution No.94-39,adopted by the Boards of Directors on
April 13,1994,the County Sanitation Districts of Orange County,California (the
“Districts”)approved and adopted a revised deferred compensation plan,known as uthe
County Sanitation Districts of Orange County,California Deferred Compensation Plan
as Amended 1994”;
WHEREAS,by Resolution No.95-80,adopted by the Boards of Directors on July
26,1995,the Districts approved and adopted a first amendment to the plan (the “First
Amendment”),to permit greater flexibility in plan distribution elections and to clarify
certain provisions of the plan (the County Sanitation Districts of Orange County,
California Deferred Compensation Plan as Amended 1994,as amended by the First
Amendment,shall hereinafter be referred to as the “Plan”);
WHEREAS,section 457 of the Internal Revenue Code has been amended to
require changes to section 457 deferred compensation plans,and the Boards of
Directors desire to further amend the Plan to comply with section 457 as amended;
THEREFORE,pursuant to Resolution No.
_____,adopted by the Boards of
Directors on
____________,1997,the Districts do hereby amend the Plan as follows:
1.Section 2 of the Plan is hereby deleted in its entirety and the following language
is hereby inserted in its place and stead:
“The primary purpose of the 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.Neither the Plan,nor any provision of the Plan,shall be
construed as either an employment agreement,or a right to be retained
by the Employer.The Employer intends that the Plan satisfy the Internal
Revenue Code section 457 requirements for an “eligible deferred
compensation plan.”However,the Employer does not guarantee any tax
benefits due to participation in the Plan,and each Participant should
consult his or her own tax representative for information and advice on the
tax ramifications of participation in the Plan.”
2000-00019
50498_i
CSD Draft No.I 1
August11.1997
EXHIBIT “A”
APPENDIX A-3
2.Section 3.7 of the Plan is hereby deleted in its entirety and the following
language is hereby inserted in its place and stead:
1437 “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.Accordingly,a Participant’s includible
compensation for a taxable year does not include any amount payable by
the Employer that is excludable from the Participant’s gross income under
Internal Revenue Code section 457(a)and Treasury Regulation section
1.457-1 (including but not limited to this Plan),Internal Revenue Code
section 403(b),or other applicable federal income tax laws.The amount
of Includible Compensation shall be determined without regard to any
community property laws.”
3.Section 3.14 of the Plan is hereby deleted in its entirety and the following
language is hereby inserted in its place and stead:
“3.14 “Plan”shall mean the County Sanitation Districts of Orange County,
California Deferred Compensation Plan as Amended 1994,as further
amended by the First and Second Amendments thereto.”
4.Sections 4.1,4.2 and 4.3 of the Plan are hereby deleted in their entireties and
the following language is hereby inserted in their places and steads:
“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 Section 4.4,Section 10.4 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
2000.00019
50498_i
CSDDraftNo.1 2
August 11.1997
APPENDS~A-3
Participant for each pay period.The amount deferred each year may not
exceed the lesser of:
(a)Seventy-Five Hundred Dollars ($7,500.00),or such greater amount
as the Secretary of the Treasury may establish from time to time
under Internal Revenue Code section 457 (e)(15)due to cost-of-
living increases,reduced (I)by any amount excludable from the
Participant’s gross income for the taxable year under Internal
Revenue Code section 403(b)on account of contributions made by
the Employer,or (ii)as otherwise provided in Internal Revenue
Code section 457(c)(2);or
(b)Thirty-Three and One-Third Percent (33-1/3%)of the Participant’s
Includible Compensation,reduced (I)by any amount excludable
from the Participant’s gross income for the taxable year under
Internal Revenue Code section 403(b)on account of contributions
made by the Employer,or (ii)as otherwise provided in Internal
Revenue Code section 457(c)(2),
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 (I)by any amount
exclud~able from the Participant’s gross income for the taxable year
under Internal Revenue Code section 403(b)on account of
contributions made by the Employer,or (ii)as otherwise provided in
Internal Revenue Code section 457(c)(2);or
2000-00019
50493_I
CSD Draft No.1 3
August11.1997
APPENDIX A-3
(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 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.”
5.The following language is hereby added as the second sentence to Section 6.1
of the Plan:
uThe actions of the Employer,with respect to the Plan and the
administration of the Plan,shall be presumed to be fair,reasonable,and
impartial,and the Employer shall be deemed to have exercised
reasonable care,diligence and prudence,unless the contrary is proven by
affirmative evidence.”
6.Sections 7 and 8 of the Plan are hereby deleted in their entireties and the
following language is hereby inserted in their places and steads:
USECTION 7:Asset Ownership Except as otherwise provided in
Section 8 below,all Deferred Compensation credited to the Deferred
Compensation Investment Fund,all property and rights purchased with amounts
2000-00019
504981
CSDDraftNO.1 4
August11.1991
APPENDIX A-3
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.
SECTION 8:Declaration of Trust
8.1 Notwithstanding the provisions of Section 7,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 (collectively,the “Trust Estate”)shall be held,by the Employer as
trustee,in trust for the exclusive benefit of the Participants and their
beneficiaries,per the terms and conditions of Section 8.2 below.No
portion of the Trust Estate shall revert to the Employer or be used or
diverted to purposes other than the exclusive benefit of the Participants
and their beneficiaries.
8.2 The Employer,as trustee,and in accordance with applicable law:
(a)shall have the power to invest and reinvest the Trust Estate in all
assets permitted under Government Code section 53609;
(b)shall have the power to retain in cash,without obligation for
interest,such portion of the Trust Estate as it may deem (i)
advisable to meet Plan obligations,or (ii)to be in the best interests
of the Plan;
(c)shall have the power to retain,manage,operate,administer and
otherwise deal with the Trust Estate in such manner as it deems
appropriate;
(d)shall have the power to transfer,sell,exchange,redeem and
dispose of the assets of the Trust Estate,in any manner and at any
time,by private or public sale or otherwise;
(e)shall have the power,with respect to the assets of the Trust Estate,
2000.00019
50498_I
CSD Draft No.1 5
August11,1997
APPENDIX A-3
to exercise all the rights of an individual owner,including,but not
limited to,the power to give proxies,to participate in any voting
trusts,mergers,consolidations or liquidations,and to exercise or
sell stock subscriptions or conversion rights;
(f)shall have the power to hold,authorize the holding of,and register
any assets of the Trust Estate in any manner permitted by law;
(g)shall have the power,in its discretion,to compromise,contest
(whether through legal proceedings or otherwise),arbitrate,or
abandon claims and demands on behalf of the Trust Estate and/or
the Plan,and to commence,maintain or defend the Trust Estate
and/or the Plan in suits or legal proceedings;
(h)shall have the power to employ consultants,accountants,
depositories,agents and legal counsel on behalf of the Trust Estate
and/or the Plan;
(i)shall have the power to open,maintain and close any bank
account(s),in any federally insured financial institution permitted by
law,in the name of the Plan,the Employer or,to the extent
permitted by law,any nominee or agent of the Plan or the
Employer;
(j)shall have the power to charge to,and pay from,the Trust Estate:
(i)any taxes levied or assessed upon or in respect to the assets of
the Trust Estate,(ii)any commissions and similar expenses with
respect to the assets of the Trust Estate,(iii)the reasonable
compensation of any third-party manager or administrator utilized
by the Employer in the management or administration of the Trust
Estate and/or the Plan,and (iv)the reasonable expenses of such
third-party manager or administrator or the Employer incurred in
connection with Trust Estate and/or Plan management or
administration (including,but not limited to,legal,accounting,
investment and custodial services);
(k)shall pay benefits to Plan Participants and their beneficiaries,in
cash or in kind or partly in each,in accordance with the terms
hereof;
(I)shall have the power:(i)to retain any funds or property subject to
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any dispute,without liability to pay interest,(ii)to decline to make
payment or delivery of the funds or property until final adjudication
of the dispute is made by a court of competent junsdiction,and (iii)
to charge an Investment Account with the Employer’s legal
expenses and costs incurred due to a dispute concerning that
Investment Account;
(m)shall have the power to make Participant loans,as described in
Section 15;
(n)shall administer the Plan and the Trust Estate as described in
Sections 6,15 and this Section 8;
shall have the discretion:(i)to make limited investment options
available to the Participant and to change those investment options
from time to time,(ii)to eliminate an investment option,even if all
or a portion of a Participant’s Investment Account is already
invested therein,with the result that such amount must be
reinvested in another,permitted,investment),and (iii)to invest the
amounts in a Participant’s Investment Account either as requested
by the Participant,or as otherwise determined by the Employer;
(p)shall not be required to invest the amounts in the Trust Estate;
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 Trust Estate for the exclusive benefit of the
Participants and their beneficiaries;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;and
(q)shall have the power to make,execute,acknowledge and deliver
any and all instruments necessary or proper for the
accomplishment of,and to do any and all other acts that it may
deem necessary or appropriate to carry out,the foregoing powers.”
7.Sections 10.1 and 10.2 of the Plan are hereby deleted in their entireties and the
following language is hereby inserted in their places and steads:
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APPENDIX A-3
“1 0.1 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 described below,expressed in terms of both payment
option and commencement date option.Except as otherwise provided in
Subsection 10.1.3,the commencement date portion of such election shall
become irrevocable upon the lapse of the thirtieth (30th)day following
termination of employment with the Employer due to retirement.
10.1.1 Options
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 option)as elected by the
Participant:
A.PAYMENT OPTION -
(1)Options:
(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.(This payment option may
be satisfied through annuity distributions.)
(b)Consecutive equal monthly payments for the life of
the Participant or for the lives of the Participant and
his Category A Beneficiary.(This payment option
may be satisfied through annuity distributions.)
(c)A single payment equal to the balance of the
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APPENDIX A-3
Participant’s Investment Account.
(d)A single lump-sum payment in an amount to be
determined by the Participant,with the remainder of
the Participant’s Investment Account to be paid under
either payment option (a)or payment option (b)
above.
(2)Modified or Delayed Election:
The Participant may modify his payment option election at
any time until the date which is thirty (30)days before the
commencement date as finally determined pursuant to
Subsection 10.1.1,10.1.2,or 10.1.3,as applicable (the
~Final Commencement Date”).Or,the Participant may
choose to defer making a payment option election
altogether,until a date as late as thirty (30)days before the
Final Commencement Date.Thirty (30)days before the
Final Commencement Date,the most recent payment option
election on file with the Employer shall become irrevocable.
If there is no payment option election on file with the
Employer at that time,the Employer shall pay the sum in the
Participant’s Investment Account to the Participant
according to payment option (C)above,on the Final
Commencement Date.
B.COMMENCEMENT 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.
In the case of payment.option (d)above,the lump sum must be
paid on the same date that the first payment over time is paid.
C.LIMITATIONS -
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.
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APPENDIX A-3
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.
10.1.2 Default Election
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 A”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 (C)above on the Required Beginning Date.
10.1.3 One-Time Change in Commencement Date Election
Notwithstanding anything to the contrary in this Section 10.1,the
Participant may,at any time after the first day of the third calendar month
following the month in which termination of employment occurs,~ii~at
least thirty (30)days before the scheduled commencement date,pursuant
to either Subsection 10.1.1 or the Benefit UA~election on file with the
Employer as of the date of retirement,elect to further defer the
commencement date,to a date later than that previously elected (but not
later than the Required Beginning Date).The Participant may exercise
his or her right,under this Subsection 10.1.3,to file a changed
commencement date election only once.
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.Except as otherwise provided in Subsection 10.2.3 below,the
commencement date portion of the latest such election filed with the
Employer shall become irrevocable upon the lapse of the thirtieth (30th)
day following Termination of Service.
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APPENDIX A-3
10.2.1 Options
A.PAYMENT OPTION -
(1)Options:
(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.(This payment option may
be satisfied through annuity distributions.)
(b)Consecutive equal monthly payments for the life of
the Participant or for the lives of the Participant and
his Category A Beneficiary.(This payment option
may be satisfied through annuity distributions.)
(c)A single payment equal to the balance of the
Participant’s Investment Account.
(d)A single lump-sum payment in an amount to be
determined by the Participant,with the remainder of
the Participant’s Investment Account to be paid under
either payment option (a)or payment option (b)
above.
(2)Modified or Delayed Election:
The Participant may modify his payment option election at
any time until the date which is thirty (30)days before the
commencement date as finally determined pursuant to
Subsection 10.2.1,10.2.2,or 10.2.3,as applicable (the
“Final Commencement Date”).Or,the Participant may
choose to defer making a payment option election
attogether,until a date as late as thirty (30)days before the
Final Commencement Date.Thirty (30)days before the
Final Commencement Date,the most recent payment option
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~ppENDIX A-3
election on file with the Employer shall become irrevocable.
If there is no payment option election on file with the
Employer at that time,the Employer shall pay the sum in the
Participant’s Investment Account to the Participant
according to payment option (c)above,on the Final
Commencement Date.
B.COMMENCEMENT 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.
In the case of payment option (d)above,the lump sum must be
paid on the same date that the first payment over time is paid.
C.LIMITATIONS -
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.
10.2.2 Default Election
Should the Participant fail to elect one of the benefits hereunder either
pursuant to the “Benefit 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.
10.2.3 One-Time Change in Commencement Date Election
Notwithstanding anything to the contrary in this Section 10.2,the
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APPENDiX A-3
Participant may,at any time after the first day of the third calendar month
following the month in which Termination of Service occurs,~at least
thirty (30)days before the scheduled commencement date,pursuant to
either Subsection 10.2.1 or the Benefit “B”election on file with the
Employer as of the date of Termination of Service,elect to further defer
the commencement date,to a date later than that previously elected (but
not later than the Required Beginning Date).The Participant may
exercise his or her right,under this Subsection 10.2.3,to file a changed
commencement date election only once.”
8.Section 10.4 of the Plan is hereby deleted in its entirety and the following
language is hereby inserted in its place and stead:
“10.4 Acceleration of Payment of Small Investment Accounts Notwithstanding
the provisions of Sections 10.1 and 10.2 above,a Participant may elect to
receive the full balance of his or her Investment Account at any time,but
only on the following conditions:
(a)the balance of the Investment Account does not exceed $3,500;
(b)no amount has been deferred under the Plan with respect to the
Participant during the two-year period ending on the date of the
distribution;and
(c)there has been no prior distribution to the Participant under this
Section 10.4 (i.e.,the acceleration right can be exercised only
once).
Any distribution under this Section 10.4 shall be deemed a termination of
participation in the Plan.The (former)Participant may re-elect to
participate in the Plan,pursuant to Section 4.1,after a lapse of at least
three (3)months after the date of distribution under this Section 10.4.”
9.Subsection 10.6.2 of the Plan is hereby deleted in its entirety and the following
language is hereby inserted in its place and stead:
“10.6.2 When Participant Dies either before the Required Beginnino 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
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APPENDIX A-3
A or B Beneficiary,then the Employer shall pay such portion as
follows-
A.CATEGORY A BENEFICIARIES -
(1)Category A Beneficiary Other than Surviving Sopuse
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,expressed in terms of both payment option
and commencement date option:
PAYMENT OPTION:
(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.
COMMENCEMENT DATE OPTION:
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,If the Category A Beneficiary
submits a permitted benefits election,the election
must be filed with the Employer within ninety (90)
days after the Participant’s death,and the earliest
commencement date shall be the first day of the fifth
calendar month following the month in which the
death of the Participant occurred.
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APPENDIX A-3
(2)Surviving SDouse
If the Category A Beneficiary is the surviving spouse of the
Participant,the portion of the Investment Account payable to
the surviving spouse shall be distributed according to one of
the following options,expressed in terms of both payment
option and commencement date option:
PAYMENT OPTION:
(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
(C)a combination of the benefits described in (a)
and (b)above.
COMMENCEMENT DATE OPTION:
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 (i)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
70Y2.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.If the
surviving spouse submits a permitted benefits
election,the election must be filed with the Employer
within ninety (90)days after the Participant’s death,
and the earliest commencement date shall be the first
day of the fifth calendar month following the month in
which the death of the Participant occurred.
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APPENDiX A-3
(3)Elections
PARTICIPANT’S ELECTION:
All elections (as to both payment option and
commencement date)to be made under this
Subsection 10.6.2 shall be made by the Participant
pursuant to either the “Benefit C”provisions of 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.
BENEFICIARY’S ELECTION:
Any permitted beneficiary election must be in the form
of a 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.The commencement
date portion of the Beneficiary’s election shall become
irrevocable on the date ninety (90)days after the
Participant’s death.However,the Beneficiary may
modify his payment option election up to thirty (30)
days before the previously elected commencement
date.
(4)Death of a Category A Beneficiary
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
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CSDDrafIN0.1 16
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APPENDiX A-3
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.
B.CATEGORY B BENEFiCIARIES -
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.
C.TRUST AS BENEFICIARY -
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
beneficiary,and elects lifetime payments,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
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APPENDIX A-3
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.Subsection 10.7.3 of the Plan is hereby deleted in its entirety and the following
language is hereby inserted in its place and stead:
0.7.3 Emoloyer Discretion to Accelerate Distributions The Employer,in
its sole and absolute discretion,shall have the right,at any time
when subparagraphs (a)-(c)of Section 10.4 are satisfied,to
distribute the entire balance of the Participant’s Investment Account
to the Participant.In addition,after distributions have begun under
Sections 10.1,10.2 or 10.6,.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 and for administrative ease,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.
Moreover,at any time after distributions have begun under
Sections 10.1,10.2 or 10.6,if 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.”
11.The following language is hereby added as subsection 10.7.5 of the Plan:
U1075 Cost-of-Living Adjustment of Periodic Payments The Participant or
a Category A Beneficiary,at the time of submitting a distribution
option election permitted under Section 10.1,Section 10.2,or
Section 10.6 of the Plan,may elect that any distributions made
pursuant to a periodic payment option may be made not in equal
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August 11.1997
APPENDIX A-3
amounts,but rather in increasing amounts,based on increases in
the cost-of-living..The formula for determining cost-of-living
increases shall be established by the Employer from time to time.”
12.The Plan Section 12.1 cross-reference to Section 8 is hereby changed to a
cross-reference to Section 7.
13.Section 12.3 of the Plan is hereby deleted in its entirety and the following
language is hereby inserted in its place and stead:
“12.3 A Participant,who was formerly employed by another public
agency located within the State of California,may transfer,
to the Plan,funds from an Internal Revenue Code section
457 eligible deferred compensation plan maintained by that
former employer,if that eligible deferred compensation plan
permits transfers to other section 457 eligible deferred
compensation plans and if the Participant complies with all
applicable terms and conditions of both the transfening plan
and this Plan in effectuating the transfer.As a condition to
transfer to this Plan,the Employer may require that assets
transferred from another plan be in the form of cash or cash
equivalents.”
14.The following language is hereby added as Section 15 of the Plan:
“15:Participant Loans The Employer may establish a
Participant loan program on the terms and conditions set forth in this Section 15,
and any additional terms and conditions as the Employer may prescribe from
time to time.If the Employer establishes such a loan program,the Participants
may apply to the Employer for loans,to be secured by their respective
Investment Accounts.In addition to such other terms and conditions as the
Employer may prescribe,the following terms and conditions shall apply to the
Participant loans.
15.1 Maximum Loan Amount The outstanding aggregate balance of all loans
made to the Participant under the Plan shall hot exceed the lesser of:
(a)fifty thousand dollars ($50,000),reduced by the excess (if
any)of
(I)the highest outstanding balance of loans from the Plan during
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APPENDIX A-3
the one-year period ending on the day before the date on which
such loan was made,over (ii)the outstanding balance of loans
from the Plan on the date on which such loan was made,or
(b)one-half of the present value of the nonforfeitable accrued
benefit of the Participant under the Plan.
(For the purpose of determining the maximum loan amount under this Section
15.1,all deferred compensation plans of the Employer shall be treated as one
plan.)
15.2 Maximum Loan Term Except as otherwise provided in this Section 15,
each loan shall be repaid in full within five (5)years.However,the five-year
limitation shall not apply if the purpose of the loan is to enable the Participant to
acquire a dwelling unit which,within a reasonable period of time (to be
determined by the Employer at the time the loan is made),is to be used as the
Participant’s principal residence.
15.3 Promissory Note The loan shall be evidenced by an interest-bearing
promissory note,payable to the Employer.The promissory note shall be fully
amortized,with payments to be made at such intervals as provided therein,
which shall be no less frequently than quarterly.The promissory note shall
contain terms and conditions as are required by this Section 15,and such
additional terms and conditions as are established by the Employer from time to
time.
15.4 Collateral/Security The loan shall be secured by the Participant’s
assignment,to the Employer,of the Participant’s right,title and interest in and to
his or her Investment Account,or such portion thereof as the Employer,in its
sole and absolute discretion,determines to be adequate security under the
circumstances.
15.5.Distributions No distribution of any portion of a Participant’s Investment
Account shall be made to any Participant,or to any beneficiary of the Participant,
until such time as all Participant loans and accrued interest thereon are repaid in
full.Notwithstanding the foregoing,however,the Employer,in its sole discretion,
may permit an emergency withdrawal,under the terms and conditions described
in Section 11 above,provided such emergency withdrawal shalt not cause the
then outstanding balance of the Participant’s loan to exceed the maximum loan
amount described in Section 15.1 above.
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APPEI~D1X A-3
15.6 Repayment Loan repayments shall be made by payroll deduction,or
when repayment cannot be made by payroll deduction,then by check.
Notwithstanding any provision of Section 15.2 to the contrary,the outstanding
balance of all loans to a Participant shall immediately become due and payable
in full on Termination of Service for any reason.If the loan is not paid in full
within thirty (30)days of Termination of Service,the unpaid balance shall be
deducted from any Plan benefit payable to the Participant or the Participant’s
beneficiary.In addition,in the event of default in repayment of a loan,the
Employer,in its sole and absolute discretion,may deem the loan to be
immediately due and payable in full,in which case the Employer may pursue any
and all remedies available at law or in equity,and may Iiquidate.the security and
apply it to satisfy the then outstanding balance under the loan,treat the then
outstanding balance as a distribution to the Participant,and reduce the amount
of the Participant’s Investment Account by such amount.
15.7 Participant Loan Account Notwithstanding any provision of Section 6.3 to
the contrary,upon delivery,to the Employer,of the executed promissory note
and assignment of interest in the Participant’s Investment Account,the Employer
shall establish a loan account for the Participant (the “Participant’s Loan
Account”),and transfer from the Participant’s Investment Account to the
Participant’s Loan Account an amount equal to the amount of the Participant’s
loan.The assets of the Participant’s Loan Account may be invested and
reinvested only in promissory notes payable to the Employer by the Participant,
or in cash.The Employer shall not be liable for any loss resulting from the
Participant’s breach of his payment obligations under such promissory note(s).
Uninvested cash balances in a Participant’s Loan Account shall not bear interest.
Repayments of principal and interest shall be transferred to the Participant’s
Investment Account and invested as provided in Sections 6 and 8.The amount
of the Participant’s Loan Account shall be reduced by the amount of each such
transfer.
15.8 Application Procedures.Loan Requirements.Terms and Conditions.and
Accounting Procedures From time to time,the Employer shall establish loan
application procedures,loan requirements,loan terms and conditions,and loan
accounting procedures.The application procedures,loan requirements,terms
and conditions,and accounting procedures shall be uniform and non
discriminatory.From time to time,the Employer shall set an interest rate for new
loans,based on prevailing rates.Loans made at different times may be subject
to different interest rates,due to the difference in prevailing rates at the time.”
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APPENDIX A-3
15.The Plan shall continue in full force and effect except as expressly amended
herein.
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APPENDIX A-3